To the editor:
Inflation is officially defined as “an increase in the money supply;” which often results in price inflation when the money moves through the economy with increasing velocity. An increase in the money supply acts as a hidden tax on consumers through the price inflation it often causes. The rise in the money supply is best represented by the increase in M3 as found on the Federal Reserve Economic Data Chart.
“The Inflation Reduction Act of 2022” can best be described as a magical misnomer with its inflationary new spending package of an additional $740 billion. As the late Sen. Everett Dirksen once said, “a billion here, a billion there, and pretty soon you’re talking about real money.” Perhaps, this is why the Tax Foundation came to a different conclusion in its assessment of the bill. There is a 20-minute podcast available on their website should anyone wish to listen to their discussion of the impact of this bill or read about their conclusions. The bill may reduce capital investment and cause long-term stagnation; however, it will unleash a robust set of 80,000 IRS agents ready to increase audits funded by $80 billion of our tax dollars.
Recession: Now we move on to magically redefining the term recession. A recession “is a period in which real Gross Domestic Product declines for at least two consecutive quarters.” This is the widely accepted standard definition used by Nobel laureates Paul Samuelson and William Nordhaus. While we just met those benchmarks in the first two quarters of 2022; magically we are told this is no longer the definition of a recession.
In a recent interview, Phillip Magness, Research and Education Director at AIER in Great Barrington, described how he was “fact-checked” on this standard definition of a recession. A high-tech algorithm has redefined the term, so we can all sleep better at night knowing that a magical computer system is ready and waiting to save us from an economic recession that could arrive due to the policies implemented by our Modern Monetary Theory.
“The wise and correct course to follow in taxation is not to destroy those who have already secured success but to create conditions under which everyone will have a better chance to be successful.”
— President Calvin Coolidge.
Lucinda Shmulsky
New Marlborough