On Mon, 17 May 2010, keith smith wrote:
> I think if taxes were reduced by 25% or even 50% we would
> see deflation. We need to deflate.
If one reduces taxes (I assume here, you mean the net
effective Federla ones), the federal deficit goes up faster,
and the feds need to borrow more to fund its payment
obligations. This sucks funds away from the private sector,
who then need to 'outbid' the feds for business borrowing.
Bidding up rates to but (here, rent the use of money) the use
right of same asset sounds like price increases with no change
in the underlying.
That is asset price inflation
I dont ses the causal link you are suggesting exists to cause
a deflation.
-- Russ herrold
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