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To: Hoodat

The problem is the uncertainty. Businesses don’t know what’s going to happen next, so they aren’t investing or expanding, just laying low until the storm passes. Since business won’t invest, cash reserves go up.

The last time this happened was during the Great Depression. FDR railed against the Evil Corporations for hoarding cash. The end result was the Undistributed Profits Tax (UPT) of 1936.

FDR recognized it was a mistake and repealed it in 1938.

Prediction: Some Dems will start proposing the UPT (or something like it) soon.


15 posted on 09/27/2010 10:58:18 PM PDT by Gideon7
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To: Gideon7; Hoodat

Now add looming trade wars and you’ve got the GD down pat.


20 posted on 09/28/2010 2:19:31 AM PDT by 1010RD (First Do No Harm)
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