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Yavin4

(35,357 posts)
Fri Jul 12, 2019, 12:08 AM Jul 2019

Why does the Fed need to lower rates again after the massive tax cut last year?

Shouldn't the reverse be true? According to Republican dogma, tax cuts make the economy go super sonic. So much wealth that the Fed is forced to slow things down because everybody and their dog are just raking in the cash.

So, shouldn't we be in a booming economy right about now? Shouldn't the average pay for workers be skyrocketing because of all the great jobs created by the now lighter taxed corporations?

I mean, the Feds only lower rates at the sign of economic problems, but that shouldn't be the case because of the tax cuts. Am I right?

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Why does the Fed need to lower rates again after the massive tax cut last year? (Original Post) Yavin4 Jul 2019 OP
Only one reason leftieNanner Jul 2019 #1
Nope, there's another customerserviceguy Jul 2019 #5
Because the supply side, trickle down, tax "relief", Laffer Curve, voodoo economics don't work. Midnight Writer Jul 2019 #2
Isn't it weird how republican tax cuts have never helped the economy gtar100 Jul 2019 #3
We've had two massive tax cuts in this century, Bush II's and Trump's. Yavin4 Jul 2019 #9
Or is it to artificially lower prices/payments Buckeyeblue Jul 2019 #4
Trump wants to keep the economy humming for the 2020 election. sinkingfeeling Jul 2019 #6
Exactly wysimdnwyg Jul 2019 #8
So, what do we do when the inevitable recession comes and rates are already low? Yavin4 Jul 2019 #10
That's the issue wysimdnwyg Jul 2019 #12
They tried to do that in 2008... Wounded Bear Jul 2019 #11
You know why. To help The Fraud get re-elected. Claritie Pixie Jul 2019 #7

Midnight Writer

(21,548 posts)
2. Because the supply side, trickle down, tax "relief", Laffer Curve, voodoo economics don't work.
Fri Jul 12, 2019, 12:33 AM
Jul 2019

Except for the already wealthy.

gtar100

(4,192 posts)
3. Isn't it weird how republican tax cuts have never helped the economy
Fri Jul 12, 2019, 12:39 AM
Jul 2019

but they all continue to swear by them. The only real effect they have is to drive more wealth into the hands of fewer and fewer people. Their effect has been the economic inequality we see today. Even after 40 years of economic anxiety they just keep on saying the same thing - cut taxes, cut taxes. Why, it's as if they don't want to give anything to fund our government and prefer to just tear the whole thing down. Yet they have no plans or goals after they've destroyed it. Short-sighted, narrow-minded and selfish...that's today's republican.

Yavin4

(35,357 posts)
9. We've had two massive tax cuts in this century, Bush II's and Trump's.
Fri Jul 12, 2019, 10:31 AM
Jul 2019

Yet, the net effect of both on the larger economy is either negligible or negative.

Buckeyeblue

(5,491 posts)
4. Or is it to artificially lower prices/payments
Fri Jul 12, 2019, 12:59 AM
Jul 2019

That have gone up due to tariffs? A number of people buy cars based on the monthly payment they can afford. If car prices are higher and interest rates are higher the monthly payment cost becomes prohibitive. However, if interest rates are lower, the monthly payment will decrease.

I was skeptical about the aggressive increases when there were no signs of inflation.

sinkingfeeling

(51,279 posts)
6. Trump wants to keep the economy humming for the 2020 election.
Fri Jul 12, 2019, 08:46 AM
Jul 2019

My broker said if feds lower rate, it will push any recession until after the election.

wysimdnwyg

(2,229 posts)
8. Exactly
Fri Jul 12, 2019, 09:17 AM
Jul 2019

We're already overdue for another recession. The Fed keeps playing with rates just enough to keep the economy going in the right direction, but they only have so much room with which to work. Trump just wants to ensure it doesn't go south until after the election because he knows he really only has one selling point. If we go into a recession before November of 2020, he has no chance of reelection. (Sure, he'll still get 40% of the vote, because that group of people wouldn't vote for a Democrat if said Dem was a reborn Jesus and the other choice was a cloned hybrid of Hitler and Satan.)

wysimdnwyg

(2,229 posts)
12. That's the issue
Fri Jul 12, 2019, 01:45 PM
Jul 2019

A recession is coming, and no one can stop it. Trump is just hoping the Fed can delay it until after the election. If it comes before then, his reelection chances go through the floor. For all of the bad that Trump has done (and for all of the "good" things the other side thinks he's done), it all boils down to what James Carville said: It's "the economy, stupid."

Now don't get me wrong. I truly believe we can beat that stain on human existence even WITH a strong economy. But if the economy goes south before the election, it will get a lot easier.

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