Talking Tax Cuts, Inflation

When Congress cuts income taxes, they increase your inflation tax in secret. This is like taking money out of your left pocket rather than your right pocket. Either way, you pay. When it comes to taxes, ignore tax rates and focus on government spending. Your taxes only go down when spending goes down, not when income taxes go down.

Income tax cuts combined with spending increases creates massive deficits. Since people don’t want to loan money to the federal government at two percent interest rates, the Federal Reserve electronically prints dollars to pay for massive deficit spending. The more money they print, the more inflation goes up. Real world inflation without deceptive “hedonic” adjustments is about seven percent per year, not the two percent advertised amount. Since 1996, college education has increased 200 percent. Child care has increased 125 percent. Health care has increased 110 percent. Inflation hits the poor the most. Incredible human suffering is hidden inside average inflation statistics.

This is why I am working to reform the Federal Reserve and the financial system. We need a new system now before a health crisis becomes a food crisis.

James Dean is a Republican candidate to represent Montana in the U.S. Senate.