Tax Cuts and Interest Rates
The article argues that tax cuts do not raise interest rates, citing historical data and economic realities to support the claim. It discusses the impact of borrowing on interest rates, the role of global capital flows, and the potential benefits of tax-driven growth policies.
Key Points
- Interest rates have not risen significantly despite a substantial increase in U.S. debt-to-GDP ratio.
- Global capital inflow and other factors contribute to keeping interest rates low.
- Tax policies should focus on promoting productivity, rewarding work, and stimulating private sector growth.
Pros
- Tax cuts do not necessarily lead to higher interest rates, as demonstrated by historical trends.
- Global capital flows and other factors play a significant role in shaping interest rates.
- The article advocates for tax policies that boost productivity and encourage private sector growth.
Cons
- The article may oversimplify the relationship between borrowing, interest rates, and economic growth.
- There is a risk of overlooking potential negative consequences of increasing federal debt.