America the Beautiful

Alan Zendell, December 17, 2018

With a couple of business weeks still to go in 2018, corporate stock buybacks have already passed $1,000,000,000,000 (that’s one trillion dollars) for the year. That’s the same amount that our national deficit is predicted to exceed in 2019, because of the 2017 Tax Cuts and Jobs Act. Is that a coincidence?

Let’s examine the question in simple terms, free of politics and hype. “The immediate effects of a tax cut are a decrease in the real income of the government and an increase in the real income of those whose tax rates have been lowered.” If government revenue drops and spending is not reduced, deficits rise. It’s just like what happens to you and me if we take a pay cut while our cost of living stays the same – our credit balances (debts) rise and/or our savings (cash reserves) decrease.

What about buybacks?…

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