9 ms·

what do you want Congress to do? if they increase spending, you get more inflation, and then they have to eventually pay higher rates on their own debt if the

what do you want Congress to do? if they increase spending, you get more inflation, and then they have to eventually pay higher rates on their own debt if they cut spending, they can deflate the economy, and they can't attract the tax revenues to pay their own debt no good options in a society that has OD'd on debt since the mid 90s if we were honest, the President would go on TV and tell us we are just going to be poorer for a while, which is something most people already know anyway

JumpCrisscross 3y ago
> if they cut spending, they can deflate the economy, and they can't attract the tax revenues to pay their own debt This is not a serious constraint on deficit reduction.
collegeburner 3y ago
core pce just printed at 4.6 and ur worried about deflation? services inflation printed at 7.3% and ur worried about deflation? that's not a valid opinion atp. we're so far from overcorrecting its scary. spending is still up over pre corona levels. ppl still drawing down excess savings. bank crisis is a real concern and prob reads through to equivalent of a few rate hikes (slok @ apollo says 150bps, most say lower)
rcpt 3y ago
Real estate gets around $150B per year in federal tax cuts. End that. Housing goes down. Inflation fixed.
- candiddevmike 3y ago
  The amount of buy and hold slumlords that don't pay any taxes is staggering. Paper losses due to depreciation yet they're wealthy as can be.
  - tekknik 3y ago
    How do you not pay taxes on property?
candiddevmike 3y ago
Increase corporate taxes like everyone was telling them to. Soak up the COVID PPP helicopter money.
- deleted 3y ago
  [deleted]
- tekknik 3y ago
  Then throw us deeper into a recession since business won’t invest in expanding anymore?
tflinton 3y ago
A few things: Disincentivize property investments in family homes. Return R&D tax credits. Return so a semblance of the glass & steagall act. Up the amount of coverage the FDIC is authorized to cover even before regulators need to take over. Allow an upfront loan privately for banks to lend against temporarily with stock put as collateral. Up the corporate tax rate. Remove the cap on SALT taxes for those under 400k. Change marginal tax rates for individuals. There insane amount of things congress can do if they just… do it.
- refurb 3y ago
  Wow, those would probably have major negative consequences for the economy.
- pclmulqdq 3y ago
  Those are all things that increase the size of the money supply. A fiscal policy that cracks inflation needs higher taxes and lower spending, which in turn reduces the amount of money in the system.
  - dragonwriter 3y ago
    > A fiscal policy that cracks inflation needs higher taxes and lower spending, which in turn reduces the amount of money in the system. Why would you want a fiscal policy to crack inflation? Better to crack it with monetary policy and use fiscal policy to mitigate adverse distributional effects of the monetary policy, since its easier not to overshoot badly that way than with contractionary fiscal policy.
    - pclmulqdq 3y ago
      You would ideally not like fiscal and monetary policy working against each other. Having them work in opposite directions is what got us in this mess. Also, you can't stop inflation while also mitigating the adverse effects of it. You stop inflation by making people poorer. Also, while monetary policy can be adjusted more frequently, those adjustments take a while to move through the economy, so maybe you want to be careful with it or you will crush a few too many banks.
sanderjd 3y ago
They need to raise taxes. That's the other lever.
tenpies 3y ago
> if they increase spending, you get more inflation, and then they have to eventually pay higher rates on their own debt You can spend in a dis-inflationary manner: increasing production capacity, facilitating resource extraction, and generally anything that helps on the supply side of things. But absolutely, given the current Administration and the Democrat agenda, this is anathema. If anything they would rather spend to destroy supply as much as possible, since this is generally what the SDG, DIE, and Green agendas consider "success". A great example is the Inflation Reduction Act. The "green" portions were estimated to cost $390 BB initially, but are now estimated to cost $1045 BB (yes, over a trillion dollars), and this number will almost certain go up[1]. Not a penny of it goes to anything that would increase supply of what you'll need for the "green" infrastructure, it's all pure demand, the bulk of it EV incentives. You would have trouble coming up with a more inflationary plan if you tried. --- [1] https://budgetmodel.wharton.upenn.edu/estimates/2023/4/27/update-cost-climate-and-energy-inflation-reduction-act https://budgetmodel.wharton.upenn.edu/estimates/2023/4/27/up...
jmyeet 3y ago
This is so easy. Increase corporate taxation. Increase the minimum corporate tax rate from 15% to 50% until taxation comes down. Prohibit share buybacks. If necessary put in a temporary price and wage freeze. This was done under Nixon.
- deleted 3y ago
  [deleted]

