Is inflation the invisible tax?

Question

The Bush administration has been touting its "tax cut" as an economic boon for the economy. They fail to point out, however, the the spending deficit, which worsens with this tax cut, is creating a high rate of inflation. As I mentioned in another question, the US dollar has lost 34% of its value in just 5 years.
The fact that the average American must pay more for its products and services is an added tax to the middle class. If the government continues to spend more money without raising taxes, this inflation rate will snowball.
Bush's economic policy is a disaster. You cannot decrease taxes without decreasing government spending. Somehow the excess government spending will cost the taxpayer. Inflation is the cost we are facing today.

International trade has been shifting to the Euro because they fear the federal deficit will bankrupt the dollar. I would have to diagree with the answerer who stated we have little control over the international currency exchange.

Answer 1

To be fair, Bush's tax cut has worked surprisingly well, but it is Reagonomics and common sense tells us in the long run it will not work. The economy has grown, and numbers on Wall Street are good which may save us in the end.

Also, the US government has little control over the proliferation of foreign currency, if the Euro becomes stronger decreasing the value of the dollar, then there's little we can do to fix that in the short term.

Answer 2

-Is inflation the invisible tax?

It is pretty much invisible but it's not a tax.

-The Bush administration has been touting its "tax cut" as an economic boon for the economy.

It has been a boon. REvenues from income tax are up from what they were before.

-They fail to point out, however, the the spending deficit, which worsens with this tax cut, is creating a high rate of inflation.

You want to talk about a high inflation rate and blame Bush for it go right ahead. But you just may be wrong. Inflation today is very low when compared to the terms of Carter, Reagan, and Clinton.

The rate of inflation you quote would have had to be almost 7% per year. Inflation has NOT been that high during Bush's term.Even with compounding it doesn't come to 34%. You want to talk high inflation look at the Carter years.

-The fact that the average American must pay more for its products and services is an added tax to the middle class.

How is this a tax?

-If the government continues to spend more money without raising taxes, this inflation rate will snowball.

Well the Democrat now control Congress when are they going to cut spending?

-Bush's economic policy is a disaster. You cannot decrease taxes without decreasing government spending.

Sure you can. As long as the tax reductions generate greater income tax revenues.

-Somehow the excess government spending will cost the taxpayer. Inflation is the cost we are facing today.

Yep I agree --but the cost is lower today than it'd been in the past.

Answer 3

A lot of people seem to believe the government reports on the rate of inflation. That's really a joke. The government completely changed the formula for calculating inflation.
During the 70s, staples weighed in heavily on the inflation rate. Today, they are hardly counted. The government puts more emphases on items that cost less over time like TV sets and computers.
That's how they beat inflation in the 70s. They changed the formula. To get a real idea of inflation, you need to look at the international currency market. The dollar has lost more than a third of its value in the last 5 years. That is inflation.
When in the world did anybody ever start to believe figures the government publishes? I am afraid the government looks thru rose colored glasses.

Answer 4

Not that I'm completely happy with Bush's fiscal policy but to assume that higher taxes are the only way to generate higher tax collection is absurd. The tax collections are going through the roof. And a little enforcement will make it even better. Problem is it is being spent on out of control entitlement increases. Entitlements that have only been around about 50-60 years. Way too much being given away. Wars don't help but they're a necessary evil. You can not get around war as history shows.

Answer 5

Every Republican Administration has used forced inflation to cover all of their corporate tax breaks all the way back to President Taft's Administration. If you remember right, Taft caused the break down of the banks and the great depression.

Answer 6

You do realize that all of the same measurement tools are used now as were used during Clinton's economy?

Inflation is and has been at a very low level based on historical numbers.

And I still think its funny when people try to pretend that Clinton didn't use Supply Side Economics in his policies. Did Clinton return to the pre-Reagan days when the rich were taxed by 70%+. Nope.

Some of you people need an education.

Answer 7

BEST ASK WHY SOME GOVERNMENTS LIKE INFLATION. TWO EDGED SWORD. IF GOV BORROWED ON A FIXED INTEREST THEY GET TO PAY BACK WITH INFLATED DOLLARS. RATE OF EXCHANGE NOT INCLUDED IN COST OF LOANS. GUARANTEED BY DOLLAR NO MATTER THE VALUE OVERSEAS.
THE OVERSEAS DEVALUATION OF DOLLAR HAS NOT HIT US SHORES SO THAT PEOPLE NOTICE BUT IT IS HEADED HERE REAL FST. AS OF NOW US IS TRYING TO BUY UP ALL ITS CURRENCY FOR AFGHANISTAN AND IRAQ THAT WAS NOT BORROWED JUST PRINTED AND OUR STTE IS TRYING TO GRADUALY DECREASE ITS VALUE OVERSEAS SO FREIGN ENTITYS WILL USE THEM TO BUY US PROPERTYS AND BUISNESS. IN LAST YEAR ALONE OVER 4 MILLION ACFES AND ALMOST 1 TRILLION DOLLARS OF US ECONOMY WENT INTO HANDS OF OVERSEAS ENETITYS.
OVERSEAS ENTITYS BUYING US CORPS AND LAND AND THEN PAYING LOWER WAGES AND BENFITS THAN WORKERS HAD BEFORE.

Answer 8

by all way, no