Williams paints benign picture of Fed rate hikes, strong US economy
The Federal Reserve should raise interest rates three times this year given the already strong economy will get a boost from tax cuts, and can tighten more or less aggressively if needed, a key U.S. rate-setter said on Saturday.
Read more at https://www.channelnewsasia.com/news/business/williams-paints-benign-picture-of-fed-rate-hikes--strong-us-economy-9839364
07 Jan 2018 06:10AM
Ricky Lim ·
The Trump administration argues the tax cuts will boost both business and consumer spending. But the individual income tax cuts are skewed toward higher-income households, which economists say have a low propensity to consume more as taxes fall.
Many economists also believe companies will use much of the windfall on stock buybacks and debt reduction rather than capital expenditure.
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This demonstrate that Trump justification for tax cut is flaw.
(1) Trump claim that companies windfall from tax cut will boost investment and create jobs - now it prove that it did not happen.
(2) Trump claim that income tax cut to household will increase consumer spending - now it prove that it did not happen as income tax cut skewed towards higher-income household - and can't consume more.
So for 40 years of such "Economy trickle down effect", what Trump argue is flaw - meant to deceive his people.
It has now proven true.
Many economists also believe companies will use much of the windfall on stock buybacks and debt reduction rather than capital expenditure.
--
This demonstrate that Trump justification for tax cut is flaw.
(1) Trump claim that companies windfall from tax cut will boost investment and create jobs - now it prove that it did not happen.
(2) Trump claim that income tax cut to household will increase consumer spending - now it prove that it did not happen as income tax cut skewed towards higher-income household - and can't consume more.
So for 40 years of such "Economy trickle down effect", what Trump argue is flaw - meant to deceive his people.
It has now proven true.
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