Quote:
Originally posted by taxwonk
The consumer confidence index is based on more than just how consumers feel about the economy in a general sense. It is based on a poll asking five specific questions ceoncerning the respondents' feelings about income and employment prospects as well. If you don't think you're going to get a raise, or you don't think your kid, who is graduating this year, will be able to get a job and go off the tit, then you will have a negative impact on consumer confidence. It is not diirectly tied to whether or not you plan to buy a new Xbox.
Linky
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Okay, now can you explain to me why it's a good thing to cut taxes to inject more capital into the system to spur the economy at the same time the Fed is jacking up interest rates to lower available capital to slow down the economy and prevent inflation?
Isn't the net effect just a transfer of income from the government to the banks (on a macro level - obviously, individuals affected by the tax cut may or may not be the same as those affected by interest rate hikes)?
