Oct1-5 Eco Calendar: Debates, De Oil, De FOMC, 2nd QTR Rept's, Europa......Overwhelming
Let's see, we have three Fed Chiefs talking up stimulus, now, 2013 and 2014, and the wonderfulness of the current QE's 1 and a 2 and a 3. That all happens before lunch. Then we have to look forward to Romney getting eaten alive on Wednesday's kickoff debate.
I'm told Romney may have a surprise to offer. It's called a platform.
Earlier--last year--I said the Dems would not win the election, it was for the Republicans to lose. Well, there they go again.
I also said, we have to stop electing the affable, and vote your pocketbook, jobs jobs jobs. All the Dems have to do is ask other than reduce taxes, which worked when marginal rates were north of 70% under Reagan (with a "healthy" 400% pop in the National Debt supplying money to the Pentagon to fight Russkies already bankrupt by 1978--I was helping US Army troop redeploy by the battalion OUT of Germany in the wake of the knowledge Russia was impotent). Why the National Debt pop? Reagan's tax cut lost more revenue than intended. Highly stimulative, today's different-we already enjoy rock bottom rates.
Then inflation was rampant-the top income tax rate went from 70% to 50 the bottom from 14% to 10. Reaanomics had bipartisan equanimity though economists screamed it was MORE inflationary. CPI had soared under Carter, unemployment a "staggering" 7%.
Economists said budget deficits were a key cause of inflation--the Reagan tax cut would make inflation worse estimating it would add 2.7% to the inflation RATE by 1983. Reagan's folks thought that pop would be overcome by more employment which would reduce inflation if, concurrently Volcker popped irates and lowered money supply. Wrong again. Tight money led to another recession 1981-2, THAT brought inflation down to 3.8 percent 1982-3. The tax base shrank like a teen leaving a cold shower. The federal funds rate was more than 14 percent, leaving plenty of easing to go. Result: the 1980s were was powered by tax cuts, falling inflation and lower irates--all from nosebleed levels. Notice, we aint at tax rate inflation rate noosebleed levels today..
Income tax rates run are 35% not 70%, revenues are 15% GDP versus 20 circa 1981. Inflation is lower-so far-overnight rates near zero. Today's eco environs are the exact opposite of the Reagan era. We can't just copy Reaganomics.