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Government spending is always financed by taxation.
Either they take your currency or they take the purchasing power of your currency.
Not always.
When the Fed monetizes debt, we need no taxpayers.
The Treasury issues bonds, and the Fed creates the necessary money out of thin air to buy them.
The Treasury then has those dollars without engaging the taxpayer.
Any amount of potential inflation if any from that new money will depend on when in an economic cycle and where in the world it goes.
There are certainly times where we might want some inflation. Where low general demands, unemployment, recession/depression and even deflation are worse problems.
Real, meaningful stimulus would be keeping the $600 a week going through Q1 2021 and extending standard unemployment to 99 weeks.
That stimulus you speak of is tied to unemployment; so what happens when people are recalled back to work? And or in case of self employed, independent contractors and gig workers money starts coming in again?
While what you are suggesting does make sense to point; tying it to unemployment provides a disincentive for many to return working. It also provides an incentive for employers to lay people off because even if they have to pay UI claims, it likely is less than keeping people on the books when sales/work is slow. Long as they are getting that extra $600 any moral wavering about employees losing a bulk of their income being laid off evaporates.
whether those taxes come or not is really not going to be dependent on the debt level
The debt is going to service itself? Oh that’s right, your a big fan of TLT and when rates go negative the fund will fold space and become a magic unicorn flying around and squirting gold eagles from its butt.
Higher taxes are coming and the biggest plum on the tree is the stash of funds in retirement accounts.
That stimulus you speak of is tied to unemployment; so what happens when people are recalled back to work? And or in case of self employed, independent contractors and gig workers money starts coming in again?
While what you are suggesting does make sense to point; tying it to unemployment provides a disincentive for many to return working. It also provides an incentive for employers to lay people off because even if they have to pay UI claims, it likely is less than keeping people on the books when sales/work is slow. Long as they are getting that extra $600 any moral wavering about employees losing a bulk of their income being laid off evaporates.
The disincentives for working are really only for the low wage service sector people. For middle income, white collar office workers ($45,000 - $80,000 annual salary), the $600/week is a life line. For middle income, white collar office workers, the $600/week + whatever they get in state unemployment roughly replaces 100% of their salaries. They need that. Also, interviewing for white collar jobs is a pain in the butt. It's easier for low wage service sector workers to get jobs because their interview process and job application processes are a breeze.
When the $600/week disappears, the middle income white collar office workers are going to be in a world of pain. Their jobs are harder to obtain and their interview processes are more protracted. The low wage service sector workers will have jobs again in 2 weeks. The white collar office workers are going to be out of work for some lengthy period of time.
The debt is going to service itself? Oh that’s right, your a big fan of TLT and when rates go negative the fund will fold space and become a magic unicorn flying around and squirting gold eagles from its butt.
Higher taxes are coming and the biggest plum on the tree is the stash of funds in retirement accounts.
Our Federal taxes are based on our income, not national debt.
Sure we could levy a tax to cover more of it, but that won't be very popular.
Choice would be to monetize more of our national debt or pay more taxes? And that answer might depend on our level of inflation.
Wealth taxes are coming, both state and federal. Twenty years ago a politician named Jessie Jackson proposed a “one-time” levy of 10% on all retirement accounts with the money going into the general fund to buy social justice. If the Democrats control Congress and hold the Presidency again, we could see similar proposals to raid the $trillions in savings (aka hoarded money) that are readily available. Nothing is sadder than a politician with no money to spend.
Obviously Trump, Mnuchin and Powell know how to avoid that.
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