Responding to CRFB on the Biden Budget

 The reality is that we really can grow our way out debt - not by keeping the Trump/Ryan/Brady tax cuts in place but by giving more money to working class families, as proposed by the President. The phase out could be lowered, but in doing so the amount should increase for lower wage families. This money will all be spent into the economy, causing growth rather than inflation. Inflation chases the median dollar, not the median income. Cutting high wages and letting higher taxes return, as scheduled, will put us on the same path that Presidents Bush 43, Clinton and Obama put us on when marginal tax rates were increased.

In 2001, tax cuts were partially a response to the tech bust, but mostly due to the pathway of debt reduction. This is because funds that contain debt bonds and securities leverage investments in the speculative economy. The lower the debt falls, especially due to tax increases, the less leverage is available for bad investments such as home loan bonds, the tech boom and the housing boom which was fueled by Wall Street's demand for "safe" investments (that weren't).

In the current economy, the tax cuts that fueled the bond market secured by single family rentals has, again, produced junk and is leading to another depression, where asset prices will again fall below leveraged amounts.

When this occurs, the Biden budget proposals will prop up families with children while letting the wealthy feel the pain. When the next round of bailouts occurs, borrowers should get the benefits promised them in 2008 (which did not materialize). This time, both mortgage debt and credit card debt should be marked to market for any bonds the Federal Reserve purchases to keep liquidity in the economy.