Quote:
Originally Posted by GGG
Interest rates is slow and stifles companies ability to increase production and invest in optimization as they still need to hit dividend targets and lots of debt covenants are based around LIBOR.
If your goal is to suck dollars out of the economy taxation is the fastest way to it AND instead of increasing debt servicing costs with prime rate increases you pay down debt.
Essentially if you are going to do economic damage at least pay down debt while you do it.
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We've been balls deep into Modern Monetary Theory for a decade now, which specifically says print money like mad to keep employment high, then when things get overheated, raise taxes to restore balance.
No surprise politicians are only willing to use the publicly palatable part of the system (print money).