Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TopCat who wrote (685166)	11/16/2012 9:22:52 PM
From: J_F_Shepard	Respond to of 1577031

How does reducing taxes and reducing spending stimulate the economy?

To: TopCat who wrote (685166)	11/17/2012 8:58:48 AM
From: combjelly	Read Replies (5) \| Respond to of 1577031

Ok, TC. I can see you don't have a good understanding of how the government and economics operate. Let me try to explain. The US is in almost total control of its economic. Not only is its currency independent of other currencies, it is the reserve currency for the world. As a result, unlike say Greece, the US has a great deal of latitude. So it has a number of tools to deal with an economic downturn. Not only does it have taxes, it can borrow money, and if need be, print it. The latter is something Greece cannot do. All have downsides. Too much taxation is a drag on the economy. Borrowing money means interest payments. Printing money can lead to inflation. But all of these, if done in moderation and in an appropriate manner, can have modest, or even no, effects. There is no evidence, or reason to expect, that taxation at the current level +/- 20% or so has any real impact except on revenues. Especially on the upper brackets per the recent CRS study. Available money is also available at record low interest rates, so the cost is smaller than usual. And it would take an awful lot to kick off significant inflation, albeit the chaotic weather means that certain agricultural products are impacted by things other than systemic inflation. Now that may conflict with some of your cherished beliefs. But these things are backed with data. Your beliefs are not.