12-04-2016, 05:15 PM
(12-04-2016, 10:27 AM)Mikebert Wrote: Warren, I do not understand why you seem to want a much bigger federal debt/GDP ratio.
If you want to understand, please first reread my post on how it has worked in Japan, including the two links to my livejournal.
Additional evidence is that the Federal Reserve currently holds about $2,000,000,000,000 of nongovernmental debt with inflation still below targets. The government just isn't issuing enough debt for the Fed to buy, a sure sign it should issue more.
Japan's ratio is over 2:1. We don't have as bad a demographic crisis, but we could easily go to 1.5:1.
Quote:It appears you think if top tax rates are cut there will be an investment boom and strong economic growth--what I call the "Field of Dreams" school of economics (if you build it (invest) they (jobs) will come). Why do you think cutting taxes will incent people to put their cash at risk. Do you think I am sitting in cash because I don't want to have to pay taxes on the potential profits I could reap if this finally comes true? Or is it because of the scary high market, with a much greater probability of much lower prices before Dow 36,000 becomes reality?
Do you think businesses need to be incented in order to invest in profitable opportunities? Think about it, a 10% ROI from a good investment taxed at 50% still gives 2.5 times the gain from a 2% Treasury return taxes at 0%. If tax cuts only incent investment when the supply of investable funds is limiting. If funds were limited companies would not have the large amounts of cash they have on hand, nor would they doing this.
No tax rate will incent companies to take money safely stashed in Treasuries to put them into bad investment (i.e. those that will likely lose money).
You're confused about what supply side economics is. See my to playwrite for an explanation. It's not about investment at all.