Government could tax to the point of reducing the ability to purchase and invest, that's correct. However, what I believe happened with Bush's tax cuts for the wealthy is this.
Instead of those moneys being used to create new businesses and jobs, or to increase productivity, they were used to purchase hedge fund and other deriatives. Leveraged at up to 90% they got a very high return on their investments.
The sector of the economy which did benefit was the increasingly predatory mortgage market. When that market started to collapse, the hedge funds had to call in their margins, there wasn't the money for it, and the folks who invested in them and the folks who enabled the investments were facing large losses.
Which Bush wants to prevent.
It's not as if America's competitive position was enhanced, factories renovated and methods modernized.
That's my "take" on it, and I admit it's coming from someone rather naive in these matters. Not a ditch I'll die in, but certainly a ditch I'd occupy until a better one became apparent.
Arf
Flame » in reply to That's not strictly true, Bowz
You're right in the broad sense, of course. I wonder if that was the case here.
The whole thread (53 posts)
- If the economy is fundamentally sound why is an instant $800 bailout necessary?
- Think of it as an economic "surge".
- Just had a terrible thought
- What we have just witnessed is the final triumph of Reaganomics, (n/t)
- No.
- Missed again.
- "I'm sorry, but people blaming this on capitalism or free-market economics are, to be blunt, ignorant on this subject, willfully or otherwise."
- And, on the subject of regulation and deregulation...
- No.
- "Why add to the burden to keep the wealthy, wealthy"
- Never trust the "this price is only good until you leave the showroom" deal. (n/t)