The new business cycle - this new prolonged expansion attributed to either the new monetarism or Reaganomics - can be more understood in terms of Keynes. John Maynard Keynes was a British big guy - they dub 'Sir' - who in the Great Depression era proposed that a nation-state, which controls the production of money anyhow, could borrow up the kazoo and spend it in ways that would get businessmen off their tuffs and their machines cranked up and people back at work and everybody would be happy again. At that time, though, it took Hitler to get politicians off their tuffs first. This time around it took Ronald Reagan.

Reagan himself, of course, praised 'supply-siders' - it would be investors who led the expansion, he promised. But investors themselves relied on a large federal deficit and low interest rates to create a huge sum of money to invest. As long as wages are kept down, and it isn't taxed, most of it remains as profit to be reinvested again and again at a feverish pitch, raising - as we have witnessed - a lot of bull in the stock markets.

Theoretically, Keynes is quite right. If one conceives of a national - or, presently, a global - economy as a vast economic machine, like a table saw or tractor, it is quite logical to borrow to buy that machine provided it can produce enough money to pay back its loan and hopefully make a little extra. In this same way, a huge federal deficit feeding a rising stock market creates more taxable revenue which, even at reduced tax rates, can pay off that debt and maybe earn a little extra. But, as with the table saw or tractor, a prudent businessman would hope to do so before it is junk. This is where the notion of business cycle is so important.

We have, as a nation-state, reached the level in this economic expansion - this business cycle - that we no longer have to borrow to charge it up. On the basis of these higher earnings, the President and the collective Congress are able to put forth annual budgets which are approaching some balance - but we have yet to reach a point where we begin to pay it off. The critical factor in this grand enterprise is its duration, after which we again have to borrow to 'prime the pump.' Being so heavily invested in automobiles and warheads, we should consider this cycle not, as is the basis of election year strategists, as lasting 5 - 20 years, but consider, as did the Nathan Forrester model, in terms of century or two.

Many commentators today have taken to speaking of the business cycle as if it had its own life of its own, like a god or demon. But in fact it is a composite of many factors - technology, which is to say a particular mix of capital and labor, geopolitical stability or lack thereof, and environmental constraints. An ill or illiterate population, for example, would likely have an affect on economic production, as would a polar meltdown.