Monday, October 24, 2022

Why would it make sense to pay more tax-credits to those holding tax-credits? — Clint Ballinger

Imagine a new democracy imposes taxes on itself; the tax-credit is then spent, taxed back, thus provisioning public goods in the process.

Not all spending is taxed back, thus the public has savings of tax-credits.

Why would it make sense to pay more tax-credits to those holding tax-credits?....
ClintBallinger.com
Clint Ballinger

4 comments:

Matt Franko said...

https://www.wsj.com/articles/banks-are-offering-4-5-cdsjust-not-to-regular-customers-11666553764

4.5% CDs..

Clint Ballinger said...

I only mean the state paying interest on the tax credit (mainly saved as sov bonds).
Bank regulation a different issue.

I meant to mention also - not only is "the dual mandate" not something a CB can effectively carry out - developing countries in effect have a "threefold mandate" which is even more absurd - full employment, inflation, AND exchange rate. Absurd to think interest rates are the way to achieve any one of these, much less all three at once.

Matt Franko said...

It’s not a “Dual mandate”

The Act reads “maximum employment with stable prices”..

The preposition “with” does not imply duality,.. the conjunction “and” does…

The language requires stable prices to complement maximum employment… not compete with it…

Matt Franko said...

Maybe they are beliving Minsky “stability creates instability!“ so if they destabilize the policy rate then that will eliminate the possibility of instability of prices?

To prevent instability they cannot maintain any stability as that will create instability which is what they are trying to avoid… … so the rate cannot be stabilized at zero for any term of issue including overnight…

The rate cannot be stable…