Shovel more dirt onto Build Back Better

[Counselor706]

West Virginia Sen. Joe Manchin first killed President Joe Biden’s Build Back Better agenda in December. As he explained it, he could not support legislation that contributed to “inflation taxes that are real and harmful to every hard-working American.”

Manchin killed Build Back Better again in January when he told reporters that Washington first needs to "get [its] financial house in order, get this inflation down” before any Build Back Better agenda items can be considered.

And now, a new study out of Tennessee has killed Build Back Better a third time by completely dismantling one of Biden’s key claims about the benefits of government spending on preschool education.

Specifically, by sixth grade, those children randomly selected for the government-funded preschool program were more likely to be referred to special education services and more likely to have discipline problems. They also performed worse on academic tests than students who never attended a state-funded preschool.

Source

 

[pecksniff]

"Inflation taxes"?

 

[Bud_Spencer]

"Inflation taxes"?

It's a real thing.

 

[pecksniff]

It's a real thing.

I remember in the 1970s there were complaints about "bracket creep" -- inflation increased incomes as measured in dollars, which put the taxpayers in higher income tax brackets even though their actual purchasing power had not increased -- is that what this is about?

 

[Rightguide]

I remember in the 1970s there were complaints about "bracket creep" -- inflation increased incomes as measured in dollars, which put the taxpayers in higher income tax brackets even though their actual purchasing power had not increased -- is that what this is about?

Inflation is a hidden tax. You pay more for less.

 

[Bud_Spencer]

I remember in the 1970s there were complaints about "bracket creep" -- inflation increased incomes as measured in dollars, which put the taxpayers in higher income tax brackets even though their actual purchasing power had not increased -- is that what this is about?

Partially. It's also because your dollar goes less far. Bracket crep is another way.

 

[pecksniff]

Inflation is a hidden tax. You pay more for less.

It's not a "tax" unless government collects the difference. Also, inflation (eventually) raises incomes as well as prices.

 

[Rightguide]

It's not a "tax" unless government collects the difference. Also, inflation (eventually) raises incomes as well as prices.

Here's what happens and how government benefits:

1. They get to spend the money first, delivering services without raising taxes.

2. Debts are wiped out and the U.S. Government is the biggest debtor.

3. GDP appears to increase.

4. Tax revenues increase.

5. There is no one to stop them.

 

[pecksniff]

Here's what happens and how government benefits:

1. They get to spend the money first, delivering services without raising taxes.

2. Debts are wiped out and the U.S. Government is the biggest debtor.

3. GDP appears to increase.

4. Tax revenues increase.

5. There is no one to stop them.

So described, it sounds like the soundest and most beneficial public policy conceivable.

Anyway, I don't see how it wipes out government debt. Government debt = Treasury bonds, and they are not wiped out.

And the increase in GDP is not mere appearance -- inflation happens because real GDP increases.

And when you say "government benefits," you're talking like the USG were a for-profit corporation. It ain't -- nobody goes into politics or civil service for the money, and nobody gets rich off tax dollars but big corporations with fat government contracts. The only way politicians get rich is after they leave office and take private-sector jobs, and only the very most prominent of them get to do that.

As an organization, a government is not an interest in the way that a corporation is an interest. You can conceive of a society as interests in competition, but government is not one of them, it is above that contest.

 

[phrodeau]

For decades the United States of America has been a world leader. Republicans are the first to hype that fact, but the last to pay for what it costs.

 

[LittleDixie]

I like to look at currency printing like collectibles. The rarity of a comic book or a stamp or whatever is part of what makes it valuable. Imagine what would happen to the price of a one of a kind stamp if someone found a hoard of tens of thousands of them in mint condition. The price would fall through the floor, because the rarity would evaporate.

In the case of currency printing, the government creates new money out of thin air and spends it at today's value. But the amount of value everyone else has slips as the rarity of the dollar diminishes. By the time everyone else sees what is going on, the value of the dollars they have in their bank accounts has fallen, and they all lose purchasing power.

The "tax" is that this loss of purchasing power. It is effectively taken from the citizen when the government creates new money and spends it.

 

[pecksniff]

I like to look at currency printing like collectibles. The rarity of a comic book or a stamp or whatever is part of what makes it valuable. Imagine what would happen to the price of a one of a kind stamp if someone found a hoard of tens of thousands of them in mint condition. The price would fall through the floor, because the rarity would evaporate.

In the case of currency printing, the government creates new money out of thin air and spends it at today's value. But the amount of value everyone else has slips as the rarity of the dollar diminishes. By the time everyone else sees what is going on, the value of the dollars they have in their bank accounts has fallen, and they all lose purchasing power.

The "tax" is that this loss of purchasing power. It is effectively taken from the citizen when the government creates new money and spends it.

In other words, the unit value of currency is inversely proportional to the money supply.

We knew that.

We also knew that inflation is usually a sign of a growing economy. The Depression was marked by deflation.