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#2
08-17-2007, 10:30 AM
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Re: How much is the annual inflation tax?
First off, it isn't necessary to start a poll to ask what the inflation rate is, government and private estimates are all over the web.
Second, tax on what? Income? Capital Gains? Wealth? Third, the idea that government causes inflation to raise revenue is silly. Sure, the debt is reduced over time by inflation, but expenses increase as well. Social Security, Medicare, and government salaries all get a cost of living bump every year. Inflation is also reflected in the interest rate they have to pay to service the debt. 
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#4
08-17-2007, 10:55 AM
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Re: How much is the annual inflation tax?
[ QUOTE ]
First off, it isn't necessary to start a poll to ask what the inflation rate is, government and private estimates are all over the web. Second, tax on what? Income? Capital Gains? Wealth? Third, the idea that government causes inflation to raise revenue is silly. Sure, the debt is reduced over time by inflation, but expenses increase as well. Social Security, Medicare, and government salaries all get a cost of living bump every year. Inflation is also reflected in the interest rate they have to pay to service the debt. [/ QUOTE ] Because technological innovations lower the costs of products over time inflation can be significantly higher than the built in inflation bumps that SS and other programs get.
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#5
08-17-2007, 06:36 PM
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Re: How much is the annual inflation tax?
[ QUOTE ]
First off, it isn't necessary to start a poll to ask what the inflation rate is, government and private estimates are all over the web. Second, tax on what? Income? Capital Gains? Wealth? Third, the idea that government causes inflation to raise revenue is silly. Sure, the debt is reduced over time by inflation, but expenses increase as well. Social Security, Medicare, and government salaries all get a cost of living bump every year. Inflation is also reflected in the interest rate they have to pay to service the debt. [/ QUOTE ] He's talking about the tax on devaluing purchasing power by money supply injections - seignorage. This is collected by governments printing money, or having the central bank issue new money, and the newly created money is then used to purchase goods and services. This does often happen through an indirect process however. Basically, starts off with treasury authorizing government borrowing to cover the a given deficit. This is followed by the issuing and selling of government bonds back to the central bank who pays for them by issuing new currency. The money only reaches the public through government spending over time. We dont know the precise inflation tax mostly because we dont have enough information on the money supply. If we have full, trusted and independent information on the money supply always inflation would be purposeless. Prices would adjust very quickly rendering the process pointless. The inflation tax is also paid in stages by the public and only after the effect of manipulation. Most of the costs of current inflation will only be fully paid over next couple decades or so. The debt has been kept under control due to support from debt holders like China but their incentives are changing and the US cant control how much money others purchase or hold directly. This means the purchasing power decrease and seignorage tax are in the years to come. Real seignorage revenue calculations are easy if you full and trusted money supply data but this only gives you a still picture setting and tells you nothing about the expected seignorage. It should be noted too that its basically textbook material that the fed strategically creates inflation to distort the value of debt. Dont forget that they all have high-time preference. Few central banks actually aim for zero inflation for a reason. Governments/politicians have a gazillion incentives to use seignorage and almost all of them do so in a abusive ways. The fed and government can sometimes play chicken with each other but the fed almost always will lose that game. Bernanke talks about this in his textbook and ive quoted this speech before when MrMon claimed that the fed distorting the debt was a conspiracy: http://forumserver.twoplustwo.com/showth...ue#Post11519918
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#6
08-18-2007, 01:12 AM
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Re: How much is the annual inflation tax?
[ QUOTE ]
[ QUOTE ] First off, it isn't necessary to start a poll to ask what the inflation rate is, government and private estimates are all over the web. Second, tax on what? Income? Capital Gains? Wealth? Third, the idea that government causes inflation to raise revenue is silly. Sure, the debt is reduced over time by inflation, but expenses increase as well. Social Security, Medicare, and government salaries all get a cost of living bump every year. Inflation is also reflected in the interest rate they have to pay to service the debt. [/ QUOTE ] He's talking about the tax on devaluing purchasing power by money supply injections - seignorage. This is collected by governments printing money, or having the central bank issue new money, and the newly created money is then used to purchase goods and services. [/ QUOTE ] Yeah, that's what i was talking about.
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#7
08-18-2007, 02:08 PM
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Re: How much is the annual inflation tax?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] First off, it isn't necessary to start a poll to ask what the inflation rate is, government and private estimates are all over the web. Second, tax on what? Income? Capital Gains? Wealth? Third, the idea that government causes inflation to raise revenue is silly. Sure, the debt is reduced over time by inflation, but expenses increase as well. Social Security, Medicare, and government salaries all get a cost of living bump every year. Inflation is also reflected in the interest rate they have to pay to service the debt. [/ QUOTE ] He's talking about the tax on devaluing purchasing power by money supply injections - seignorage. This is collected by governments printing money, or having the central bank issue new money, and the newly created money is then used to purchase goods and services. [/ QUOTE ] Yeah, that's what i was talking about. [/ QUOTE ] And what I posted will give what you want to know.
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#8
08-18-2007, 11:32 AM
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Re: How much is the annual inflation tax?
[ QUOTE ]
First off, it isn't necessary to start a poll to ask what the inflation rate is, government and private estimates are all over the web. Second, tax on what? Income? Capital Gains? Wealth? Third, the idea that government causes inflation to raise revenue is silly. [/ QUOTE ] Um, iron. Counterfeiters never think it is silly to inflate the money supply to raise revenue. Do you see why?
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#10
08-17-2007, 10:53 AM
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Re: How much is the annual inflation tax?
10-15%, soon to be 20% by next yr.
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