Feds warn Trumps tax plan could lead to inflation and unsustainable federal debt

[applegrove]

By Reuters, Politicus USA

http://www.politicususa.com/2017/10/05/feds-warn-trumps-tax-plan-lead-inflation-unsustainable-federal-debt.html

SNIP............


By David Morgan

WASHINGTON (Reuters) – Congressional Republicans moved to hasten an overhaul of the U.S. tax code on Thursday, while Federal Reserve officials warned in rare public remarks that President Donald Trump’s tax plan could lead to inflation and unsustainable federal debt.

......

Trump and top Republicans in Congress hope to enact a package of tax cuts for corporations, small businesses and individuals before January, pledging that sharply lower taxes will boost U.S. economic growth, jobs and wages.

But Federal Reserve officials questioned this rosy scenario, saying the Republicans’ proposed tax cuts could deliver a short-term growth surge, but also bring high inflation, burdensome government debt levels and an eventual return to sub-par economic growth.

Unless targeted to raise productivity and underlying potential, San Francisco Fed President John Williams said a tax cut could feed “unsustainable” growth that would ultimately be undone by asset price bubbles, inflation and possible recession.

Fed officials generally refrain from commenting on fiscal policy, but the Trump administration is proposing $6 trillion in personal and corporate tax cuts at a time when many economists feel the country does not need massive stimulus.

............SNIP

[Eliot Rosewater]

1. Neither of which will bother the 1% very much, so expect this to go forward.

I wonder what those middle class trump voters will do when it becomes clear the agenda of their leader.

I think I know, they will blame you, me, Obama, etc.

[wasupaloopa]

2. It is the same play they run when ever they are in charge.

Cut taxes, claim economic growth, it doesn't happen but bigger deficits do happen then the call to cut Social Security, Medicare and Medicaid. All the while the economy goes into the tank.