Talking about Extending Tax Cuts Does Little For Middle Class And Does Nothing To Promote Economic Growth | Market

 

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Extending Tax Cuts Does Little For Middle Class And Does Nothing To Promote Economic Growth | Market
Events of the last few days show the US is on an accelerating descent into banana republic finance. First, the siren song that the cure for debt is more debt was given another stanza by the nation’s chief money printer on 60 Minutes Sunday night. Then, on Monday evening, the nation’s capitulator-in-chief made a deal with Congressional Republicans to light up a trillion dollar budgetary Christmas tree. Moreover, in throwing the deficit financing spigot wide open on the back of Ben Bernanke’s promise to continue monetizing all the new debt Washington might create, the tax plan negotiators booby-trapped the nation’s budget with the expiration of several hundred billion of tax-cut goodies on election eve in 2012. So after the next predictable exercise in rinse and repeat, the true cost of Monday night’s plan will be in the multi-trillions. In this context, it’s useful to recall the classic traits of banana republic finance. These include massive and chronic government debt issuance; reckless monetary expansion to absorb it; and pervasive economic distortions that cause an uphill flow of income and wealth to the top of the economic ladder. The Obama White House’s latest act of fiscal desperation accomplishes all three

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