Reason One: In reassuring the markets that inflation will remain tame
the Federal Reserve stopped Quantitative Easing and the purchasing
of various securities on the open market. Borrowers will see rates rise
from one and a half percent to a possible five and a half percent.
Meaning the Federal Government, who borrows most of the twenty
trillion dollar national debt on a short-term basis, must pay an additional
two hundred billion dollars for each one percentage point rise in interest
rates, for a total of eight hundred billion dollars in new debt payments
every year. Borrow more from somewhere else, maybe not.
Reason Two: When the economy crashed in 2008 foreign purchases of treasury
bonds and note rose almost immediately from one hundred billion dollars to
seven hundred billion dollars. But in the last two years those purchases have
dropped back down to the hundred billion dollar range while federal spending
remains the same due to the brilliant idea of the Sequester. Now economies
across the globe from Europe to China are headed downward. Clearly selling
those dollar denominated assets to keep their economies from collapsing seems
the order of the day, meaning another six hundred billion dollars a year in rising
taxes if they withdraw at the rate they formally invested.
Reason Three: When Obama entered office in 2008 the budget was just
under four trillion, and it has remained there all these years while inflation
slowly chews away at it. By 2016, it will take another trillion dollars more in
taxes just to restore the lost purchasing power of those dollars, not including
the needs of an increasing population. Maybe the Republicans can resist the
temptation to spend more, but another eight years and half the budget will
have inflated away — that’s a lot of pressure.
Reason Four: They fought bitterly over thirty billion dollars in spending cuts
over the past two years, with threats of shutting down the government. But
now they have won the election and control Congress. Surely it’s time for them
to spend money on things they want to spend money on. Why else would they
say, “We will not shut down the government.” And addressing their concerns
over the national debt at the same time, they might raise taxes to reduce it.
Let’s say six hundred billion in new spending every year.
Assuming all these things come to pass, we could see top tax income rates
rise above seventy percent. On the other hand, Republicans might resist
temptation and pressure, foreign economies recover, and the Federal Reserve
pushes the markets into a panic over QE4. But what sort of crazy, twisted,
messed-up world would that be? Hm…
the Federal Reserve stopped Quantitative Easing and the purchasing
of various securities on the open market. Borrowers will see rates rise
from one and a half percent to a possible five and a half percent.
Meaning the Federal Government, who borrows most of the twenty
trillion dollar national debt on a short-term basis, must pay an additional
two hundred billion dollars for each one percentage point rise in interest
rates, for a total of eight hundred billion dollars in new debt payments
every year. Borrow more from somewhere else, maybe not.
Reason Two: When the economy crashed in 2008 foreign purchases of treasury
bonds and note rose almost immediately from one hundred billion dollars to
seven hundred billion dollars. But in the last two years those purchases have
dropped back down to the hundred billion dollar range while federal spending
remains the same due to the brilliant idea of the Sequester. Now economies
across the globe from Europe to China are headed downward. Clearly selling
those dollar denominated assets to keep their economies from collapsing seems
the order of the day, meaning another six hundred billion dollars a year in rising
taxes if they withdraw at the rate they formally invested.
Reason Three: When Obama entered office in 2008 the budget was just
under four trillion, and it has remained there all these years while inflation
slowly chews away at it. By 2016, it will take another trillion dollars more in
taxes just to restore the lost purchasing power of those dollars, not including
the needs of an increasing population. Maybe the Republicans can resist the
temptation to spend more, but another eight years and half the budget will
have inflated away — that’s a lot of pressure.
Reason Four: They fought bitterly over thirty billion dollars in spending cuts
over the past two years, with threats of shutting down the government. But
now they have won the election and control Congress. Surely it’s time for them
to spend money on things they want to spend money on. Why else would they
say, “We will not shut down the government.” And addressing their concerns
over the national debt at the same time, they might raise taxes to reduce it.
Let’s say six hundred billion in new spending every year.
Assuming all these things come to pass, we could see top tax income rates
rise above seventy percent. On the other hand, Republicans might resist
temptation and pressure, foreign economies recover, and the Federal Reserve
pushes the markets into a panic over QE4. But what sort of crazy, twisted,
messed-up world would that be? Hm…
via International Skeptics Forum http://ift.tt/1rsl2bH
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