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To: c.hinton who wrote (2677)	11/10/2008 12:28:35 PM
From: TimF	Read Replies (1) \| Respond to of 3816

you raise taxes to choke off inflation ....when inflation is out of controll. Much better to have the fed act on inflation. Raising taxes is slow, and then often either won't have a lot of effect, or will have way too much effect. Its a poor weapon against inflation.

To: c.hinton who wrote (2677)	11/10/2008 3:33:39 PM
From: Oeconomicus	1 Recommendation Read Replies (2) \| Respond to of 3816

"you raise taxes to choke off inflation ....when inflation is out of controll." O.M.G. No, you don't and Keynes never said any such thing. Keynesian fiscal policy is concerned with affecting aggregate demand, not inflation. On the cause of inflation, Keynes was essentially a monetarist - he and they both contended that inflation is ultimately a monetary phenomenon and that the only way to permanently affect the price level is through monetary policy. Where he differed with them in regard to inflation is in advocating the use of discretion in monetary policy - countercyclical adjustment of the money supply - to maintain price stability, rather than passive, rules-based monetary policy. His policy advice for reducing inflation was monetary contraction, not "gradualist" contractionary fiscal policy. And he NEVER advocated "rais[ing] taxes to choke off inflation." BTW, if you are actually interested in learning something, as opposed to just spouting off on things about which you know little, here's a good journal article on this subject, "Keynes on Inflation": ideas.repec.org