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Old 06-14-2020, 08:45 PM
 
Location: Washington Park, Denver
8,082 posts, read 7,505,926 times
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Quote:
Originally Posted by Hoonose View Post
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.
Agree.

Three possible ways the debt gets handled

1) taxes/austerity
2) inflation
3) suppression of bond interest rates

I could see corporate tax rates going back up a bit from 21%, but 3 is most likely for now.
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Old 06-14-2020, 09:21 PM
 
Location: Tennessee
27,594 posts, read 20,591,792 times
Reputation: 33426
Quote:
Originally Posted by SkyDog77 View Post
Agree.

Three possible ways the debt gets handled

1) taxes/austerity
2) inflation
3) suppression of bond interest rates

I could see corporate tax rates going back up a bit from 21%, but 3 is most likely for now.
There is no political appetite to do anything other than inflate it away.
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Old 06-15-2020, 06:38 AM
 
2,600 posts, read 990,345 times
Reputation: 6538
Quote:
Originally Posted by Serious Conversation View Post
There is no political appetite to do anything other than inflate it away.
If that is the case, how will the Fed explain away inflation numbers higher than their “target” rate of 2%? One of the Fed’s mandates is price stability, and they really can’t abandon that without consequences in the markets. The pandemic unemployment payments will need to continue in some other form to avoid social unrest if prices rise for food and other consumer goods rise significantly.
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Old 06-15-2020, 07:50 AM
 
Location: Washington Park, Denver
8,082 posts, read 7,505,926 times
Reputation: 9105
Quote:
Originally Posted by Serious Conversation View Post
There is no political appetite to do anything other than inflate it away.
There is very little political risk in #3
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Old 06-15-2020, 07:53 AM
 
Location: Washington Park, Denver
8,082 posts, read 7,505,926 times
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Quote:
Originally Posted by TimAZ View Post
If that is the case, how will the Fed explain away inflation numbers higher than their “target” rate of 2%? One of the Fed’s mandates is price stability, and they really can’t abandon that without consequences in the markets. The pandemic unemployment payments will need to continue in some other form to avoid social unrest if prices rise for food and other consumer goods rise significantly.
I have been sitting through talks from leading economists, some of whom are former Fed economists. They all seem to think The Fed will be fine letting inflation go a bit over targets, even as high as 5%, without intervention. The struggle is to get it there.

Inflation lifts all boats, including salaries.

Last edited by SkyDog77; 06-15-2020 at 08:02 AM..
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Old 06-15-2020, 08:03 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
25,210 posts, read 43,000,650 times
Reputation: 27995
Quote:
Originally Posted by mathjak107 View Post
the same as it always did ... pretty much nothing ...

as long as the interest is covered and the world considers us the best house in the worst neighborhood , the principal never needs to be paid ....

... .
We (?) (Fed) need to keep USA the world's 'safe-haven' for investment $$.

That is task enough, and has worked well for nearly 100 yrs.
Avoid a snafu like 2008!
Keep on the economic forefront.
Avoid corruption in finance.
Keep corp governance and reporting within public eye.

Plenty for a 'good government leadership' to focus on.

Now, to find that purposeful leadership in Nov 2020.

(Whole lotta work to be done!)
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Old 06-15-2020, 10:46 AM
 
Location: Right here; Right now
10,644 posts, read 5,044,736 times
Reputation: 1694
Quote:
Originally Posted by the tiger View Post
What does this mean for me a tax paying law abiding citizen in the country of the United States of America?
https://www.cnn.com/2020/06/10/econo...ing/index.html
Rebate ...
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Old 06-15-2020, 02:58 PM
 
473 posts, read 174,487 times
Reputation: 508
wealthy n big businees been getting stimulus no taxes etc for years so why not cut them off n give a little to rest of us be much cheaper
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Old 06-15-2020, 05:23 PM
 
2,600 posts, read 990,345 times
Reputation: 6538
Quote:
Originally Posted by SkyDog77 View Post
I have been sitting through talks from leading economists, some of whom are former Fed economists. They all seem to think The Fed will be fine letting inflation go a bit over targets, even as high as 5%, without intervention. The struggle is to get it there.

Inflation lifts all boats, including salaries.
If the braintrust are good with a 5% inflation rate then they run into the dilemma of keeping interest rates on the federal debt manageable. The bond markets will not allow a 3 or 4 point spread, so rates will go up. At even 3% servicing the national debt is going to run ~ $1T a year and there is no one left to pay the increased income taxes — tilt! Sure they can “print” to service the debt (a MMT wet dream), but that fools no one and the USD takes a dive.

Situational stimulus is a policy tool for crises, forever stimulus is a fool’s errand. The national currency cannot survive and the result will be chaos and revolution.
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Old 06-15-2020, 09:41 PM
 
1,910 posts, read 708,760 times
Reputation: 6067
Quote:
Originally Posted by TimAZ View Post
If that is the case, how will the Fed explain away inflation numbers higher than their “target” rate of 2%? One of the Fed’s mandates is price stability, and they really can’t abandon that without consequences in the markets. The pandemic unemployment payments will need to continue in some other form to avoid social unrest if prices rise for food and other consumer goods rise significantly.
For starters, the CPI as calculated by the BLS is BS.
No matter, as real inflation will manifest not so much in ordinary staples like food or clothing, but more so in big ticket items (autos, travel, entertainment), and assets such as real estate, stocks, bonds, and collectibles.

Hasn't anyone noticed how the more QE we get, the MORE wealth inequality grows?

And does anyone find these phenomena as perversely amusing as I do?
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