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Debt spending tends to turn into tax increases if you actually plan on paying the money back
by dtwest 6y ago
Debt spending tends to turn into tax increases if you actually plan on paying the money back
- outside1234 6y agoThe end game here is inflation. Which, in the long run, will also make the stock market, and their options increase, as revenue and profit inflate. But not in the short term.
- drdec 6y agoExcept that the Fed is buying bonds that pay a higher rate that they borrow at (U.S. Treasury rate). So unless there is a lot of defaulting, they should be fine. It's like they are mortgaging the White House at 0.25% and buying bonds that pay 4%.
- thephyber 6y agoNot necessarily. If the economy grows faster than recent history, a constant tax rate brings in more revenue. Also worth looking at the last time the USA completely paid off its government debt. > On January 8, 1835, president Andrew Jackson paid off the entire national debt, the only time in U.S. history that has been accomplished. [1] [1] https://en.wikipedia.org/wiki/History_of_the_United_States_public_debt https://en.wikipedia.org/wiki/History_of_the_United_States_p...
- dtwest 6y agoYes, well actually if the economy grows at all, a constant tax rate brings in more revenue, while we tend to spend more too. But I agree it is theoretically possible. In Andrew Jackson's case they also raised taxes: https://en.wikipedia.org/wiki/Tariff_of_Abominations https://en.wikipedia.org/wiki/Tariff_of_Abominations