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It's not a dilution of value when the risk is deflation; and at zero-inflation, it's not a tax because it encourages growth by investment. So it's only a "tax"
by mjburgess 4y ago
It's not a dilution of value when the risk is deflation; and at zero-inflation, it's not a tax because it encourages growth by investment.
So it's only a "tax" if it (1) causes inflation to rise; and (2) rise above the level which promotes growth.
Neither of those conditions obviously obtains in the era of QE. Indeed, (1) never did.
- nwienert 4y agoYou’ve made up three things, each without convincing rhetoric let alone evidence, and then put QED at the end.
- mjburgess 4y agoI presume I'm speaking to a person who understands the evidence for each, and that the argument is about how one frames QE. There are videos, no doubt, if you want to understand why a positive rate of inflation promotes growth, and hence why central banks are legally obligated to "print money" to ensure a 2% target. The relevant disagreement here, I think, isn't the basic economics. Its under what conditions the "'deliberate' inflation = tax" view is correct. Since it is correct under some conditions. I'd dispute that it accurately describes the last decade of central bank policy, which on the whole, seems fairly successful at avoiding a post-crash depresson, and a post-pand. depression.... Both seem highly implausible feats done via taxation.