Ex-IRS whistleblower says middle class targeted under inflation bill

For starters, inflation is not based on spending. We spent like drunken sailors in the 1980s, 1990s, 2000s, and 2010s, and yet, inflation was relatively in check.

When inflation rose, it has always been something other than spending. The 1980 inflation was due to OPEC oil Embargo primarily, other years include supply chain disruptions or certain overheating of the economy where demand outweighed supply.

https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi

 

LOL, I merely followed the format of the post that I responded to. If I can do it without any discomfort, so can you if you are willing. But my bet is that you are not willing.

 

Since when was an annual earning of 400K considered middle class?

 

With those that are driven by greed, no amount of money will ever be enough. For those driven by power it's the same. They will only seek more ways to wield it.

 

Didn't even read the rest of your post as right out the gate you stated an emphatic lie. Increasing unfunded money supply into a market is one of the biggest and quickest drivers to inflation. Unless you disagree Nobel laureate Milton Friedman?

 

That's not accurate. The government (DARPA) came up with the kernel of the idea and built a small scale internet-like telecommunications system (Alohanet in Hawaii IIRC). However private industry (and some key private individuals) grabbed that kernel and built the internet almost entirely, although the government stuck its nose in from time to time.

 

yea, we wouldn't have the internet without that kernel.

We also wouldn't have personal computers if the government hadn't funded research for years and years.

The creation of those technologies was not profitable, so the private sector never would have created it on it's own.

 

You are correct I am not willing to try and weed through an unformatted three page block of text full of unnecessary cites garbage.

Try some formatting and breaking up your points with some brevity.

 

Whenever you want to blow smoke up someone's ass people need to strike a match, but it's not necessary to start a bonfire.

 

Sorry, but you have this all wrong. It is highly likely that the internet would have been invented without DARPA; it just would have taken (much?) longer. (And DARPA was helped considerably by private entities and individuals.) The government was not involved hardly at all in the development of either the computer or the personal computer. IBM for one was building computers before the government could even spell it (That's a bit exaggerated, but you get my point.). Like the government had zero to do with the start of automobiles, trucks, planes, refrigerators, radios, TVs, canals, oil, etc, etc, etc. They were however involved with the first American roads, though their's weren't as good as the early private roads.

 

Exactly, really not even worth debating with someone who doesn't even know the basic causes of inflation. Ole Milton must have been a Trumper, lol.

 

Someone needs to look at how Japan gotten through it's financial crisis years ago.

Hint: Government printing is the wrong answer.

 

Or even the most notorious example being the Weimar Republic....

 

It depends what type of "inflation" you are talking about. There can be inflationary pressure, which will be cancelled out by deflationary pressures.

There can be inflation without it being seen.

During the collapse of the housing bubble, the Fed intentionally expanded the money supply to try to compensate for the deflation in the economy (deflation in housing prices). As a result, there was not really any inflation visible. Though some argue the Fed should have allowed some deflation.

Printing more money DOES cause inflation, but not necessarily always the type of inflation that people will see.

Because leading up to the housing bubble, there was all sorts of "money" created in the economy that did not really exist, fueled by speculative housing prices and bank loans that would turn out not to be good. This is what "inflated" the economy. It would be kind of like if you handed out lots of counterfeit money in the economy which people would not realize was counterfeit until later.

If you print real money at the same time people discover all the counterfeit money, then it DOES cause inflation, but people will not see it.

You understand that? The word "inflation" can mean two different things. An effect, especially a long-term effect on the economy, or an observable effect, a change from before. Just like the difference between whether I take money out of your bank account, versus whether the visible total balance of your bank account goes up or down. It's not same thing.

 

I disaagree absolutely.

For starters, consumer spending increases can and do help cause inflation. We call this demand-pull inflation. Employers can increase salaries signifcantly to all people working, which will increase the cost of supply. We call that supply-push inflation. But government spending does not cause inflation because government spending is not something that is used entirely, mostly, or even signifcantly, on goods and services. Yes, it pays salaries, but the government does not produce anything, zilch, at least not in the United States.

We had huge deficits in the 1980s, but inflation went down from 14% in 1980 to about 4% in 1988, despite the fact that we, the government, literally doubled the federal deficit in the Reagan era. From 2001 to 2009, inflation was 2.7% when Bush took office and when he left in early 2009, the inflation rate was 3.4%. Again, Bush doubled the size of the deficit in that time frame. When Obama took over in 2009, the inflation rate was negative 4.9% because we were in a major recession due to the housing bubble and financial crisis. By the time Obama left office in early 2017, the inflation rate was 1.26% despite nearly doubling the federal deficit just as Reagan and Bush Jr did. So, if your premise was true, then why, under both Republican and Democratic leadership was inflation not so rampant? Because it was not government spending, it was a whole host of other factors.

