Watch Out, the Deficit Is Gaining

Tax cuts and military spending are coloring the future with dark and deepening shades of red ink. For investors, it's not a pretty picture

Most investors aren't worried right now about the mounting federal budget deficit. More pressing problems are weighing on them, including weak corporate earnings, the moribund economy, and what could happen in Iraq now that Saddam Hussein's regime has fallen. The Bush Administration's proposals to boost government spending for defense and cut taxes to stimulate the economy still strike some investors as a welcome antidote to the market's ills.

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