4% sounds optimistic, but its good to have a canvas to paint on.
Potential bad effects from the top of my noggin:
* You've compressed the compounding growth in prices (inflation) by two years in one stroke.
* You've instantly decreased the buying power of a lot of people; worst affected are those not affected by the bump (recipients of disability, recipients of social security)
* Fun addenda: You've set the precedent for a 100% bump from the current federal rate, and its more likely to happen again, once more compressing the inflation timeline and further pressuring people that don't work a waged job.
Oh, and the reason putting pressure on inflation like this is bad is that it discourages investment, which leads to weakened economies.
Potential bad effects from the top of my noggin:
* You've compressed the compounding growth in prices (inflation) by two years in one stroke.
* You've instantly decreased the buying power of a lot of people; worst affected are those not affected by the bump (recipients of disability, recipients of social security)
* Fun addenda: You've set the precedent for a 100% bump from the current federal rate, and its more likely to happen again, once more compressing the inflation timeline and further pressuring people that don't work a waged job.
Oh, and the reason putting pressure on inflation like this is bad is that it discourages investment, which leads to weakened economies.