Taxes

Fed Officials Say GOP Tax Cuts Could Lead to Recession

JM Ashby
Written by JM Ashby

Hyperinflation is always just around the corner, isn't it? That's what conservatives tell us. They say big government spending will eventually transform the United States into Zimbabwe.

That's never going to happen even if Republicans give it their best shot, but Federal Reserve officials do say the GOP's tax cut proposal could lead to inflation and even recession.

Slashing personal or corporate tax rates could boost short-term growth as households and businesses spend more, Fed policymakers acknowledged, but those benefits could prove short lived due to broad trends like population aging and rising indebtedness. [...]

Unless targeted to raise productivity and underlying potential, a tax cut could feed "unsustainable" growth that could ultimately be undone by asset price bubbles, inflation and possible recession, San Francisco Fed President John Williams told reporters on the sidelines of a community banking conference here on Thursday.

That sounds familiar, doesn't it?

I don't think we need a reboot of the original film staring George W. Bush.

  • Tony Lavely

    I was thinking you could shorten the title:
    “Fed Officials Say GOP Could Lead to Recession”

  • Aynwrong

    WORD!

    I don’t think we need a reboot of the original film staring George W. Bush.

    • Tony Lavely

      I don’t know, I kinda liked staring there…

      • Aynwrong

        Really?

  • If the GOP tax plan passes me and the hubby are going to have to get creative and find some other ways to get deductions. Guess I’ll have to start up a home run business or something. I’ve done it before and I never really made a profit but the tax write offs might get us through until we have some sane people in Congress and the WH again. That’s my optimistic take on things. My gut OTOH says we will all be screwed and we will definitely have a recession–maybe even without their idiotic tax plan.

    • JMAshby

      Ideally, you won’t have to worry about it because the GOP will utterly fail. I still see them passing some basic tax cuts with no pay-fors, meaning your deductions will be safe.

      Then again, Trump is working overtime to piss off the Senate Republicans he needs to pass anything at all.

    • ninjaf

      We have plans to put our house up for sale in the spring. I feel like a crazy conspiracy theorist but I see them enacting all of the same policies from the W administration that led us to the 2008 recession and we just can’t take the risk that the economy won’t collapse like that again. We just bought our house in 2014. The only thing that saved us in 2008 was that we had been in our house for over 12 years. We both lost our jobs and had to sell our house in automotive land in February 2009 to move to where the jobs were. Even with 12 years of equity, we still had to pay $5,000ish to get it sold.

      I hope we sell and then feel like we were idiots for being such ‘fraidy cats. But we just can’t take the chance.

      • I’m sorry to hear that. It’s stressful selling a house even under the best conditions. Good luck and I hope that all of our negative predictions do not come true.

        • ninjaf

          Thanks. Me, too. Like I said, I would rather feel foolish in a couple of years than have my fears confirmed.