But if it hasn't been taken out of the economy via taxes, there is no basis for it affecting the economy.
That's simply not true -- it's a very naive view of how the economy works. It's instead being taken out of the economy as *debt*, as reduced available credit for the government to use (a serious problem when we're we're facing imminent stagflation), as damage to bond ratings, as imminent inflation because the government is forced to print money, as damage to the dollar (which affects nearly every sector of the economy), and so on.
These problems aren't as *visible* to the average guy in the street, but they certainly cause considerable economic damage, just less directly. Indeed, they are far more damaging to the economy than simple income tax rises are: they're much more systemic, and harder to adjust for...
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Date: 2008-03-20 02:16 pm (UTC)That's simply not true -- it's a very naive view of how the economy works. It's instead being taken out of the economy as *debt*, as reduced available credit for the government to use (a serious problem when we're we're facing imminent stagflation), as damage to bond ratings, as imminent inflation because the government is forced to print money, as damage to the dollar (which affects nearly every sector of the economy), and so on.
These problems aren't as *visible* to the average guy in the street, but they certainly cause considerable economic damage, just less directly. Indeed, they are far more damaging to the economy than simple income tax rises are: they're much more systemic, and harder to adjust for...