Myth Vs. Reality
One of the selling points for tax cuts for the upper 2% is that they will invest the extra money and businesses will expand.
Back on September 13, 2010 Timothy R. Homan of Bloomberg wrote that Rich Americans Save Tax Cuts Instead of Spending, Moody’s Says
Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it.
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.
They aren’t spending or investing the tax cuts, they are “stuffing the money in their mattresses”, a lot of this in the form of Treasury bills. They don’t listen to the pundits that are always wrong, or to fools like Greenspan, who was shocked to discover that the financial sector was filled with a greedy criminal class, they made their money and keep it by paying people to tell them what is really happening. They know that they will greatly increase their real assets by hoarding money in the face of the coming deflation. They are also funding the propaganda about the threat of inflation to dump their inflation hedges, like gold and art, things they intend to buy back after the prices tank.
Selling high and buying low is just as good as the normal way it is expressed. No matter which order you do it in, you make money.
November 13, 2010 4 Comments