JumpCrisscross 3y ago

> if they cut spending, they can deflate the economy, and they can't attract the tax revenues to pay their own debt This is not a serious constraint on deficit reduction.

collegeburner 3y ago

core pce just printed at 4.6 and ur worried about deflation? services inflation printed at 7.3% and ur worried about deflation? that's not a valid opinion atp. we're so far from overcorrecting its scary. spending is still up over pre corona levels. ppl still drawing down excess savings. bank crisis is a real concern and prob reads through to equivalent of a few rate hikes (slok @ apollo says 150bps, most say lower)

rcpt 3y ago

Real estate gets around $150B per year in federal tax cuts. End that. Housing goes down. Inflation fixed.

candiddevmike 3y ago
The amount of buy and hold slumlords that don't pay any taxes is staggering. Paper losses due to depreciation yet they're wealthy as can be.
- tekknik 3y ago
  How do you not pay taxes on property?

candiddevmike 3y ago

Increase corporate taxes like everyone was telling them to. Soak up the COVID PPP helicopter money.

deleted 3y ago
[deleted]
tekknik 3y ago
Then throw us deeper into a recession since business won’t invest in expanding anymore?

tflinton 3y ago

A few things: Disincentivize property investments in family homes. Return R&D tax credits. Return so a semblance of the glass & steagall act. Up the amount of coverage the FDIC is authorized to cover even before regulators need to take over. Allow an upfront loan privately for banks to lend against temporarily with stock put as collateral. Up the corporate tax rate. Remove the cap on SALT taxes for those under 400k. Change marginal tax rates for individuals. There insane amount of things congress can do if they just… do it.

refurb 3y ago
Wow, those would probably have major negative consequences for the economy.
pclmulqdq 3y ago
Those are all things that increase the size of the money supply. A fiscal policy that cracks inflation needs higher taxes and lower spending, which in turn reduces the amount of money in the system.
- dragonwriter 3y ago
  > A fiscal policy that cracks inflation needs higher taxes and lower spending, which in turn reduces the amount of money in the system. Why would you want a fiscal policy to crack inflation? Better to crack it with monetary policy and use fiscal policy to mitigate adverse distributional effects of the monetary policy, since its easier not to overshoot badly that way than with contractionary fiscal policy.
  - pclmulqdq 3y ago
    You would ideally not like fiscal and monetary policy working against each other. Having them work in opposite directions is what got us in this mess. Also, you can't stop inflation while also mitigating the adverse effects of it. You stop inflation by making people poorer. Also, while monetary policy can be adjusted more frequently, those adjustments take a while to move through the economy, so maybe you want to be careful with it or you will crush a few too many banks.

sanderjd 3y ago

They need to raise taxes. That's the other lever.

tenpies 3y ago

> if they increase spending, you get more inflation, and then they have to eventually pay higher rates on their own debt You can spend in a dis-inflationary manner: increasing production capacity, facilitating resource extraction, and generally anything that helps on the supply side of things. But absolutely, given the current Administration and the Democrat agenda, this is anathema. If anything they would rather spend to destroy supply as much as possible, since this is generally what the SDG, DIE, and Green agendas consider "success". A great example is the Inflation Reduction Act. The "green" portions were estimated to cost $390 BB initially, but are now estimated to cost $1045 BB (yes, over a trillion dollars), and this number will almost certain go up[1]. Not a penny of it goes to anything that would increase supply of what you'll need for the "green" infrastructure, it's all pure demand, the bulk of it EV incentives. You would have trouble coming up with a more inflationary plan if you tried. --- [1] https://budgetmodel.wharton.upenn.edu/estimates/2023/4/27/update-cost-climate-and-energy-inflation-reduction-act https://budgetmodel.wharton.upenn.edu/estimates/2023/4/27/up...

jmyeet 3y ago

This is so easy. Increase corporate taxation. Increase the minimum corporate tax rate from 15% to 50% until taxation comes down. Prohibit share buybacks. If necessary put in a temporary price and wage freeze. This was done under Nixon.

deleted 3y ago
[deleted]