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Pastimes : Let's Talk About Our Feelings!!!
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To: Ilaine who wrote (57446)10/7/1999 9:25:00 PM
From: nihil  Read Replies (1) of 108807
 
You're right --it's "without" instead of "with."

You have to look at the flow of funds for the effects of taxes and spending. Collecting taxes takes cash out of taxpayers hands and increases government cash balances but decreases taxpayer payments, thus is deflationary. Expenditures by the government are not necessarily inflationary, because all they do is take money out of government cash balances and increase the cash balances of those who receive the government payments. No money goes into circulation until these hew cash balances are spent. If they are merely used to payoff debt, they have no inflationary effect. Government ordering (obligations) is inflationary. Spending by the recipients of government spending is inflationary. A tax cut is not necessarily inflationary, but the recipients spend the tax cut. If the recipients save or pay back debt with their tax refunds or credits, there is no inflationary effect.
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