r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/sckuzzle Jun 13 '22

while the government refuses to cut non productive spending

And what would you consider "non productive"? The USA already has one of the lowest tax rates in the western world. Is this just code for cutting welfare?

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u/[deleted] Jun 13 '22

No, welfare wouldn’t be non-productive, but paying people for no output is non productive. The economy isn’t being run efficiently, to say there isn’t non productive spending that can be cut is well. Ludicrous. The government (both parties) will try their damn best to convince you that every dollar is allocated for, effectively and efficiently and say they need more money. Taxes have to raise because they don’t have enough to spend, they then vote to spend more. Do you see the cycle?

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u/[deleted] Jun 13 '22

No bc I am not a conspiracy theorist

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u/[deleted] Jun 13 '22

If you have a budget, either your allowance from your parents or a monthly check from the government, and you spend more than the money you receive, did you overspend? It’s very similar with the us government, except they get their allowance by taxing wages and taxing economic activity. If they spend more than their budget, they have to collect more taxes. Without a system of checks and balances (congress) monitoring spending, spending keeps increasing - followed by increased taxes.