We don’t think this is likely:
- Previous experience hasn’t shown it
- The Reagan revolution is overhyped, growth didn’t accelerate whilst inequality rose
- Today’s conditions are even less conducive, corporate tax income has fallen for decades, profits are at record highs, so are corporate cash balances, interest rates are at record lows. That is, corporations have plenty of funds to invest.
- Instead they pay out almost all profits in dividends and stock buybacks, strongly suggesting the problem lies in corporate governance.
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