"You finally said this. I've been wanting to tell you about this for a long time. In addition to the introduction of the Economic Recovery Tax Act and the period after the 'Star Wars' speech, the stocks of companies in the defense sector rose.

"Defense stocks have been falling for most of the time since you directed us to buy in Georgia."

"Keep the confidence! Powell, you can add positions at the appropriate time! Now that the investment business has been transferred to commercial banks, the restrictions are much smaller. I can also allocate 20 million US dollars for you to operate. Believe me, this is just before dawn.

dark!"

"Well, I understand that you may be betting on the dividends of the defense industry during the Republican administration, but today's federal finance is very pessimistic! Especially after the tax cut, although market vitality has recovered, generally speaking, the unemployment rate has not

Lower, but higher and higher!”

As a former manager of the Black Flag Savings Investment Business Group, Powell is really not as optimistic as Carter:

"As for the Fed's interest rate cut, it looks more like a temporary adjustment. Maybe it will rise again in less than two days? After all, the current inflation rate has not yet dropped to a reasonable range of 2%-5%."

"These are temporary, and the reduction in tax rates will also be accompanied by the expansion of the tax base. Federal finance. Haha, I have an idea at the root, but... you see, the defense budget will only grow sooner or later, and federal fiscal revenue will also

Rebound. I haven’t started working now, but my income is limited.”

Investing in the defense field can be said to be something that anyone with even a basic understanding of the United States would do during the Republican administration. But the situation is, as Powell said, continuous investment in company stocks in the defense field.

The current return rate is pitiful, and the stock price has not seen any significant increase.

At first, Carter even doubted whether he had made a mistake in his estimation, but now, Carter has matured a lot and has figured out a lot.

First of all, the defense sector will definitely rise!

Just like the defense sector surged after the 1980 election. In addition to the Republican president Reagan taking office, there is actually a little-known information hidden in this federal government. That is, the Republican Party occupies the Senate.

majority of seats!

Carter forgot that this was the first time in 25 years or so that the Republicans occupied the Senate, but this does not affect the overall situation. The president is a Republican, and of the two houses of Congress, the Senate, which occupies the core position in the United States, is also a Republican.

These two Republicans come together and you say defense stocks won’t rise? Isn’t this unacceptable?!

But then, after Reagan came to power in 1981, the defense budget did not increase. The first thing he did when he came to power was to cut federal government spending. Although the knife has not fallen on the military for the time being, this is obviously not a good sign.

After struggling for a while, there has been no information on large-scale contract procurement bidding from the Ministry of National Defense or the service headquarters, and investors have lost confidence in the defense sector.

After a lot of effort, he came up with the "Star Wars" project. People thought he was finally going to take action. Carter thought so at the beginning. As a result, it seemed that the thunder was loud and the raindrops were light, but no actual money was seen. Instead,

Federal spending is still shrinking.

Almost all the departments that could be laid off have been laid off.

This kind of repeated jump can't help but make people feel nervous. Even Carter, if he hadn't had foresight, might have doubted whether Reagan was a qualified Republican president.

Jimmy Carter could even lose the Senate.

At least for now, given the example of the "most failed" American president, how much trust the public has in Reagan is open to question.

Who knows if he might also be a "deviant" Republican?!

After doing this five times and three times, Powell was also afraid.

But as the study progressed, Carter became less afraid.

"You've probably never heard of the Laffer Curve, right?"

"What is that without?"

"That is the curve of the relationship between tax rates and fiscal revenue proposed by an economics professor at the Graduate School of the University of Southern California. They believe that a 100% tax rate will cause all production activities in the monetary economy to stop. All people's labor income will be

If the government levies it, no one will be willing to work, social supply will be 0, and the fiscal revenue it can bring to the federal government will also be 0."

Powell frowned slightly:

"So, you are saying that the tax reduction in the Economic Recovery Tax Act is to stimulate production through tax reduction, thereby increasing social supply and thereby expanding the tax base?"

"Yes, their school of thought is also called the supply school. They believe that the government can expand supply and then expand the tax base to obtain higher fiscal revenue. As far as I know, that Professor Arthur Laffer is currently our

Financial Advisor to the President."

Playing with the pen in his hand, Carter said slowly:

"Compared with the traditional method of stimulating demand and driving the economy, the effective cycle of increasing supply to stimulate economic activity will be slower. It takes time to cultivate the tax base, but I believe that this is only temporary. At this time, we must ensure tight currency

If the policy remains unchanged, it is not easy to formulate fiscal policies to stimulate demand, so we can only start from the supply side. I believe they will succeed!"

The supply school was not well-known in these years. In other words, it will be a non-mainstream school of economics until the future. But for Carter, who has studied macroeconomics, especially political economics, the Laffer Curve is

, I’ve always heard of it.

At first, Carter was not able to connect the information in his memory with the reality that was happening at the moment. Then, he would be panicked, but when Carter discovered that Arthur Laffer is now Reagan's adviser, this

My mind will be stable.

Others do not believe that the supply school can revitalize the current American economy, but Carter believes it! So, naturally.

"So, I left you alone just to tell you. Don't be afraid, feel free to increase your position boldly! With Douglas developing steadily and making progress, even if the investment suffers a loss, I, Black Flag Commercial Bank, can handle it!"

Behind you, you have the entire Coffey County and the wealth of Atkinson County supporting you, this is your backing!"

"Are you really not afraid of losing money? You know, if there is a problem, especially in terms of liquidity, there will probably be a run on Goodman."

"It's okay, there are reserves over there to support it! Just go ahead and do it boldly. The high unemployment rate is a good thing for Douglas. Because it means there will be a large influx of people, and population is the foundation for a city's development!

And Douglas is the foundation of our bank!"
Chapter completed!