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A Recipe for Massive Gov Spending

Written by Staff Writer
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fall 163496 640A Recipe for Massive Government Spending -Rickards/Daily Reckoning
"Leading Democratic presidential hopefuls Elizabeth Warren, Kamala Harris and Bernie Sanders have expressed desires to increase income taxes to 70% or even 90% on the rich, impose 'wealth taxes' on their net worth and impose estate taxes that are equally onerous when they die....

Don’t assume you’re exempt just because your annual income is lower. Those tax thresholds are on wealth, not income, and could include stocks, bonds, business equity and intangible business equity for doctors, dentists and lawyers....The leading Democratic candidates for president and numerous members of Congress have come out in favor of Medicare for All, free child care, fee tuition, a guaranteed basic income even for those unwilling to work and a Green New Deal that will require all Americans to give up their cars, stop flying in planes and rebuild most commercial buildings and residences from the ground up to use renewable energy sources only. The costs of these programs are estimated at $75–95 trillion over the next 10 years. To put those costs in perspective, $20 trillion represents the entire U.S. GDP and $22 trillion is the national debt....The big spenders have a simple answer to the complaint that we can’t afford it. Their answer is, 'Yes, we can!' That’s because of a new school of thought called Modern Monetary Theory, or MMT. This theory says that the U.S. can spend as much as it wants and run the deficit as high as we want because the Fed can monetize any Treasury debt by printing money and holding the debt on its balance sheet until maturity, at which time it can be rolled over with new debt....There are serious problems with MMT (not the ones Jay Powell and mainstream voices point to). But very few analysts can really see the flaws."