He's not a Trumper! He has a wide body of work here and has always provided thoughtful and well reasoned content. He also happens to be one of the few people here who has actual professional finance experience. I'm on your side, believe me, and for that reason especially I'm saying its important for us to be thoughtful and reasonable in turn.
that’s pointless. Legimately you could only get 20k if you had 1 employee. And at that much it probably is not fraud. Likely those cases were outright fraud. There’s a company in my town that got 10mm and listed two employees. I asked around and know one knew who they were (I live in a small town). The bankers who processed the loan might have a problem as I think they are on the hook for that.
Both of these statements can be true. But one has to be careful not to jump to the conclusion that "more businesses are moving in" and "vibrant" economy" because "tax cuts [were introduced]." One has to consider another factor which often dominates, and that is Government Spending. When government spending increases it raises both tax revenues and the vibrancy of the economy and may or may not increase inflation, which also increases nominal revenue. It is a very difficult problem in economics to sort out the net effects of these interdependent factors. [See for example: "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," Christina D. Romer, David H. Romer, in American Economic Review 100 (June 2010) Pgs 763-801.]
I think that's probably correct. We had huge stimulus in the form of stepped up spending on top of the tax cuts coming at a time when we were at virtually full employment. At the time, I was wondering what the economic response would be, as this was blazing new ground economically. The response was apparently very large deficits and some inflation, but muted and delayed.. . Then the Pandemic took hold, and that reduced the velocity of money. The Fed responded by curtailing it's bond selling program that it had only months before embarked on in a long range program to reduce its balance sheet and boost interest rates.. The Treasury responded with Covid relief payments which compensated for the drop in velocity and headed off what could potentially have become deflation and a depression. (This pandemic caused recession was peculiar, as it was largely a service sector and related recession.) We'll be in better hands now, but still a difficult time to navigate economically. I anticipate as we recover and folks get back to work in the service sector that it may be necessary for the Fed to start withdrawing some excess money from the economy. They'll do that by selling bonds. I would prefer introducing more tax brackets and raising rates in the upper most brackets as that doesn't incur future treasury liabilities and increase the potential for future forced economic constraints due to non-discretional, mandatory bond servicing. These two means, bond sales vs. tax increases, of damping down an economy threatening to over heat are not exact equivalents. For one thing, raising top marginal rates and introducing more brackets has long range societal benefits that bond sales lack, but that subject is taboo, so you won't find me mentioning it.
Hey what do you know all time stock market record highs and all time record highs in Fed balance sheet assets (again with this past Weds' report). And all along I thought Pres TweetTweet was responsible :-
This is either euphoria over a Biden Win (see next sentence), or its the too eager shorts being squeezed out. My guess is that there was a lot of money on the sidelines sitting out the chaos of the Trump Presidency that would now like to re-deploy.