Leading up to the passage of the Tax Cut and Jobs Act of 2017 (TCJA) Daniel Alpert, Managing Partner of Westwood Capital, LLC, authored the linked article: The last time Congress pulled off a major tax code overhaul, it triggered a financial disaster.
Alpert’s article relates to the $10k cap on the deductibility of state and local taxes and his warning:” be prepared to clean up the mess” was enough to give critical thinkers pause; but not the majority in Congress. Now with COVID-19, Daniel Alpert’s article deserves a reread!During the Saving and Loan Crisis - 1986 through 1995, it was necessary for the Federal Reserve to drop the Fed Funds rate from 15% to 3%; but the Fed had a lot of room to execute monetary policy. In spite of this drop, one-third of all U.S. Savings and Loans failed. With COVID-19 upon us, the Fed Funds rate is at or close to Zero, already.