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Idiotic. Currently elected politicians are literally doing the opposite of the FED and making inflation worse all in the name of trying to stay elected. Burn th

Idiotic. Currently elected politicians are literally doing the opposite of the FED and making inflation worse all in the name of trying to stay elected. Burn the economy, peoples savings, and retirements at all costs to stay in office. I hope people enjoy their stimulus checks while their pensions, savings, retirements and jobs go up in smoke.

joshstrange 4y ago
How is a (effectively) tax rebate going to cause inflation? Nothing was created out of thin air, they took in more money than they needed in taxes and so they are returning that to the population.
- deleted 4y ago
  [deleted]
- anon291 4y ago
  Because they're taking income from the rich and giving it to the poor. Poor people are more likely to spend. If instead they took the money and gave it to rich tax payers (which I imagine would be deeply unpopular), then this would likely reduce inflation as rich people typically would save it, and thus remove it from the consumer spending category.
  - sillystuff 4y ago
    I doubt it will have a measurable, let alone significant effect on inflation. The maximum a single person can receive is $350.
- ch4s3 4y ago
  In effect it increases the amount of money circulating in the economy, particularly in the parts of the economy where inflation is high e.g. groceries, rents, etc. Basically CA is taking money (via taxes) that would likely sit in some form of savings or equities and transferring it to people who will spend it. As a value neutral take, it simply moves cash into the economy and increases the velocity of money. If the production of goods and services can't keep up, there will be more inflation.
- ianferrel 4y ago
  Tax rebates cause inflation because they result in more money available to chase an unchanged quantity of goods and services, which causes prices to rise. Similarly, tax increases reduce inflation because after paying taxes, people have less money to buy things that are not taxes. Critically: inflation measures the cost of goods and services, and taxes are not a good or service.
jollyllama 4y ago
It's a pretty shrewd move.
- nodesocket 4y ago
  Only if you on the lower income scale and don’t have any real assets, real estate, savings, stocks, or retirement. Politicians must think their constitutes are financially illiterate. Actually for their base, they probably are.
- Kon-Peki 4y ago
  I'm not sure if it is "shrewd" or not. But! It is definitely better than all the states that used their Covid windfalls for permanent tax cuts. If we end up with a bad recession, one-time checks are going to hurt an awful lot less than lower recurring tax revenue.
  - jollyllama 4y ago
    The job of the politician isn't to make things better, it's to get re-elected. In this respect their actions are quite shrewd. Making things worse may help them!
  - nodesocket 4y ago
    Tax cuts are better than giving hand outs to people that go out and buy worthless goods and services. At least tax cuts gives money back to people who are actually productive and pay into the system.
    - toomuchtodo 4y ago
      How incredibly out of touch one must be to think that the people getting these checks won’t use from for food, fuel, and rent. The lower classes live in a constant recession, and will put these funds to better use than the marginal dollars of someone very well off: survival.
      - anon291 4y ago

joshstrange 4y ago

How is a (effectively) tax rebate going to cause inflation? Nothing was created out of thin air, they took in more money than they needed in taxes and so they are returning that to the population.

deleted 4y ago
[deleted]
anon291 4y ago
Because they're taking income from the rich and giving it to the poor. Poor people are more likely to spend. If instead they took the money and gave it to rich tax payers (which I imagine would be deeply unpopular), then this would likely reduce inflation as rich people typically would save it, and thus remove it from the consumer spending category.
- sillystuff 4y ago
  I doubt it will have a measurable, let alone significant effect on inflation. The maximum a single person can receive is $350.
ch4s3 4y ago
In effect it increases the amount of money circulating in the economy, particularly in the parts of the economy where inflation is high e.g. groceries, rents, etc. Basically CA is taking money (via taxes) that would likely sit in some form of savings or equities and transferring it to people who will spend it. As a value neutral take, it simply moves cash into the economy and increases the velocity of money. If the production of goods and services can't keep up, there will be more inflation.
ianferrel 4y ago
Tax rebates cause inflation because they result in more money available to chase an unchanged quantity of goods and services, which causes prices to rise. Similarly, tax increases reduce inflation because after paying taxes, people have less money to buy things that are not taxes. Critically: inflation measures the cost of goods and services, and taxes are not a good or service.

jollyllama 4y ago

It's a pretty shrewd move.

nodesocket 4y ago
Only if you on the lower income scale and don’t have any real assets, real estate, savings, stocks, or retirement. Politicians must think their constitutes are financially illiterate. Actually for their base, they probably are.
Kon-Peki 4y ago
I'm not sure if it is "shrewd" or not. But! It is definitely better than all the states that used their Covid windfalls for permanent tax cuts. If we end up with a bad recession, one-time checks are going to hurt an awful lot less than lower recurring tax revenue.
- jollyllama 4y ago
  The job of the politician isn't to make things better, it's to get re-elected. In this respect their actions are quite shrewd. Making things worse may help them!
- nodesocket 4y ago
  Tax cuts are better than giving hand outs to people that go out and buy worthless goods and services. At least tax cuts gives money back to people who are actually productive and pay into the system.
  - toomuchtodo 4y ago
    How incredibly out of touch one must be to think that the people getting these checks won’t use from for food, fuel, and rent. The lower classes live in a constant recession, and will put these funds to better use than the marginal dollars of someone very well off: survival.
    - anon291 4y ago