Subject:
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Re: stuff (was: Art Debate Was: [Re: Swearing?])
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Fri, 21 Jan 2000 01:09:09 GMT
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Viewed:
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2508 times
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On Thu, 20 Jan 2000 11:45:32 GMT, Larry Pieniazek <lar@voyager.net>
wrote:
> Jasper Janssen wrote:
> > What is the reasoning behind this? Why is a 40% straight sales tax on
> > everything less distortive than, say, a 5% sales tax except on food?
>
> Left out an assumption, thank you, as usual, for not letting me get away
> with one atom's worth of implicitness. Sigh.
And I wasn't thinking straight, or I'd have known what you meant.
> But (and I don't know if the numbers balance, assume they do) 4% across
> the board, is, I claim, less distortive than 5% on all but food. The
> latter incents food consumption slightly.
Yes. And...?
> > Why? Production without consumption == inflation. That's not a good
> > thing.
>
> Prove this assertion, please. I've heard it before and I do not buy it.
> In fact, I have heard the opposite much more frequently (== DEflation
> or depression) and I don't buy it either.
When there is production that is going unbought because money that
would have been used for consumption (in addition to there being
larger production), you get inflation. *shrug*. Fairly basic tenet,
isn't it?
How on earth you'd get deflation from incenting investment is beyond
me.
>
>
> > Hmm. Strange. Economic theory and practice in the US has always been
> > to encourage consumption, and let that do the work. It hasn't exactly
> > been a big failure, has it?
>
> Well, if you call extremely high credit card debt, instant gratification
> as a mentality, and higher levels of personal bankruptcy than ever
> before a success, I agree. Yes, it has had some positive effects but
> again, I claim you get distortive effects at the edges.
Yeah. But economically, apart from the high consumption mentality over
there, you are/were not all that different from other western
countries. One has to assume that the huge economic growth on your
side of the pond has to do with this.
And as I said, sans economic growth, you're nothing special.
Jasper
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