A Smaller Fed Would Be Positive For Growth: Malpass

Former World Bank President and Treasury Department official David Malpass believes the next US president faces a ‘perfect storm’ of economic issues, saying ‘uncertainty is what’s prevailing’ in the economy.
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[@ArkOmen1]

Great stuff from Mr Malpass!

[@bob___]

The guest uses Michigan as an example. Michigan is automobile-dependent, and cars aren't selling now because of price inflation and interest rate inflation. But the US government has essentially only two sources of revenue, income taxes and import/export tariffs. Other sources of revenue are denied the Federal government by the Constitution even though they are available to the states. Import/export tariffs have essentially been given up by membership in WTO. So the guest's idea of focusing on which taxes can safely be raised is very optimistic. In theory, one available route to fiscal health (and lower inflation) is to shift spending from the Federal government to the states. It's not clear how this would work, because businesses tend to shift activities to states with the lowest taxes (and fewest services). One possibility may be to base Federal taxes on gross income rather than net income (in the manner of a municipal business receipts tax), but it's hard to see how something so major could be done by a fractured political system. An alternative is to go the way of Javier Milei.

[@michael2275]

FJB

[@jocko4598]

Warren Buffet says that paying taxes never stopped him from investing.

[@acornsucks2111]

And who is not paying taxes?