right now we may be in 1973 mode.
Probably not. Back then we where operating under the mistaken belief that we could have long term tradeoffs with inflation and unemployment, that accepting higher inflation would lead to lower unemployment, and not just for the short term. That idea has been thoroughly discredited among economists, and in the fed, and even among politicians has less support than it used to.
Also back then we faced 70% top marginal federal tax rates, and higher taxes on investments, and we paid more of our GDP on oil, getting noticeably less GDP for each barrel, then we tried wage and price controls (general controls relatively briefly, controls on oil and natural gas, for a much longer time).
Well depending on political developments we could face some steps in that direction. Higher taxes might be coming, on both income and investment (even if the rates will still not be as high as the pre-Reagan rates), and also payroll, expanding regulation could but a burden on the economy etc.
Still while things might be more like the 70s to early 80s, I don't except to see an exact repeat or something just as bad. |
