If tax cuts are
actually made by congress in spite of near full employment:
Buy gold because the
dollar will lose value.
Interest rates will
climb if the Federal Reserve senses an inflationary trend over 2
percent.
If the interest rate
rises so will the cost of financing the federal debt further
increasing the budget deficits.
Unless corrected,
the big boys in fund management will continue to receive rate loop
holes that you could drive a truck through. (see carried interest)
Tax cuts for
consumers, so called pump priming, in a recessionary, high
unemployment economy, is meant to stimulate growth and not
necessarily increase government revenue.
Tax cuts on
businesses is meant to stimulate business growth and lower
unemployment but, as in Ohio, the business owner often pockets the
tax saving for personal purposes. This results in a reduction in tax
revenue and a reduction of essential government services.
Both Kennedy and
Reagan primed the pump but then increased taxes when the economy
overheated.
Clinton raised taxed
to balance the budget and to build a rainy day fund for Bush II
Bush II kept his tax
cuts beyond the use by date and the debt and deficits soared and
contributed to the great crash of 2008.
Supply side, trickle
down has not worked for the mainly because those befitting the most
pocketed the saving rather than invest in new plant and equipment.
Ergo we see the great rift valley of wealth distribution we see
today.
One upside is that
U.S. goods will be more affordable in foreign markets.
These are personal
observations and opinions based on 50 years of interested study. I
welcome any and all counter opinions.
Paul Hunter (contact
paulhunter45177@gmail.com)
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