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Stonepounder

(4,033 posts)
Fri Dec 1, 2017, 01:09 AM Dec 2017

How The Federal Reserve Could Rain On Trumps Tax Cut Parade

Source: Huffington Post

WASHINGTON ― Republicans say their tax overhaul bill will juice the economy, and most economists agree that cutting corporate taxes could boost growth, at least in the short term.

But one reason the boost won’t be as strong as Republicans might like is that the Federal Reserve would be expected to move to keep that growth in check.

<snip>

“If the tax cuts are deficit financed, that is going to juice the economy and it will overheat, significantly raising the odds of a recession early in the next decade,” Zandi told HuffPost.

<snip>

The Fed has a dual mandate to maximize employment and keep the rate of price growth stable, pursuing the latter goal by targeting a 2 percent inflation rate. If inflation show signs of exceeding the 2 percent threshold, the Fed could hit the brakes by raising an influential interest rate. An increase in the benchmark federal funds rate ― the rate banks charge one another for overnight lending ― would dampen economic growth by raising the cost of credit throughout the economy.

Read more: https://www.huffingtonpost.com/entry/donald-trump-federal-reserve-offset-tax-cuts_us_5a2076cae4b03350e0b55f99?ncid=inblnkushpmg00000009



So just about any way you look at it there is no way that they will get the economic growth they are prattling on about.

Our country that has existed for 240 years is no more.
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How The Federal Reserve Could Rain On Trumps Tax Cut Parade (Original Post) Stonepounder Dec 2017 OP
With low unemployment, a rising stock market, Qutzupalotl Dec 2017 #1
The true intent of this monstrous bill, not fooled Dec 2017 #2
Trickle down is the same story every time... C Moon Dec 2017 #3
It's worse than that maxrandb Dec 2017 #8
Exactly correct disalitervisum Dec 2017 #4
You can only "juice an economy" by raising wages BumRushDaShow Dec 2017 #5
Indeed. And the reason the economy has improved in 2017 TexasBushwhacker Dec 2017 #6
THIS BumRushDaShow Dec 2017 #7

Qutzupalotl

(14,230 posts)
1. With low unemployment, a rising stock market,
Fri Dec 1, 2017, 01:53 AM
Dec 2017

maybe wages rising someday ... why do they need to juice anything? Do they not see the contradiction? Or do they just lie when it suits their purposes? I think I just answered my own question.

not fooled

(5,791 posts)
2. The true intent of this monstrous bill,
Fri Dec 1, 2017, 02:42 AM
Dec 2017

besides paying back puke donors, is to act as a Trojan horse to undo the remnants of the New Deal and the Great Society. They don't care whether there is any actual growth or not. They just want to bust a further hole in the nation's finances so that there is "rationale" to demolish social spending and steal earned benefits. I think that talk of growth and magic fairy dust jobs is just for the rubes.




C Moon

(12,188 posts)
3. Trickle down is the same story every time...
Fri Dec 1, 2017, 03:16 AM
Dec 2017

after a few years...no jobs.
I've lived through enough of them: Reagan, Bush Sr., Bush Jr.

Same story each time.
We then put the Dems in power to clean things up. Things improve and are so much better—even the deficit improves (go figure that: the GOP who is supposed to be so careful with finances, manages to fuck up EVERYTHING...except making the rich richer).
But when times are good, everyone forgets what it was like when the GOP was in power...
Then...rinse and repeat.

maxrandb

(15,193 posts)
8. It's worse than that
Fri Dec 1, 2017, 10:53 AM
Dec 2017

What has happened since the Ray-Gun trickle down crap is that Retrumplicans completely fuck the economy and create massive recessions. Dems then come in and clean up the mess, but it takes time.

Beginning the second after President Obama was sworn in, Retrumplicans began hammering on how "horrible" everything was. They just hammered and hammered and hammered, year after year. By the time Obama's actions began to start reflecting in stuff like the Dow and the Unemployment Rate, it was years into his presidency.

When the Stock Market starting growing, unemployment began to come down and wages started creeping up, the Retrumplicans moved onto bitching about the deficit, and still hammered on the economy.

The DOW was at about 7,000 when Obama became President. When he left it was approaching 22,000. When Obama took office, Unemployment was at 10%, when Obama left office, Unemployment was 4.1%

So, Donnie Short Fingers comes with the economy on 3RD Base, and he gets to act like he hit a triple.

The Retrumplicans will wreck the economy again, and some Democrat will come in with the shit hitting the fan, and will get blamed for the time it takes to fix it.

That's why the next time the Dems are in power, they need to remember how the Retrumplicans govern. It doesn't matter if Dems only have a slim majority, or even lost the popular vote in the election, they need to govern like they've got the biggest fucking mandate in the god damn history of governance.

Then they need to tax the ever living fuck out of the 1%. I'm talking 90% range.

They're going to bitch about it anyway, might as well make them feel the fucking pain too.

 

disalitervisum

(470 posts)
4. Exactly correct
Fri Dec 1, 2017, 07:45 AM
Dec 2017

Beside the fact that this so-called "tax reform" bill isn't that at all, but rather a social engineering bill, given the provisions that allow special deductions for airplane owners, fetal credit accounts, and open political activism for churches (and who knows what else, since no one can read the damn thing) it is like cutting the brake line on a car going 100 mph. The inevitable crash totals the car.

BumRushDaShow

(127,331 posts)
5. You can only "juice an economy" by raising wages
Fri Dec 1, 2017, 08:24 AM
Dec 2017

which would allow for a huge number of individuals to better afford all those "goods and services" being offered. But by pricing the 99% out because of wage suppression in order to increase profits, then the economy would have to eventually tank because you can have all these "goods and services" available, but also have no one except for a minuscule few in the top 1% able to afford them, and thus the fate is sealed. Spiraling the labor costs down into the slavery category should not be an option (although they are pretty much there already by using non-American workers).

TexasBushwhacker

(20,044 posts)
6. Indeed. And the reason the economy has improved in 2017
Fri Dec 1, 2017, 10:45 AM
Dec 2017

is, in part, because several states raised their minimum wage at the beginning of the year.

BumRushDaShow

(127,331 posts)
7. THIS
Fri Dec 1, 2017, 10:48 AM
Dec 2017

and not just states but a number of municipalities were able to do so when their state didn't (and in some cases, those cities are often fighting the state in court to keep those increases in place).

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