I read this article, and ask What the author is trying to say; I imagine it is somehow to portray a ‘feel-good’ attitude towards the Fed. I hear that the Fed made a Profit of $45 billion this year, the highest in history, and not since 2007 has there been a previous high of $34.6 billion. Wait! Didn’t I read previously read that the Fed owned $1.8 trillion in Securities this year, up from $497 billion the previous year? I start counting on my fingers, and estimate this is a purchase of more than a trillion dollars. I really have to begin calculating here: $45 billion times 10 years equals $450 billion; $34.6 billion times 10 equals $346 billion, and these equate to the Fed’s best two years. Do I smell extreme leverage here, and was there not something about extreme leverage being the most compelling reason for the financial crisis. Americans may think that the Fed is some omnipotent Power, but it is only one central bank in a wide list of central banks in the World; though it may be the largest. They are indeed moving up the risk-return curve. I curse under my breath, and uneagerly await the ‘central bank’ Crisis.
Bruce Bartlett writes a nice little Piece denying the proclaimed effect of reduction in the Capital Gains tax rate in the 1990s. I regret that he did not take it a Step further, and compute the loss from reduction of tax rate on the 80% increase in Capital Gains not attributable to the Capital Gains tax. As in the prior paragraph, economic policy will eventually drive Us to the Poorhouse. We had real Gains from curtailment of federal expenditures back then, and dissipated those Gains with a Tax Cut, which was worsened under Bush II. One has to ask How we can claim a booming economy, when the largest player in the economy consistently sinks deeper into debt. I know the old adage that One has to choose his battles, but neither Democrat or Republican seems desirous of any attempt to hold down federal expenditures. It is like unto telling a 300-lb. Man that it is alright to eat a 5000 calorie/day diet. Both Republicans and Democrats are trying to be Summa wrestlers.
This is exactly the wrong way to attempt to curtail the debt, but one that may be propelled by Public sentiment. I can only say it is not likely to find passage. I would prefer a regulatory tax upon the very conduct of federal expenditures. Rental rates to just Park Work vehicles now range from $40-$600 per month, where charges are in-place. I would suggest that every entrance to every federal building have a Ticket vender in front of the metal detectors. The rationale is sensible; every entrant is desiring either federal aid, Wage, or Salary, unless they are seeking some expensive outsourced federal advantage. It makes sense to charge every Entrant a dollar per entry, a resident Parking fee much cheaper than for vehicles. There is also the possibility of charging a ‘kickback’ tax, where every federal agency and department must pay a Quarter for every paper form which they insist must be filled out; it at least pays for the paper and printing. The Savings from switching from Paper to electric impulses could equal millions of dollars per day. Lawyer fees are so high, that charging every lawyer $8 per day for pleading before a federal Court does not seem outrageous, while a dollar per attendance does not seem unreasonable for courtroom spectators. I would even charge federal employees some $.30/gallon for gas consumption within federal vehicles, simply to ensure that all trips are necessary. Most of these regulatory fees could be implemented without much Congressional action. lgl