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| Inflation and government spending | |
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| Tweet Topic Started: Jul 1 2009, 04:36 PM (158 Views) | |
| HoosierLars | Jul 1 2009, 04:36 PM Post #1 |
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http://hubpages.com/hub/What-is-Inflatio... "Inflation is similar to taxes in that it gives government the money needed to spend as it wants and with this power it is able to both buy what it wants as well as influence the direction of the economy. Like taxes in which the government takes money from its citizens to spend itself, inflating the money supply by printing more money has the same effect in that it enables the government to take purchasing power from the citizens and spend it as it wishes." "As citizens and foreigners began to lose faith in the currency they would begin converting their paper money to gold thereby reducing the government's gold holdings and people's faith in the currency." |
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| IUCOLTFAN | Jul 1 2009, 09:38 PM Post #2 |
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Coach
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I cant wait......... |
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| Mr Gray | Jul 1 2009, 10:21 PM Post #3 |
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Coach
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are you starting to believe? |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| HoosierLars | Jul 1 2009, 10:59 PM Post #4 |
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I've always said the real problem is excessive government spending, and I thought this article makes a good point equating taxing with inflation. They both have a similar effect on the consumer--less real money to spend, while the government gets the money it "needs". I still believe the Federal Reserve is necessary to avoid the bank runs and financial panics that gripped the emerging 1st world in the 1800's. If the Fed didn't exist, politicians intent on spending more money than they have whould always find a way, and the anti-Fed crowd is fooling themselves when they think government spending can be curtailed by eliminating the Fed. |
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| Mr Gray | Jul 1 2009, 11:10 PM Post #5 |
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Coach
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do a quick search and look at the dozens and dozens of times I have said on this board that inflation is the largest hidden tax that all Americans pay! Apparently you had to see it in an article to make it credible.... :D |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| HoosierLars | Jul 1 2009, 11:56 PM Post #6 |
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Inflation is definitely like a tax. But then again, it couldn't be because B.O. promised no new taxes. I guess you and I both must make over 250k. |
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| brumdog44 | Jul 2 2009, 01:35 AM Post #7 |
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The guy picked last in gym class
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Ummm....inflation rate has been negative for March through May and is negative for 2009 to date. http://www.inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp http://forecasts.org/inflation.htm http://www.usinflationcalculator.com/inflation/current-inflation-rates/ I'm not sure why you continue to ramble on and on about inflation when it simply isn't happening right now. |
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| Mr Gray | Jul 2 2009, 08:51 AM Post #8 |
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to say it isn't happening "right now" is true from an extreme micro sense, but inflation is happening overall and has been near constant during our lifetimes. The spending habits of all forms of government right now will guarantee another bout of extreme inflation, which will impact everyone, especially the poor & middle class. Lars, the Obama administration passed tobacco legislation as soon as he got into office which placed a huge tax on most tobacco products which raised the cost by as high as 7-fold. I guess only 250K + citizens smoke. |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| HoosierLars | Jul 2 2009, 09:41 AM Post #9 |
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Yes, inflation is currently very low because demand is very low due to the economic crisis. My statement was a general one. When the government overspends it has three choices: 1) Raise more revenue through taxes 2) Borrow money by selling US treasuries 3) "Monitize" the debt, i.e. print money and devalue the current dollars in circulation, which is inflationary. It's ironic that the China and Japan are the ones holding our feet to the fire on this since they hold a bunch of our treasuries, and don't want to see them devalued. It really is that simple. Short term, I fully support the Fed's ability to expand/contract the money supply by adjusting interest rates. This is a great mechanism, and gives us flexibility when dealing with the natural ups and downs of the business cycle, as well as getting through extreme problems like we're in now. I know Phil, OldSchool, and others will argue the Fed's actions cause the cycles, but I think they are full of shit, in general. I've agreed that poor Federal Reserve policies, e.g. keeping interest rates too low, can cause problems. |
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| thePhilosopher | Jul 2 2009, 09:47 AM Post #10 |
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All-Star
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The question you need to ask, Lars, is who enables inflation? Who allows gov'ts to spend like they do? Hint: It starts with "c" and ends with "entral banks." Without the private Federal Reserve, our federal gov't would have had to make some tough decisions a long time ago. And that "nice" mechanism of artificially lowering interest rates has enabled gov'ts to spend whatever they'd like. You like to complain about BHO's spending, but you don't realize HOW he can do it all. He could just monetize universal healthcare if he would like, but I think the plan is to take tax breaks away from the rich. P.S.- I am moving today and I will be MIA until Tuesday or so. Just in case Lars has a snappy comeback, I'm not intentionally avoiding him or anyone else. :p |
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| HoosierLars | Jul 2 2009, 10:02 AM Post #11 |
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Phil, I agree with you. headbang2 Like I said on another thread, though, the government would find a way to overspend if the sheeple continue to elect people who promise to give them free stuff. If you and I were running the Fed, it would only be used in extreme circumstances to deal with bank runs and panics. 1) Something bad happens 2) People panic and want their money from the bank 3) The bank doesn't have enough money because most of it is loaned out, and there would be a systemic collapse if nothing is done. The Fed steps in to print money and pay the first people. Everyone else sees they could get their money, and the panic is calmed. ps I think the Ron Paul posters are great, and show much more knowledge and understanding of the world than the ObamaNation. |
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| brumdog44 | Jul 2 2009, 12:19 PM Post #12 |
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"Inflation is definitely like a tax. But then again, it couldn't be because B.O. promised no new taxes." How is that a generalized statement? On an individual consumer basis, inflation acts like a tax so long as your income does not increase at a rate equal to it. Take a look at the country who will one day own us in China: inflationary rates there are in constant flux, but overall you will see an average inflationary rate that pretty much matches what we have here. http://indexmundi.com/china/inflation_rate_(consumer_prices).html Something that cost $1 in 1980 in China now costs $4.80. By comparison, in the US something that cost $1 in 1980 would cost $2.95 now. |
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| HoosierLars | Jul 2 2009, 12:28 PM Post #13 |
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China will never own us, unless B.O., Bill Ayers and Co continue to run this country into the ground. I'm not ready to give up the fight yet. |
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| brumdog44 | Jul 2 2009, 09:10 PM Post #14 |
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China owned us long before Obama and will continue to do so long after he's gone. Not surprised that someone who thinks Fox is fair and balanced is still stuck on Bill Ayers, though. |
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| HoosierLars | Jul 2 2009, 11:21 PM Post #15 |
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B.O.'s actions have shown that his association with Chicago radicals was no accident. He's a leftist radical, and must be stopped. |
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