Politics and Inflation

[kyzr]

Got any links to prove that the wealthy do not spend less after a tax increase?
Thanks for playing...you lose!

ECON 151: Macroeconomics

The Tax Multiplier​

As mentioned before, the spending multipliers are all the same, 1/(1-MPC). There is also a multiplier that is associated with a change in taxes. It is called the tax multiplier, and it is NOT the same as the spending multipliers. In fact, it is smaller than the spending multipliers. Why would the tax multiplier be smaller than the government spending multiplier? The answer lies in the fact that when a business or the government undertakes new spending, they inject the initial amount of that spending into the income stream and then it multiples through the economy. When the government decides to lower taxes, they are not injecting new money into the economy; they are simply deciding not to take money out of the economy that was already in the income stream. Individuals will then spend some portion of the money that they get to keep. So, if the government increases spending by $1 billion, the entire $1 billion is injected into the income stream. If they reduce taxes by $1 billion, only the MPC x $1 billion is injected into the income stream. Therefore, the impact of the tax multiplier is:

 

[AntonToo]

This is all based on lack of labor.

Chinese and Taiwaneese workers are getting too much American stimulus money you think?

 

[DBA]

The wealthy people of the world do not earn their money. They are expert thieves and trust fund babies.

Wealthy as defined by Democrats is 400k+ per year. That is not a trust fund baby or necessarily a thief. Are multi-millionaire professional athletes trust fund babies and thieves? Seems as though envy controls your thoughts.

The $5.5T in infrastructure spending isn't going for federal assistance programs (so cut the BULLSHIT), its going to fund infrastructure projects. It will create hundreds of thousands of jobs and increase the total value of the American economy far more than it costs.

The agreed to infrastructure bill is about 1.1 trillion The other 3.5 trillion nonsense is full of giveaways. Do some research.

 

[Richard-H]

LOL, of course, you don't know the answer. Every time I pose this question to an aging hippie leftist douche you never can answer it. You just see the words "general welfare" and deceptively pretend it means you get a blank check to fund which ever pet program or project you people want, even though you know you're lying about the intention of that clause.

Why don't you explain what you think the founding fathers meant by the General Welfare clause?

Did the words 'General' and/or 'Welfare' have distinctly different meanings back in 1784?

 

[Slade3200]

I have been talking about inflation being here to stay since Biden continued his giveaways, including the child tax credit(another freebee). Supply chain disruptions are a direct results of the labor shortage. Labor shortages in the US are continuing because of the Biden Administration.

How did you feel about Trumps tax cuts?

 

[DBA]

Chinese and Taiwaneese workers are getting too much American stimulus money you think?

Right, my local grocery store can't get enough fresh chicken because it is coming from China. Uh huh. Somebody has to work at the chicken processing plants. Somebody has to drive the trucks. These aren't Chinese, these are Americans. People haven't decided to eat 3 times more chicken post lockdown. The supply is low.

 

[AntonToo]

LOL, of course, you don't know the answer. Every time I pose this question to an aging hippie leftist douche you never can answer it. You just see the words "general welfare" and deceptively pretend it means you get a blank check to fund which ever pet program or project you people want, even though you know you're lying about the intention of that clause.

Supreme Court, which is the final say on these Constitutional matters has long defined the clause to mean that Feds can spend on whatever the fuck they want to in the name of general benefit to the country.

So yes, "General Welfare" covers safety net spending AND MUCH MORE.

 

[DBA]

How did you feel about Trumps tax cuts?

Allowing virtually everyone to keep more of the money they earn is quite different than giving out more money for unemployment, providing stimulus checks and giving a child "tax" credit to those that don't pay taxes to begin with. In order to benefit from a tax cut, you must be working and paying taxes, thus providing more incentive to work. If you quit, there is no benefit. Quite different.

 

[maybelooking]

The wealthy people of the world do not earn their money. They are expert thieves and trust fund babies.

The $5.5T in infrastructure spending isn't going for federal assistance programs (so cut the BULLSHIT), its going to fund infrastructure projects. It will create hundreds of thousands of jobs and increase the total value of the American economy far more than it costs.

what a complete crock of absolute SHIT.

 

[DBA]

...oooohhh so when Trump was signing trillions and trillions in giveaways you kept your mouth shut, but as soon as Biden passed some giveaways you started sounding the alarm.

Strong partisan bias noted.

What giveaways? You mean allowing people to keep more of what they earn? That isn't a giveaway.

