patrick.net

No, everyone getting more money is not inflation. The money supply does not change. The government has less money.

The compromise plan does generally work out well for just about everyone. The democratic plan would have been slightly better for people who itemize but make under $100k a year (not that many people). For me, the difference between the compromise plan and the dem plan is about $5k. I'll actually pay less in taxes next year than I paid this year, despite making more money.

of course, low income and unemployed people are going to be royally fucked when the cuts start rolling in to pay for this.

It is inflation, because this money isn't coming from the existing pool, its rather money created out of thin air. When that type of money hits the markets it creates inflation (usually in food and gas).

Money supply isn't constant, government does print a lot of it out of thin air.
Here is a humorous look at it on John Stewart show... it does highlight the issue:
http://www.youtube.com/watch?v=Tw2ClOJuQII

ChrisV says

because this money isn’t coming from the existing pool, its rather money created out of thin air.

Not so, AFAIK. While the Fed is injecting another $600B of cash into the economy next year, these particular tax cuts will reduce revenue, which will be replaced by additional treasury bonds, resulting in no net growth in money supply.

But I could be wrong about that.

>http://www.youtube.com/watch?v=Tw2ClOJuQII

that's some good comedy there.

ChrisV says

It is inflation, because this money isn’t coming from the existing pool, its rather money created out of thin air. When that type of money hits the markets it creates inflation (usually in food and gas).

You are conflating two completely independent things.

Right now, these cuts will be paid for by borrowing more money.

At some point in the next 5 years or so, we're going to have to decide to either cut the debt (by cutting spending or putting taxes back in place) or to devalue the currency.

So far, we aren't doing any of these things. The Fed's recent printing has not caused any inflation because it is simply offsetting the deflation caused by the cutback in deficit spending at the personal, local, and state level.

Kevin says

Right now, these cuts will be paid for by borrowing more money.

How can you call these cuts? Taxes won't be going up - and that is a cut? A tax CUT would mean that people would be paying LESS than they are currently paying.

We are paying for government with borrowed money - not borrowing money and then sending it out to people...unless you are talking about the people that receive EITC and other government benefits.

EightBall says

Kevin says

Right now, these cuts will be paid for by borrowing more money.

How can you call these cuts? Taxes won’t be going up - and that is a cut? A tax CUT would mean that people would be paying LESS than they are currently paying.

The previous top marginal rate for 2011: 39.6%.
The rate after this legislation: 35%.

Yes, that is a cut.

Not to mention the payroll tax holiday.

We are paying for government with borrowed money - not borrowing money and then sending it out to people…unless you are talking about the people that receive EITC and other government benefits.

Wrong. We borrow lots of money and then send it to people. Specifically, we send it to military contractors, health care providers, agribusiness, and old people.

Most government spending is the process of redistributing wealth from the middle class to the wealthy in the name of creating jobs for the poor.

Kevin says

Most government spending is the process of redistributing wealth from the middle class to the wealthy in the name of creating jobs for the poor.

While they always talking about middle class. They should STFU about it. :)