The levers our governments have been pulling to steer the economy are reaching their maximum. The system where we reduce interest rates to spur spending to stimulate the economy (probably) don’t work when interest rates negative.
TLDR It's time for the government to tax and spend.
[1] https://www.brookings.edu/blog/up-front/2019/06/25/six-facts...
[2] https://www.theguardian.com/business/2019/jan/30/historian-b...
Wealth tax.
HAHAHAHAHA
If anything, a wealth tax is what turns things from "depression" to "catastrophic failure" - capital flight would be a massive problem. And even ignoring any effects from changing incentives, why would taking from the most productive and giving to the government improve the economy?
And if you do... A lot of public pensions are worth 2+ million. Are public pensions supposed to be excluded? How does that get explained to the voters?
Keep in mind, the problem isn't people with single digit millions of wealth, the problem is those with tens, hundreds of millions, and billions of dollars.
Look, there's two kinds of taxes. One is to raise revenue, one is to punish behavior we don't like. Once you start describing the rich as a problem, it makes me think that this is the second kind of tax, and I really don't think that accumulating wealth, and helping out everyone else along the way by growing the economy, is something we should be punishing.
If you say "the uber-rich ($10m is 99th percentile) do bad things, therefore we should tax the uber-rich", I'll really have to disagree - tax the bad things they do, not the demographic group!
The latter doesn't follow the former. In fact, consolidation of wealth is a hindrance to volume of activity outside the bounds of the owner of that wealth's interests. Case-in-point: Wal-Mart has done gangbuster business over the last half century. They've grown our economy. Almost every community its touched has been devastated by this, from the destruction of other businesses within its purview; to the flooding of the market with cheap goods that - in many cases - do nothing for society in their cheapness, and which actually create issues of overconsumption and waste; to the negative effects their influence has had on the shape of welfare. It's not about what Wal-Mart does; its very existence at its size is destructive. The only positive thing it did was grow the overall economy, which is like celebrating a tumor growing your overall lean mass.
The over-aggregation of wealth is the problem. A wealth tax is the direct solution (it does not have to be permanent or perennial). Wealth flight is a fantasy, and for anyone who tries, the federal government has access to the resources necessary to make sure everyone pays their fair share.
I would highly disagree there. The ills you describe aren't caused by Wal-Mart being big, they're from the business model itself. 100 independent companies spread across the country would be similar.
> The over-aggregation of wealth is the problem. A wealth tax is the direct solution (it does not have to be permanent or perennial). Wealth flight is a fantasy, and for anyone who tries, the federal government has access to the resources necessary to make sure everyone pays their fair share.
Because I certainly trust the US government not to come back to the money spigot after using a wealth tax the first time. Not.
As for wealth flight - dafqu you mean it's a fantasy? Does "facebook exec renounces citizenship to avoid capital gains tax" not ring any bells?
Sure it will. We're just in the early stages of the government abusing the Fed & USD for spending expansion, they've yet to begin getting truly outlandish on what could be done. They'll pump up the government spending projects, directly funded (subsidized) by the Fed's policies. It will continue to work at least for a while yet. 30 more years at a minimum, based on what Japan was able to manage (with a weaker currency (ie not the global reserve currency), in a weaker economy, lower incomes, with far less wealth to debase).
Negative rates means you get a 'free' national high-speed rail project. You get 'free' $2 trillion in infrastructure spending. You get 'free' expansion of Medicare down the ladder and Medicaid up the ladder (likely lessens the tax hammer short-term anyway). I mention those things because the next President after Trump is guaranteed to be a Democrat and is guaranteed to pursue some variation of those general things (high-speed rail is questionable, unfortunately). We're likely to enter a window in the next decade, where the US can float a trillion dollars for 30 years at 0.5% or lower. We desperately need to violently take advantage of that small window of opportunity to build a national high-speed rail network and pull off a once-in-a-generation repair of our infrastructure. The voters will support it in that time frame.