 

[Slade3200]

Allowing virtually everyone to keep more of the money they earn is quite different than giving out more money for unemployment, providing stimulus checks and giving a child "tax" credit to those that don't pay taxes to begin with. In order to benefit from a tax cut, you must be working and paying taxes, thus providing more incentive to work. If you quit, there is no benefit. Quite different.

I’m well aware of the differences I was just asking how you felt about the cuts… sounds like you support them, is that right?

 

[bendog]

The cause for recent inflation is the inability of the Covid-19 disrupted supply chains and laborforce from meeting the market demand.

You say you talked about that for a long time and I say you are full of shit.

I agree, but the point of the social spending the progressives want is to literally "put more money in the pocket of 'some' people. To do that they have to either create the money or take it from somebody, and they the have to define who the "some" are. So I agree with you the the inflation we see today is because of covid and supply chains. But we have not yet seen what the effects would be if the progressives get their way.

 

[DBA]

I’m well aware of the differences I was just asking how you felt about the cuts… sounds like you support them, is that right?

Yes, in general I am in favor of allowing people to keep more of the money they earn. This needs to be coupled with decreased government spending and efficiency, something neither party is very adept at doing.

 

[Harpy Eagle]

I think it is bit over the top to blame all of the inflation on Biden.

The disruptions in the supply chain due to COVID is certainly adding to prices for just about everything.

60 plus ships waiting to be off loaded off of Cali, 45 or so off SC are also adding to the problem.

 

[Harpy Eagle]

decreased government spending and efficiency, something neither party is very adept at doing.

wow, congrats on the understatement of the century!

 

[wamose]

Do Democrats still remain in the dark regarding the actual cause of inflation and that it here to stay as long as the giveaway from Democrats continue? I have been talking about inflation being a long term issue for quite some time while the Democratic "experts" were behind the curve, as usual. The Fed is still behind the curve here. Inflation is here to stay as long as the Democrats are running the show. Mac, don't say I didn't tell you so.

Inflation hits 30-year high in key gauge watched by Fed

Inflation makes people cut back on consumption. That results in companies having to cut production which results in people getting laid off, which results in less tax receipts and a higher demand for government subsidies, which results in deficit spending and skyrocketing deficits, which results in higher taxes, which results in even lower consumption at which point we cycle back to the beginning of this post and do it all again. It's like a manufactured death spiral, authored by Biden and the Democrat party..

 

[AntonToo]

Right, my local grocery store can't get enough fresh chicken because it is coming from China. Uh huh. Somebody has to work at the chicken processing plants. Somebody has to drive the trucks. These are Chinese, these are Americans. People haven't decided to eat 3 times more chicken post lockdown. The supply is low.

Behold the chickens - implicitly the WHOLE American economy, according to DBA.

now lets discuss reality:

There is an inflation measure that specifically excludes energy and food prices called CORE CPI:

As you can see, 1. CHICKENS are not really a big part of our problem 2. CPI spike seems to have peaked. 3. Note temporary inflation fluctuations around Great Recession that did not translate into long term pattern.

 

[BULLDOG]

Those FED projections probably don't have the effects that passing the dem's $5.5T "infrastructure" Bills would have on the dollar and core inflation. That much new money would impact the supply and demand for everything.
Maybe we need to pay people more to sit on their porches?

Sitting on my porch swing with a cold beer is one of my greatest joys. I would do it even without being paid.

 

[BlueGin]

Demand is higher because the government was giving out stimulus checks and now child tax credits. Don't be dumb. Those of us not receiving these benefits have not gone hog wild trying to buy stuff post-lockdown.

You and many others have no basic common sense. Make a note of this thread. We can revisit it as inflation continues. You can look to your "experts" for more excuses as to why this is the case.

I’ve been working through the whole pandemic. And like I had stated early on right after the election. I stocked up on stuff for Christmas and birthdays at that time. Anything other than that…I have been getting from the thrift stores . Or picking up as needed like pillows and towels. Definitely no large amounts of extra purchases.

I do personal shopping for a few elderly folks also… nine times out of ten I cant find several items on their lists while out purchasing things for them.

 

[Slade3200]

Yes, in general I am in favor of allowing people to keep more of the money they earn. This needs to be coupled with decreased government spending and efficiency, something neither party is very adept at doing.

Im not talking about in general, I'm asking about Trumps tax cuts and the economic effects that it had. We are talking about inflation here right? Did you see the cuts as a positive or negative contributor to inflation and our economic situation?