No, seriously if automatically. The last twenty-five years of our financial history should demonstrate that the Fed pushing interest rates up or down has little effect on anything. Kenneth Galbraith made the same observation based on his experiences managing the Great Depression. They do it to be seen as "doing something" but when the chips are down it's largely ineffective. No, the one device that really will slow inflation is serious tax increases. Congress doesn't like to raise taxes at any time and the GOP is opposed in principal. Enter Trump. Or rather, the Trump Tax Code. There are a number of things I like very much about the Trump tax reforms but the gigantic tax cut for the wealthy and corporations wasn't one of them. Well! The cuts expire in 2025! We will have a significant tax increase only, say, a year later than ideal but with neither muss nor fuss.
Okay, folks, here's the plan to tackle inflation: we're going to cut taxes so much, they'll practically be invisible. You'll be looking everywhere for your taxes and you not gonna find them. Poof! Gone! Regulations? Who needs 'em? It's like a Black Friday sale for regulations, everything must go! And jobs? We'll have so many jobs, you'll be tired of having jobs. You'll be double bolting your doors to keep all the jobs out. Trust me, this economy is gonna be tremendous. The greatest, the best, the most fantastic inflation reduction you've ever seen – it's gonna be huge!
Is this right? Galbraith graduated from Cal with a PhD in '34, five years after the Great Depression began. Keynes?
Yes. He did. "Galbraith’s career included that of a bureaucrat in the government of Franklin Roosevelt’s New Deal..." Full thing here: https://www.cairn.info/revue-finance-et-bien-commun-2008-1-page-91.htm#:~:
Galbraith was a staunch supporter of fiscal policy and had little use for monetary policy in addressing the Great Depression. That work of his that I'm able to read and understand, his popular works, did not address tax policy and I don't know what he would think of increasing taxes to combat inflation. I do know that he wouldn’t have approved of tax cuts during prosperous times. That's a stupid and dangerous Republican doctrine that has resulted in our current national debt becoming hard to manage. Major tax cuts during the GW Bush and Trump Administrations were deeply irresponsible.
