Armstrong Economics Blog/Economics
RE-Posted Aug 30, 2017 by Martin Armstrong
The Germany has posted a stunning 4.3% rise in tax revenues during the first half of 2017. I have warned that while the ECB keeps buying government bonds to “stimulate” the economy, they keep trying to sterize the expansion by raising taxes and hunting people for taxes.
They do not seem to grasp that injecting money by buying government debt and then raising taxes on individuals will not stimulate the economy. Nearly 10 years of this insane policy and we have less than 2% inflation. They seem incapable of comprehending that simply increasing the money supply does not produce inflation. The only thing that counts is the increase in net disposable income.
If I create $100 and give it to you and then demand you give me back $90, did I really increase the moeny supply by $100 or just $10? It seems that common sense is just rare these days.