Despite Deficit, House Approves $56 Billion in Tax Cuts
By EDMUND L. ANDREWS
Published: December 8, 2005
http://www.nytimes.com/2005/12/08/politics/08cnd-cong.html?hp&ex=1134104400&en=180f3d878c4e1b4d&ei=5094&partner=homepage
The article explains the situation sufficiently. The crux of the problem, though, exists in the Inflationary pressure behind the Tax Cuts. We are talking at the minimum of some $75 bn additional unfunded Federal spending, no one stupid enough to imagine legislators and Senators will actually allow final vote reduction of Spending.
This Author is not a devotee of Monetarism, in any sense of the term, but the obvious increase of unfunded Federal spending would seem to nullify the drag of 3% of the nominal Overnight rates. No wonder Fed members are talking about neutral Interest rates. lgl
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