GOP tax bill doomed by 'class warfare' tactics—Commentary
This article actually illustrates the real issue at hand: "With Republicans like this, who needs Democrats"? If they want to keep Shillery out of the next run, and themselves all out of jail on faked charges, they better dump McConnell and Ryan and find a couple of semi honest creatures that will at least do a "little" something for people. Right now, it is almost like the acceleration seen in the last half of AS, when the looters start to loose all their opportunities to rip everyone else off....
Any catastrophe brought on by excessive spending and borrowing will be much worse and harder to correct than a catastrophe brought on by excessive spending alone.
If the spending and borrowing are not curtailed there will ultimately be a catastrophe. There is no sustainable method for continuing this.
“Deficits can be a source of inflation if they are accommodated by monetary policy-that is, if the Federal Reserve responds to higher deficits by increasing the growth of money. The Federal Reserve has two ways of responding to higher deficits:
1. The central bank directly purchases the securities issued by the government to finance the deficits.
2. The private sector purchases these same securities; then, the central bank attempts to limit any potential interest rate increases.
Under either scenario, deficits lead to greater money base growth, which can create inflationary pressure.”
https://www.stlouisfed.org/Publicatio...
So an excessive deficit will be inflationary regardless of whether the money is “printed” or “borrowed”. The difference is that “printing” the money does not create a huge national debt and its accompanying interest burden on the taxpayers.
It also leads to an 'easy money' policy that is inflationary (which reduces the value of the principle of any fixed investment -- like cash in the bank -- from what it otherwise would be). The easy money policy is a major factor in why the stock market has risen so much despite the economy not being nearly as good as you might otherwise think it is from stock market values. Price inflation is not uniform across the economy; prices go up first where the new money is being spent. As the effects build up over time inflation wrecks the whole economy; a large monetary inflation is even worse.
The are so many gimmicks in place now with spending, borrowing, inflation, and controls that is practically impossible to track what is happening while we wait for a the inevitable chickens coming home to roost.
https://nyti.ms/2icXs4P
It's not even the increased borrowing that makes it hard to pass. It's everyone with their hand out, "hey, why did my neighbor get a cut and I didn't?" It's so bogus b/c your tax situation changes every year. Simpler and lower taxes are generally better.
The winners/losers chart in the NYT article shows exactly why we need lower and simpler taxes.
The more recent bout of unrestrained money printing in Zimbabwe, which led to hyperinflation, was facilitated by massive government corruption, draconian political and economic controls, and widespread expropriation and destruction of farms and other productive enterprises. These preconditions for hyperinflation do not exist in any advanced market-based economy. If such circumstances do arise someday in the U.S., backing our fiat money with government bonds will not save the country from a financial meltdown; it will likely make matters worse.
It’s worth noting that the U.S. today has one thing in common with postwar Germany and Hungary: the presence of a government debt that we are increasingly unable to pay back. We can continue “kicking the can down the road” as our national debt continues to become more unmanageable, or we can begin to gradually pay it down. Given our present political and economic circumstances, the only way we can accomplish this is by breaking the link between the federal deficit and the national debt.
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