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You can control inflation with taxes, and it's a more fiscally responsible way to do it. As for "irresponsibly low" and "(which is pernicious)"... these are yo
by dmn322 4y ago
You can control inflation with taxes, and it's a more fiscally responsible way to do it.
As for "irresponsibly low" and "(which is pernicious)"... these are your value judgements that you've arrived at based on your perspective. That's fine, but other people have other perspectives. To someone with debt who wants a well-lubricated economy, or to someone who makes money off of exports, it's not irresponsible at all.
If you look at the history of fed rates vs unemployment and recessions, it's a very clear trend that the fed rate has to stay lower longer for a recovery, and it takes less raising of the rates to put us back in a recession. Why would this be? Maybe because it's not the appropriate tool to be using to control inflation. Maybe it's not because the fed is being irresponsible, but it's doing what it has to to keep the economy afloat and that's less and less effective because the country refuses to do what it has to, which is raise taxes on the rich.
- SamPatt 4y agoWhat field of economic thought leads you to claim that inflation can (and should) be controlled by taxing the rich? This is an unusual claim, to say the least.
- rsync 4y ago"What field of economic thought leads you to claim that inflation can (and should) be controlled by taxing the rich?" Not "the rich" per se, but he is speaking of MMT[1] which maintains that the government of a sovereign printer (sorry, Argentina) does not need taxes at all because they don't "need" the money. MMT purports that money is created by "printing" it into existence and money is destroyed by taxing it away. [1] https://en.wikipedia.org/wiki/Modern_Monetary_Theory https://en.wikipedia.org/wiki/Modern_Monetary_Theory
- dmn322 4y agoWhen the federal reserve loans money to banks, where does that money come from? When the federal government pays its debt to the federal reserve, where does that money go?
- rsync 4y ago"You can control inflation with taxes, and it's a more fiscally responsible way to do it." There is an interesting and compelling theory that you can control inflation with taxes (broadly, MMT[1]) but the cautious and (in my opinion) warranted skepticism that you voice, upthread, about prevailing economic theories should be extended to MMT as well. We don't really know if money supply creation via "printing" and the corresponding destruction via taxation will work just as MMT suggests it will. [1] https://en.wikipedia.org/wiki/Modern_Monetary_Theory https://en.wikipedia.org/wiki/Modern_Monetary_Theory