Economy 52,844 Posted March 16, 2018 Share Posted March 16, 2018 https://www.google.ca/amp/www.foxnews.com/opinion/2018/03/15/john-fund-why-larry-kudlow-s-appointment-could-turbocharge-us-economy.amp.html Trump and his new appointee Larry Ludlow are talking about a phase 2 tax cut... In particular they want to cut the Capital Gains tax which investors pay when they make profit on equities or other Capital gains Trump has not given any suggestions on how to pay for it so most likely it would be added to the deficit Link to post Share on other sites More sharing options...
Chromatislaps 34,854 Posted March 16, 2018 Share Posted March 16, 2018 I want him cut from the white house Link to post Share on other sites More sharing options...
666 others 1,856 Posted March 16, 2018 Share Posted March 16, 2018 What actually happens if the deficit keeps increasing? I mean something's gotta give right? Sorry I don't understand economy (or US politics for that matter) much. :holyshit: Link to post Share on other sites More sharing options...
Economy 52,844 Posted March 16, 2018 Author Share Posted March 16, 2018 47 minutes ago, 666 others said: What actually happens if the deficit keeps increasing? I mean something's gotta give right? Sorry I don't understand economy (or US politics for that matter) much. Governments borrow thru bonds and must pay them off plus interest when they are due. To pay for old bonds usually they issue and sell new bonds unless they run a surplus and use it to pay off old debt If the debt gets too high there's a risk that the Government can't get enough investors to fund their debt and they default on old debt payments or other bills and when Government defaults it destroys the markets confidence Another issue is yields on bonds (interest) starts to rise when investors feel the risk the Government can't manage the debt is rising... Because Government bonds are the biggest segment of the bond market, when they rise they influence Corporate bonds to rise as well which raises the cost of credit for the entire economy and consumer not just the Government In addition, Throwing too much money in an economy close to full capacity and employment can seriously raise inflation @Luc Mr economist, did I miss anything? Link to post Share on other sites More sharing options...
Luc 4,776 Posted March 21, 2018 Share Posted March 21, 2018 On 16-3-2018 at 11:21 PM, Economy said: Governments borrow thru bonds and must pay them off plus interest when they are due. To pay for old bonds usually they issue and sell new bonds unless they run a surplus and use it to pay off old debt If the debt gets too high there's a risk that the Government can't get enough investors to fund their debt and they default on old debt payments or other bills and when Government defaults it destroys the markets confidence Another issue is yields on bonds (interest) starts to rise when investors feel the risk the Government can't manage the debt is rising... Because Government bonds are the biggest segment of the bond market, when they rise they influence Corporate bonds to rise as well which raises the cost of credit for the entire economy and consumer not just the Government In addition, Throwing too much money in an economy close to full capacity and employment can seriously raise inflation @Luc Mr economist, did I miss anything? The chances of the US defaulting are pretty low. They can print money without mass devaluation because USD is the global currency forcommodities like oil keeping demand for dollars high. Investors know this so the interest on obligations will not rise that much. Link to post Share on other sites More sharing options...
Economy 52,844 Posted March 21, 2018 Author Share Posted March 21, 2018 11 hours ago, Luc said: The chances of the US defaulting are pretty low. They can print money without mass devaluation because USD is the global currency forcommodities like oil keeping demand for dollars high. Investors know this so the interest on obligations will not rise that much. Being the reserve currency doesn't give you unlimited leeway tho US yields still respond to changing rates, and inflation expectations... Reserve currency or not you still need enough demand from investors to borrow what you need... Reserve currency or not, you will still get inflation if you just start printing It does give an advantage I agree in terms of investor confidence... I'm just pointing out there's limits to how much reserve status will protect you Link to post Share on other sites More sharing options...
BeIIadonna 5,480 Posted March 21, 2018 Share Posted March 21, 2018 Bad Decisions.mp3 Link to post Share on other sites More sharing options...
Eggsy 8,280 Posted March 21, 2018 Share Posted March 21, 2018 Just now, MonsterGaga5555 said: Bad Decisions.mp3 Bad Elections.mp3 more accurate lol... But i would say he wants more tax cuts for his own bracket but will cover it with a minimal break for my own. Link to post Share on other sites More sharing options...
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