Lamont McClure is a gifted orator. He's been a successful county executive. But as an economist, he sucks. Last night, in support of his proposed tax cut, he argued that putting more money in our pockets would reduce inflation. I hate to brake it to you, but increasing the amount of money people get is precisely what causes inflation.
There are several ways to reduce inflation: higher interest rates; a reduced money supply; supply side policies; and tax increases.
So if McClure is serious about fighting inflation, he should propose an immediate tax hike.
Don't worry. I think he'd rather put money in your pocket.
16 comments:
Check out the video. Mr. Lynch sent his We the people 20 strong men army to the county council. The guy speaking called out McClure and council for being basically criminals. He waved a copy of the Bill of rights and said the people are mot happy. I can almost see why some of these local elected officials end up not running for office.
I wonder if they will be a permeant presence.
Now that he got in on a no tax increase, he will raise taxes?
For anyone, especially the county executive, to think a tax decrease at the county level is going to move the inflation rate in the county is unsettling.
Perhaps more unsettling is your thought that a county tax hike is going to be good for inflation. Assuming that the economic activity in the county is contained within its borders (which is obviously ludicrous), that would assume that county government is going to take the money from that tax hike and lock it in a vault somewhere.
But we know that's not going to happen. Instead, the county will spend the money, giving it to a privileged few and then crowing about the immediate benefit of that spending or the benefit to a particular group. Of course, it will also ignore the long-term consequences and the effect on other groups. That's the way government works, and is why government spending (and taxation) should be limited. It's simply not as fair or efficient as the free market.
Inflation in the United States comes from only one place - Washington D.C. - and is primarily a money supply issue. Unfortunately for us, our representatives in Washington don't have the financial discipline to stop using the printing press they have in their basement to print more money. In doing so, they're devaluing every dollar we have, and that includes the dollars county government takes from us.
"Perhaps more unsettling is your thought that a county tax hike is going to be good for inflation"
This is Economics 101. Tax cuts spur inflation. So does anything that heats up the economy. Tax hikes reduce inflation. So does anything that slows down the economy. I am not suggesting a tax hike. There are other avenues like raising the interest rate, which is terrible for my line of work.
I agree that nothing the county does has any impact on inflation.
"Check out the video. Mr. Lynch sent his We the people 20 strong men army to the county council. The guy speaking called out McClure and council for being basically criminals."
I thought Benjy Jacques was boring. I still am unsure whether his remarks merit a post. He has a first amendment right to attend Council meetings and call McClure and Council corrupt, but he really said nothing. He was more than a little short on specifics, just like his hero.
I doubt this crew will be attending many Council meetings. They'd much rather wave flags and guns on a street corner.
No council member should feel intimidated by these thugs.
It’s ‘break’ to to you….not brake. Just sayin’…..
No idea what McClure actually said, but tax cuts or increases in a county have nothing to do with inflation as they represent such a small portion of anyone's income. The small amount of money put into, or taken out of, circulation by a tiny tax cut in very small part of the overall economy isn't anywhere near enough to "move the needle" and affect the inflation rate.
I suspect what he was trying to say was that tax cuts help county residents DEAL with inflation because it gives them some extra money. This is accurate if you subscribe to the "every little bit helps" way of thinking.
Here's the thing about attending local and county board meetings.
All their anger, grievances and ideas on how things should be done generally gets a giant bucket of cold water thrown on them because they have to sit and actually LISTEN to what is happening, why its happening and how its happening.
While I agree tax hikes will reduce inflation and slow the economy, the opposite is not necessarily true. In a booming economy goods are being produced which leads to more jobs and better output. Inflation occurs when production cannot meet demand. Also, this is true whenever the Government adds money to the system without producing anything. Look at the cost of college with easy money for loans, the government spending by Biden from money created out of thin air, with no offset to increase the production. Free money isn't free. Inflation saying in the old days was "Too much money chasing too few goods" I'm not saying a booming economy can't lead to inflationary pressure, but it will happen at a much slower rate than what is happening now. Lastly, whatever McClure decides to do will have no impact whatsoever on inflation in our little microcosm of the world called Northampton County, but it will help the struggling families out there.
Seriously....what is the cost to taxpayers to attempt to refund a hundred dollars or so? Is this a fiscally responsible response ? Why not hold taxes at current level and use federal money for helping with those that are in need....
Anon 3:19 said:
"Seriously....what is the cost to taxpayers to attempt to refund a hundred dollars or so? Is this a fiscally responsible response ? Why not hold taxes at current level and use federal money for helping with those that are in need...."
Three points about only refunding "a hundred dollars or so":
1) Go tell the widow or single mom who are trying to pay their taxes and stay in their house that it's not a significant amount.
2) While you only look at it as a small amount this year, it accumulates over the years until the tax rate is raised.
3) If you feel the amount of the tax cut isn't significant, feel free to throw in an extra hundred when you pay your county taxes next time. And tell your friends to do the same. Then come and tell us how insignificant it is.
McClure's tax cut is responsible policy, and it fairly returns some money to those who are paying the taxes.
Stop looking for new ways for the government to pick winners and losers. It's inefficient; almost never works as intended (or without unforeseen consequences); and is the cause of most of the financial problems and political division that our country is facing.
Agree. Preserve farmland with extra money and help our quality of life
Everyone here appears to be assuming that a) inflation is only caused by too much money chasing after too few goods, and/or b) fiscal policy can be used to expand and contract the money supply by just removing or adding money to circulation, relative to baseline.
Assumption A is not always true, and I believe money supply is not driving inflation at the moment because gas prices have seen some of the steepest price increases. That raises the cost of transportation of all other goods, which gets passed along to consumers, irrespective of how much people are able to pay for them.
It isn't a coincidence that the inflation of the Carter administration happened at the same time as the OPEC embargo.
Assumption B is not true because money that is taxed doesn't just disappear. It gets shoveled back into the economy (albeit unevenly) via public sector spending. Generally, monetary levers are what the government uses to try to control inflation, which is why monetary policy is controlled by the Fed to insulate it from the political pressures experienced by Congress.
annon 5:24, Barron or Dertinger. Thank yo for yet another fawning post about your leader.
Just look what trillions in raining "stimulus" dollars have done for prices. From gas and groceries to semiconductors and steel, the reckoning has arrived in our homes. Many Democrats think this inflation is a good thing. I'm glad to read that you don't. Inflation is the meanest flat tax of all, as it most brutally attacks those with the lowest incomes. Continued inflation and condescending malaise lectures about how we need to suck it up are going to flip a lot of things red next November. Ask Jimmy Carter how that works.
He needs a lot more than that.
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