i'm not an economics major or anything, but i am extremely interested in the relationship of interest rates and taxes on the economy. the following idea occurred to me a long time ago when i first started paying attention to economic issues in an attempt to better understand class politics:
Point#1) my understanding of he Fed is that one of its main purposes is to raise interest rates when the economy is getting too "hot" (and vice versa.)
Point #2) the standard argument against raising taxes on the rich is that it will hurt the economy.
well, it seems to me that if the economy were getting too hot, ie., growing at too fast a pace, then instead of raising interest rates to cool it, maybe we could accomplish the same thing for the economy by raising income taxes on the rich, and in so doing also balance the budget.
more on the flip
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