Tax Cuts

Bill Bonner has some interesting comments on the US tax cuts.

Here’s our simplified guide to tax reform:

• The poor have no money.
• The middle class has no lobbyists.
• The rich have no desire to pay more.

But why should giving the rich more money stimulate output? Are they having trouble making ends meet? Do they lack capital?

According to a new report by Credit Suisse, the richest 1% of the world’s population already controls half of its total wealth. They have plenty of spending money; giving them more is not going to appreciably increase consumption. And if they need more money, they can borrow at the lowest rates in history.

We’ve heard of no business in recent American history that failed… or failed to expand… because it lacked capital. On the other hand, thousands of businesses are failing because they lack customers.

Which brings us to the rest of the population – the part that isn’t rich… and has no lobbyists… the part that must earn and consume to make an economy run.

U.S. household debt hit a record of $13 trillion last quarter.