Watch Out

   Politicians claim credit when an economy grows, and blame their predecessors when it stumbles.
   Reality check: A national economy has a life of its own, and while government spending may have some influence on economic health, it is not the primary influence.
   Indeed, when an economy is healthy and growing, a wise government steps back while the nation enjoys its economic balance and growth.
   Moreover, excess government spending in prosperous times can easily detract from the prosperity enjoyed by the other two major segments of a national economy -- consumer spending and private sector production.
   For centuries, governments avoided any involvement in economic cycles, following the notion of laissez faire, a French term meaning "leave things alone." But the Great Depression of the 1930s persuaded people that government can and should intervene to stimulate an economy back to health.
   The problem, of course, is in knowing when to back off. Government cannot, and should not, attempt to fully control an economy all the time.
   However, it can and should intervene occasionally to maintain economic balance. That's the goal of a nation's central bank -- in the U.S., that's the responsibility of the Federal Reserve, and it does so by manipulating interest rates. The plan is aided when need be by increases in government spending on things like road and highway construction and other infrastructure projects.
   Meanwhile, don't be surprised if the Fed acts to cut interest rates next week for the first time in a decade, despite widespread signs of a thriving economy.
   The kicker is that worldwide, there are signs that things are not what they could be in other nations, and the Fed may be acting to forestall a downturn from affecting the U.S.
   As for the likelihood that the Fed is following directions from the president, who has been talking big about the need to lower interest rates to help stimulate the economy even more than it has been for the past few years, it would be the first time the Fed has done that.
   The Fed has always cherished its independence, and the odds that the central bank is doing what the president wants are slim. It's a coincidence, at best.
   If not, that can be the start of a very serious problem.