Tuesday, June 30, 2020

MORE MONEY PRINTING: Proposals Under Consideration for Another Reckless Stimulus Package

Larry Kudlow
On Monday, top Trump economic adviser Larry Kudlow cited the following as options for a phase 4 stimulus:

-- Payroll tax holiday;
-- Capital gains tax cut;
-- Business investment incentives;
-- Deductions for restaurants/biz expenses/"baseball games";
-- State and local aid of some kind

I am all for tax cuts, and the first four options can all be considered tax cuts of one form or another. However, without accompanying cuts in government spending, these cuts will only result in increased taxes of one form or another via various methods.

The greatest tax threat being Federal Reserve money printing to make up the shortfall between revenue and spending. The money printing, of course, brings with it the tax of price inflation.

Further, the final item on the stimulus list of options should be a no go.

State and local governments brought on their fiscal woes by launching unscientific irresponsible lockdowns. Let those who financed these governments take the financial hit for this reckless behavior, not the citizens of the country. Once again, the federal government has no funds for such a bailout and the ultimate source of the money would have to be via taxes of one sort or another.

The nation is in terrible economic shape, the last thing that should be instituted are more taxes including Federal Reserve money printing style taxes.

Of course, the typical shallow-thinking Trump administration is not thinking beyond the "stimulus." The disaster of the Fed money pump could result in the destruction of the dollar on foreign exchange markets and high-grade price inflation domestically.


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