/biz/ - Business & Finance

>>55678350
>Then the government will just provide more
stimulus, what's stopping them from doing that?
>pic related
We literally cannot afford to do so. We have seen a 20% decline in tax receipts in this same period from last year.
>Oh, well they can just issue more bonds, and borrow money, and use that money to stimulate the economy!
What is the government crowding out effect
https://www.investopedia.com/terms/c/crowdingouteffect.asp
>The crowding out effect is an economic theory that argues that rising public sector spending drives down or even eliminates private sector spending.
>To spend more, the government needs added revenue. It obtains it by raising taxes or by borrowing through the sale of Treasury securities. Higher taxes can mean reduced income and spending by individuals and businesses.
>Treasury sales can increase interest rates and borrowing costs. That can reduce borrowing demand and spending.
Not only will we have crowding out, we will also see a big spike in inflation
We are also approaching $1 trillion on debt service, we are at 129% debt/GDP
It is not sustainable, not possible
https://www.abc.net.au/news/2023-07-27/boomers-boosting-inflation-as-the-rba-lifts-rates/102610512
>boomers
>boomers
>boomers
>They tend to be older and they're enjoying higher asset prices and bigger returns from their savings.
Higher interest rates is very different for anyone who doesn't have a massive nest egg, doesn't already own a home - the drivers of consumption
>You don't need to own bonds to get high income from a high yield savings account
There aren't high yield savings accounts, which is why money has been flowing out of banks, into money market funds. This is also extremely bearish, as the banks are getting their balance sheets destroyed by capital outflows + real estate crash + inverted yield curve
>Does not matter at all
You will see. Henry Ford figured this out 100 years ago, when he realized his employees couldn't purchase the cars he was selling.

Daily reminder that we saw a 20% drop in tax receipts to June
Daily reminder that a recession has NEVER, not once in all US history, been avoided with a 20% drop in tax receipts
Never. Not once.
https://fiscaldata.treasury.gov/datasets/monthly-treasury-statement/summary-of-receipts-by-source-and-outlays-by-function-of-the-u-s-government
https://fred.stlouisfed.org/series/A074RC1Q027SBEA
> 20% less income, when the economy is "booming" and the market has had its best start in 50 years
Everything is fine.

>>55574407
https://fiscaldata.treasury.gov/datasets/monthly-treasury-statement/summary-of-receipts-by-source-and-outlays-by-function-of-the-u-s-government
Compared to last year
> -20% income (taxes)
Everything is fine. The economy is strong and resilient. As are the banks. Everyone is making more money than ever before. The consumer is strong.
Keep buying, anon.
>Finding examples where a recession was completely avoided despite a 20% drop in tax receipts can be more challenging, as it has never happened, ever.

https://fiscaldata.treasury.gov/datasets/monthly-treasury-statement/summary-of-receipts-by-source-and-outlays-by-function-of-the-u-s-government
Compared to last year
> -20% income (taxes)
Everything is fine. The economy is strong and resilient. As are the banks. Everyone is making more money than ever before. The consumer is strong.
Keep buying, anon.

https://fiscaldata.treasury.gov/datasets/monthly-treasury-statement/summary-of-receipts-by-source-and-outlays-by-function-of-the-u-s-government
Compared to last year
> -20% income (taxes)
Everything is fine. The economy is strong and resilient. As are the banks. Everyone is making more money than ever before. The consumer is strong.
Keep buying, anon.