After Covid, what we had was a perfect storm. We had supply chain disruptions in countries where Covid was causing delays and nonproduction due to those countries' policies on Covid. We had producers here reluctant to meet consumer demand because we are pretty much acting foolishly and thinking "it will never happen to me" sort of thing. Then we had the FED not reacting enough on interest rates to help curb inflation until inflation was causing concern. You see, it has nothing to do with governmental spending because history tells us that government spending is not a major factor. Consumer spending is, and consumers mean businesses which are not investments, and individuals buying all sorts of stuff from necessities to wants.

Furthermore, I am not blaming any of the presidents on their spending habits nor do I want to get into that discussion in this thread. But the reality is that government spending is not the cause. It's not fiat money, or printing money, because we have been doing that since we left the Gold Standard under Nixon.

https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi

 

I am talking about the rate of inflation, no matter what it is. And yes, there are inflationary pressures even if the inflation rate per anum is 1.5% for instance. So, that is a non-sequitur argument here.

You have to look at the root causes of inflation each time. The 14% in 1980 was the oil embargo from OPEC that we were dealing. Today, it is supply chain disruptions due to covid, consumer spending outweighing the supply, and monetary policy not reacting fast enough to raise interest rates to curb inflation.

I am not interested in what you think it means. I am only interested in the established definition and analysis in economics. Trying to spin it the way you are talking about shows me you failed high school economics class, and/or even a college class on basic economic theory. Or you are simply regurgitating this from an AM conservative radio host who has absolutely no idea what he is talking about. Sure, it sound nice that fits your myopic idealogy here, but reality rarely, very rarely, fits into that realm.

 

Well I'm not. Printing money is only ever not going to be associated with inflation if there is also some deflationary effect present at the same time.

(It's more complicated than that, but that's as simple as I can easily make it here)

Regardless of the root causes, the Fed should not have been expanding the money supply at the same time there was inflation, even if it was being caused by something else. Of course it's not the Fed's fault, it's the government's fault for overspending.

Well I refuse to play that game. Because when you use economic terminology with average people, those words mean something else to them.
The English language meaning is different from the economic terminology definition.

So let's please try not to make this a semantics argument.

 

The real question is, how much poorer can the Media of the Right's, "expert sources," become. This guy hasn't worked at the I.R.S., for five years. What the hell does he know? This is nothing other than one former employee's speculation.

But hey, it's not like it's possible he's just a crank, or anything, like you all on the Right accused whistleblowers against Trump (and actually serving in his Administration) of being, right?

 

Who made you Pope?

It isn't like you are just a biden-pologist making excuses for the failed democrats.

 

Printing money, or expanding the Money supply, or shifting the money supply, allows several things, ease of credit, aka loans, mortgages, etc, and balancing the GDP growth. But as the economy expands, the money supply will expand with it. And yes, it's more complicated than that, but you got it backwards from a Von Mises point of view.

The root causes are important because that tell us why inflation is going up or down. As I have demonstrated, we have had spending galore a number of times from the 1980s onward, and yet, as demotrated from historical fact, inflation was in relative check, in fact, in the 1980s, it went down significantly from 14% down to 4%.

As for government spending, that is not related to inflation, but what is considered "good" or "bad" fiscal policy. Fiscal policy has little to do with inflation. Remember, Trump had a $1 trillion deficit in FY 2017 and 2018, and a $900 billion deficit in FY 2019, all when the economy was doing good with average GDP, tight jobs market, etc. So, where was the inflation then? Or were you not concerned because it was Republican spending like a drunken sailor and not a Democrat? Or in other words, were you complaining then when all that spending was being done? My guess, no.

So, its really not about spending per se, is it? It's about who is the one spending, is it? Republicans can do, but god forbid if Democrats do it too, but none of that causes inflation.

I would suggest you learn economics and not try to use the Webster Dictionary for your arguments. Those two definitions you are referring to, the game of semantics that you started when you said, "you know there are two different meanings....." sort of thing shows how little you know about economics. There is even a book out there for you, "Economics for Dummies" that can help you, or cliff notes is another option here.

In terms of economics, there is only one definition of how inflation is defined. That is the second meaning in webster's dictionary. And that is the only definition that needs to be concerned when discussing economics, economic theory, and economic thought.

 

We the middle and working classes and small family owned businesses and farms are THE targets of this bill.

 

There’s lots of that around here from both coasts urban areas

 

You mean like the unfunded $8 trillion that were injected under Trump into the market in 4 years, the most under ANY president in history? He called himself the king of debt for a reason....

 

Consumer spending yes, but not government spending. There is no empirical data to support your claim, not even close.

If that was the case, shouldn't we have had huge inflation when Trump's $1 trillion deficits in FY 2017 and 2018 occurred along with qualitative easing, near zero percent required reserve interest rates, and so forth? Or do you think that it was only DJT that kept the interest rate away because he was the scarecrow out in the field of economics?