<Interesting Economics The Oil Drum DrumBeat: July 3, 2006>
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158 comments on DrumBeat: July 2, 2006

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odograph on July 2, 2006 - 8:59pm Permalink | Subthread | Parent | Comments top
I was picking up on item "2" above:

Higher Taxes translate into more wasteful spending (more taxes mean more money for Washingtion Buracrats) This leads to higher inflation and further erosion of the US savings rate. (Why save when inflation will steal your savings). This exacerbates retirment issues since more americans give up saving for retirement, and become more dependant on SS and other gov't entitlement programs. Those that are already retired and live on fixed income suffer more because the are unable to keep up with rising costs!

That assumes a couple things.  First it assumes that the earlier poster was recommending higher taxes, and not a revenue-neutral shift in their source.  Second, it states the connection I was referring to:  "Higher Taxes translate into more wasteful spending"

I think our governemtn leads to wasteful spending, and they have proven that they don't need higher taxes to do it!!!

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TechGuy on July 3, 2006 - 6:22pm Permalink | Subthread | Parent | Comments top
>I think our governemtn leads to wasteful spending, and they have proven that they don't need higher taxes to do it!!!

Higher taxes prove additional capital for increase wasteful spending. Wasteful spending also creates inflation as the gov't overpays for goods and services (aka the $500 hammer).

>That assumes a couple things.  First it assumes that the earlier poster was recommending higher taxes, and not a revenue-neutral shift in their source.

Taxing energy will lead to inflation even if taxes for other items are reduced. Plus it still does not address consumption outside of the US. The only way that the US can curb global consumption is through interest rates.

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odograph on July 3, 2006 - 6:30pm Permalink | Subthread | Parent | Comments top
Higher taxes prove additional capital for increase wasteful spending. Wasteful spending also creates inflation as the gov't overpays for goods and services (aka the $500 hammer).

You are ignoring a couple of us, who are asking you: why we keep spending ourselves further into debt even as we cut taxes.  It's an interesting question.  Indeed, I might not have become the "lapsed Republican" that I am if the taxation and spending connection had worked the way you are describing.

I'm sorry, but I think too many of my Republican brethren got lazy and or greedy.  They got to where all they care about is cutting taxes, and they don't give a darn about what spending does or does not follow.

Taxing energy will lead to inflation even if taxes for other items are reduced. Plus it still does not address consumption outside of the US. The only way that the US can curb global consumption is through interest rates.

Pronouncements like that are always fun.

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158 comments on DrumBeat: July 2, 2006

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