As I understand it ..and can you explain how this is going to work to help solve our economic crisis?

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If the taxes go up on the wealthy earners ($250 k +), there will be about $80-85 billion more revenue for the government each year.  (An amount I am told funds the Federal Government for only about 8-9 days.  That is not very long.)

Meanwhile, per the WSJ today, the Federal Reserve plans to “purchase $85 billion a month of mortgage backed securities and Treasury securities..”  (The yearly total will be more than ONE TRILLION dollars 0r 12 times the amount the Federal Government will get with an increased tax on the big earners.)

Where is the Federal Reserve going to get $85 billion a month/ the one trillion + a year?  Taxing the big earners more as is the President’s plan will only pay one month of the Fed Reserve’s plan.  

Obviously the Fed has only one source for its new plan – it is going to just print money..and you know what happens when you just print money (inflation!)  

So is this a good idea?  Let’s dig a bit deeper..

The Fed’s purpose (per WSJ) of spending $85billion a month is to “drive down long term interest rates to encourage borrowing, spending and investing.” There is a slight problem with their purpose — the ones with the money who will supposedly do the borrowing (you need to have money to borrow money) with the lower rates, do the spending and then do the investing will have less money to do it since they are being taxed more with the President’s proposed tax increase.  

The big question is what happens if you don’t tax the big earners come January 1?   What will the big earners do? 

If you don’t tax the wealthy in the first place as the President now wants to do, will the big earners do ‘borrowing, investing and spending’  (the Fed Reserve goal) with the money that is not taxed under President Obama’s plan?  or will they simply save the money and put that money under the mattress and not recycle it through the economy.   It is the recycling through the economy that we need — that is what will rev it up and we need it rev’d up.

OK…now tell me why you think I am wrong…maybe I am.  

Bottom line:  I want or economy roaring so that people have jobs and I want the economy roaring now (actually, yesterday!)  I am open to all good ideas…so help me understand this problem and what is the best solution.

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