Toro
Diamond Member
- Sep 29, 2005
- 112,313
- 65,350
Would allowing the Bush tax cuts to expire "crash" the market? Probably not. But it would probably be bad for the market. Raising taxes, like cutting spending, would be contractionary, which is a bad idea in a weak economy. But QE2 is far more important than the Bush tax cuts. The market could be facing trouble when the Fed buying is scheduled to end in June.
The tax cuts should be extended for the next year or two, but they should not be made permanent. They could cost the Treasury $4 trillion over the next decade. They should also be cut for everyone, not just for those making under $250k or $1MM. Having said that, it is better that they be made for people making below those incomes than allowing them to expire. If they are allowed to expire, a pox on both parties. It is a bad game of brinkmanship.
The return of the stock market over the past three days has been one of the strongest of the year. The market has been rallying because of ECB support for Ireland's and Portugal's debt, generally better than expected economic news and belief that a deal on tax cuts is at hand. The latter is probably the least important.
Clinton ran a surplus. The total amount of marketable debt, i.e. debt held by the public, fell. The reason why total debt rose was because of an increase in liabilities in the trusts, i.e. Social Security. But this isn't "intergovernmental borrowing" since the government didn't actually borrow from itself. It is a book entry, not a cash flow. However, Clinton probably wouldn't have run a surplus had the Tech Bubble not occurred, since there was a spike in capital gains taxes. Having said that, Clinton left the fiscal balance in much better shape than Bush did.
I'm not sure why allowing the Bush tax cuts to expire would drive the market higher. It would most likely weigh on stocks, since it would induce selling to take capital gains this year with a lower tax rate instead of capital gains next year with a higher tax rate.
The tax cuts should be extended for the next year or two, but they should not be made permanent. They could cost the Treasury $4 trillion over the next decade. They should also be cut for everyone, not just for those making under $250k or $1MM. Having said that, it is better that they be made for people making below those incomes than allowing them to expire. If they are allowed to expire, a pox on both parties. It is a bad game of brinkmanship.
The return of the stock market over the past three days has been one of the strongest of the year. The market has been rallying because of ECB support for Ireland's and Portugal's debt, generally better than expected economic news and belief that a deal on tax cuts is at hand. The latter is probably the least important.
Clinton ran a surplus. The total amount of marketable debt, i.e. debt held by the public, fell. The reason why total debt rose was because of an increase in liabilities in the trusts, i.e. Social Security. But this isn't "intergovernmental borrowing" since the government didn't actually borrow from itself. It is a book entry, not a cash flow. However, Clinton probably wouldn't have run a surplus had the Tech Bubble not occurred, since there was a spike in capital gains taxes. Having said that, Clinton left the fiscal balance in much better shape than Bush did.
Many of us, including myself, pointed out long ago that the prospect of the Bush tax cuts being allowed to expire was driving artificial growth in the stock market this year.
Which is of course nonsense.
Which explains your complete and utter lack of knowledge of economics, business, and human psychology.
I'm not sure why allowing the Bush tax cuts to expire would drive the market higher. It would most likely weigh on stocks, since it would induce selling to take capital gains this year with a lower tax rate instead of capital gains next year with a higher tax rate.
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