Post
Topic
Board Politics & Society
Re: Is a Madmax outcome coming before 2020? Thus do we need anonymity?
by
AnonyMint
on 06/04/2014, 07:22:55 UTC
http://armstrongeconomics.com/2014/04/05/lagarde-part-ii/

Quote from: Armstrong
Increasing the money supply will NOT be inflationary when you are offsetting that by raising taxes. If the total money supply is $1,000 and I tax you 20% leaving you $800, increasing the money supply at $1,500 and raising taxes to 50% is still deflationary for you end up with less – $750. Absolutely everything is balanced. This is why the cause and effect scenarios fail every time – it is a bell curve in everything.

Armstrong forgets to make the point that increasing the money supply can increase the general price level causing income, capital gains, and VAT taxes to be higher, while there no net gain in purchasing power.

Thus increasing the money supply even while holding taxes constant, actually eats purchasing power. Whereas increasing money supply with no taxes at all, would not harm purchasing power.