Higher Taxes and Interest Rates

Stephen Williamson puts out a thoughtful short Piece; read it carefully three times, then ask yourself how much truth can be found in it. The New Keynesians are themselves responsible for the sticky price function, while the New Monetarists produce their own lack of liquidity. Both step away from natural market formulation, inciting unemployment and over-extension of debt. Each outline why Government should spend funds which the institution does not possess, and both demand such funds not increase through taxation of any type. Does this really seem like a sensible policy when championed through decades of Government interference in the economy?

I have long been an advocate that the Fed set the Overnight rate at 4%, and leave it there. Such a high Interest rate does not provide real obstruction to business performance, and grants Investment a necessary base of Profitability. It guarantees a protected platform of Savings for Labor not directly associated with Finance or the Market structure, and supplies adequate Consumption funds to a significant level of Consumer Demand. There is the unequivocal Statement that economical policy can make business performance too easy for business, allowing them to maintain inefficient Production operations with a vastly reduced Work load for themselves. Business ownership or management should not mean that one can spend 6 months of the year in leisure activities. There is something to fear in the fact that the Poor are still able to purchase Necessities, while the upper classes are still spending furiously; all while the middle classes are descending into poverty.

The above information may not make sense to some, but I will state for the Record that Consumption levels actually depend on the Income levels of the middle class. Provision of Consumption for the Poor only brings about a 4% Production profitability in tradition, with privation and reduced Consumption follow for the Poor when prices are raised. The Wealthy employ massive numbers in the luxury sectors in provision for themselves, but they gain such Income from control of the provision of Consumption for the middle class, where Production Profits often reach a real evolved level of 12%; potentially 20% if self-financed. The real threat here lies in the necessity of the middle class to handle the actual labor of Production, supplying it for Poor and Wealthy alike. Current Interest rates and economic policy ensure that the middle class is only receiving the Income rates of provision for the Poor, while paying highly similar rates to that paid by the Wealthy for a massive number of their own necessities. Such a system will obviously have a high rate of breakdown, hardly sustainable for half a decade at a time. The trouble comes when Recovery funds are drafted from the middle class who cannot afford the draft. It is kind of a sad thing to say for a man who is an advocate of both higher Interest rates and higher Taxes, but both the Poor and the Wealthy need to pay higher Taxes, and no one should escape the Costs of either Production or Consumption. lgl