<p>Here I'm using "excess liquidity" not in reference to monetary policy, but to the concentration of capital at the top in regard to private citizens.  </p>

<p>This excess liquidity, for which the tax cuts in the early 2000's were certainly a major contributing factor (changes to taxation regarding capital gains, dividends, etc.), created a condition where there was more money than places to invest, which led to the re-purposing of legitimate financial interests to create a new "casino" for investors to gamble in.</p>

<p>Since trickle down is a limited-at-best redistribution method (an individual can only buy so many goods &amp; services, regardless of net worth), what is the thinking on possible repeat of 2008 re: the current US tax proposal (2017)? </p>

<p>i.e. Although the bill will certainly help legitimate small businesses in relation to how pass-though income is treated, the benefits will also be utilized by high-net worth individuals taking advantage of the pass-through rules.</p>

<p>Note: This question is not meant to be political.  Rather, my primary interest is in stability/instability, and how that is affected by tax and monetary policy, particularly in creating conditions for catastrophic "market corrections" that can result in sharp, persistent spiking of the national debt.</p>

CC BY-SA 3.0
2017-12-13T22:00:15.350Z
Does your whole question relate specifically to the US?  If so please indicate this prominently, eg in the title.  This is an international site.
Adam Bailey
CC BY-SA 3.0
2017-12-13T22:10:27.107Z
@AdamBailey thanks for the advice.  I've updated to specify the US, since this does touch on tax policy/debt in regard to the US.
DukeZhou
<taxation><liquidity>
How did "excess liquidity" in the US contribute to the 2008 crash?
DukeZhou
# How did "excess liquidity" in the US contribute to the 2008 crash?

(Asked by: username_0 on 2017-12-13)

Here I'm using "excess liquidity" not in reference to monetary policy, but to the concentration of capital at the top in regard to private citizens.

This excess liquidity, for which the tax cuts in the early 2000's were certainly a major contributing factor (changes to taxation regarding capital gains, dividends, etc.), created a condition where there was more money than places to invest, which led to the re-purposing of legitimate financial interests to create a new "casino" for investors to gamble in.

Since trickle down is a limited-at-best redistribution method (an individual can only buy so many goods & services, regardless of net worth), what is the thinking on possible repeat of 2008 re: the current US tax proposal (2017)?

i.e. Although the bill will certainly help legitimate small businesses in relation to how pass-though income is treated, the benefits will also be utilized by high-net worth individuals taking advantage of the pass-through rules.

Note: This question is not meant to be political. Rather, my primary interest is in stability/instability, and how that is affected by tax and monetary policy, particularly in creating conditions for catastrophic "market corrections" that can result in sharp, persistent spiking of the national debt.

**Tags:** taxation, liquidity

> **Comments:**
> **username_1**: Does your whole question relate specifically to the US?  If so please indicate this prominently, eg in the title.  This is an international site.  
> **username_0**: @username_1 thanks for the advice.  I've updated to specify the US, since this does touch on tax policy/debt in regard to the US.  

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## 0 answers

