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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (24609)	10/17/2004 7:36:27 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

Indeed, there-in lies the problem with Ronald Reagan's tax-cut scam. Though it's likely that he and his advisers were so little acquainted with history that they did not understand what they were actually doing. It's difficult to believe that they were evil enough to knowingly create these changes being fully aware of the consequences. Replacing income tax and other tax levies with the hidden tax of monetary devaluation looks like magic on the surface but in the end destroys the economy. Of course it fools those who believe in the monetarist school because the increased debt load increases the money supply which they believe is the source of all prosperity. In the monetarist mind, increased money is increased capital, when in fact we all know that increased money merely represents less of the same capital. Shifting taxes from income tax to devaluation tax has merely led to below market interest rates, as the supply of false money exceeds real demand. As the monetary devaluation tax erodes the value of work and investment the economy produces less of it and more of the financial speculation which is rewarded by tax of money creation. We can see this in the negative real savings rate, and the rise of one speculative bubble after another - creating the false prosperity which Schumpeter noted during the period after WW-I during the 1920s.