Tuesday , 23 January 2018


Debt & Deficits

Would Higher Tax Rates On Rich Help Close America's Deficit Much?

It's the shrunken tax base, not lower tax rates, which is responsible for today's revenue shortfall. A healthier economy and faster jobs growth would do much more to close the deficit than any amount of higher tax rates on the rich. Raising tax rates might weaken the economy further, and that would make it much more difficult to generate higher tax revenues. [The truth of the matter is that] nobody's taxes need to be raised, and nobody's spending needs to be cut—the U.S. economy is already on a glide path to the restoration of fiscal sanity. Washington: are you listening? Words: 1190

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What is Financial Repression? Why It Will Fail

Financial repression occurs when governments channel funds into their own sovereign bonds in order to reduce debt levels through mechanisms such as directed lending, caps on interest rates, capital controls, debt monetization, or by other means. The promise of financial repression is that it will hold down government borrowing costs and reduce government debt levels, but critics argue that financial repression merely targets the producers of society, i.e., the middle class, and therefore harms the economy. Let's take a look at financial repression ands its supposed pros and cons. Words: 1486

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U.S.'s Runaway Financial Train is About to Destroy the Status Quo

People riding a runaway train can party and remain oblivious to the fact that the train is about to crash into a huge obstacle. Our runaway financial train is about to destroy the status quo as it crashes into the obstacle of mathematical consequences – the inevitable financial train wreck. “If something cannot go on forever, it will stop.” [Let me explain.] Words: 974

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Grappling With the Possible Impact of the Fiscal Cliff

If Congress addresses the issue by maintaining the current tax and spending policies we will get more of the same economy we have experienced for the past three years (all else being equal). [That being said,] what if Congress goes over the fiscal cliff hit? This blog post is designed to asses the impact. Words: 1362

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The Fiscal Cliff: Components, Controversies & Compromises

The term “fiscal cliff” was first coined by Ben Bernanke in early 2012, and it refers to the roughly $718 billion that will be withdrawn in some way, shape or form (4.6% of our nation’s annual economic output) from the economy in 2013. This will occur in the form of tax increases and federal spending cuts. If nothing is done, and all the scheduled tax increases and spending cuts go into effect on January 1, the Congressional Budget Office estimates that the economy will contract slightly in 2013. Other estimates (including ours) show a much deeper recession would be likely. Words: 940

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U.S. Continues to Lead the World — In Debt!

The USA continues to decline economically relative to some parts of the world, most notably those in Asia yet we still lead in many areas. Unfortunately being number one is some categories is not a good thing and our level of debt is one of these areas. In fact, our debt burden leads the world. [A look at the charts below illustrates that all too clearly.] Words: 272

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U.S. Between a Rock & a Hard Place: A Recession Now or a Financial Collapse Later! Here's How to Invest in Such Precarious Times

Over the past few years, policy leaders worldwide have grown accustomed to kicking the can down the road with each step in this ongoing financial crisis making incremental moves rather than cultivating viable long term solutions. More recent attempts seem to have evolved into simply just trying to kick the can out of the driveway. Now we fear there may not be enough firepower left to simply kick the can over. [Having done so, we are left between the proverbial rock and a hard place.] If lawmakers do nothing, by all accounts we are likely to see a recession. Should lawmakers extend the Bush-era tax cuts, you make no progress towards long term deficit reduction, potentially raising the risk and magnitude of a future financial crisis. [Let me discuss this predicament further and how best to invest in such precarious times.] Words: 1602

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The Doomsday Cycle: There are More, and Worse, Crises to Come! Here's Why

global_economic_crisis

Industrialised countries today face serious risks – for their financial sectors, for their public finances, and for their growth prospects. This column explains how, through our financial systems, we have created enormous, complex financial structures that can inflict tragic consequences with failure and yet are inherently difficult to regulate and control. It explains how this has happened and why there are more and worse crises to come. Words: 2434

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