Economy rescue: Adding up the dollars

[Avinash_Tyagi]

TheRealMafoo said:

Avinash_Tyagi said:
Not that much actually

 

This is not the problem.

Look at how much money was in circulation from 1940 to 1970. Same with the great depression.

Back then, the government did not have the ability to just make money up. They were commodities backed, so it had to tie back to something. If they wanted more money to spend on something, they taxed the shit out of the people, and then spent those tax dollars.

Today it's very hard to tax more and actually collect more money. The people are about taxed out. Also, we are not commodities backed anymore, so if government feels it needs money, it just prints it.

What the government has effectivly done over the last year, is asked the American people to take every dollar they make, rip it in half, and treat each half as a dollar.

This will take a while to enter circulation (as the banks get the money first, when it's actually worth two dollars), Once it's in the market, the dollar will be worth half of what it was worth as prices will rise. The sad thing however, is your paycheck doesn't.

 

 People are not taxed out, you really don't get it do you, in real terms US taxes are among the lowest in the developed world.

 

Also at the moment inflation is down, right now the concern is deflation not inflation