Return of the money snatchers?
Cato Institute
by Richard W. Rahn
04/17/09
When will the next round of inflation hit, and how can we protect ourselves? Many economists and commentators, including yours truly, have warned about the potential of a new round of high inflation due to the great expansion of government spending. But does an increase in government spending necessarily translate into higher inflation? The answer is ‘no,’ but it most often does, and this is why. An increase in government spending must be financed by increasing taxation, or increasing government borrowing, or creating more money by the central bank (the Federal Reserve), or all of the above. Increasing taxation or government borrowing does not directly increase inflation, but if the central bank creates new money faster than goods and services are increased, inflation will result...
http://www.cato.org/pub_display.php?pub_id=10128
Informant: Thomas L. Knapp
http://freepage.twoday.net/search?q=government+spending
http://freepage.twoday.net/search?q=Federal+Reserve
http://freepage.twoday.net/search?q=taxpayer
http://freepage.twoday.net/search?q=Richard+W.+Rahn
by Richard W. Rahn
04/17/09
When will the next round of inflation hit, and how can we protect ourselves? Many economists and commentators, including yours truly, have warned about the potential of a new round of high inflation due to the great expansion of government spending. But does an increase in government spending necessarily translate into higher inflation? The answer is ‘no,’ but it most often does, and this is why. An increase in government spending must be financed by increasing taxation, or increasing government borrowing, or creating more money by the central bank (the Federal Reserve), or all of the above. Increasing taxation or government borrowing does not directly increase inflation, but if the central bank creates new money faster than goods and services are increased, inflation will result...
http://www.cato.org/pub_display.php?pub_id=10128
Informant: Thomas L. Knapp
http://freepage.twoday.net/search?q=government+spending
http://freepage.twoday.net/search?q=Federal+Reserve
http://freepage.twoday.net/search?q=taxpayer
http://freepage.twoday.net/search?q=Richard+W.+Rahn
rudkla - 20. Apr, 10:31
