How about balanced budget contracts?

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Some think the US could have a balanced budget by 2008. If tax rates and economic growth rates remain unchanged, I would buy the 2008 contract in size.

If the Democrats roll back the capital gains and dividend tax cuts, then I would sell a little 2008.

Cross-posted from CaveatBettor.

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4 thoughts on “How about balanced budget contracts?

  1. Jason Ruspini said:

    I’d rather have tax futures. More to the point in terms of hedging (also compared to presidential contracts for the most part).

  2. Chris Masse said:

    Both contracts are interested —tax futures AND balanced budget.

  3. Caveat Bettor said:

    Jason: I love tax futures, but that is not an idea which I independently thought up myself. In fact, I probably read about it on your blog a long time ago.

    The tax code and how my accountant comes up with what I owe is too opaque, year-to-year, for me to play these in size.

  4. Jason Ruspini said:

    Cav, Whatever variance there is in the effective tax rates that an accountant can produce, the highest marginal rate should explain a lot of it.

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