{"id":1485114,"date":"2022-05-20T07:31:00","date_gmt":"2022-05-20T11:31:00","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1485114"},"modified":"2022-05-20T07:31:04","modified_gmt":"2022-05-20T11:31:04","slug":"the-bezos-biden-inflation-debate","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-bezos-biden-inflation-debate\/","title":{"rendered":"The Bezos-Biden Inflation Debate"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">8<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fthe-bezos-biden-inflation-debate%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1485114&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>Taking a page from his rival and fellow space tycoon Elon Musk, Jeff Bezos has been tweeting surprisingly acerbic criticisms of the progressive powers-that-be, precipitating a debate with the Biden administration over economic policy.<\/p>\n<p>On Friday, Biden\u2019s office issued a tweet proposing higher and \u201cfairer\u201d taxes on \u201cthe wealthiest corporations\u201d as a way to \u201cbring down <a href=\"https:\/\/fee.org\/articles\/how-inflation-drinks-your-milkshake\/\">inflation<\/a>.\u201d<\/p>\n<p>Bezos <a rel=\"nofollow\" href=\"https:\/\/twitter.com\/JeffBezos\/status\/1525309091970699265?s=20&#038;t=lP27kq6maluLbbOhwlwKzA\">characterized<\/a> the tweet as a \u201cnon sequitur\u201d and accused the administration of \u201cmushing\u201d together two unrelated issues.<\/p>\n<p>But to be fair to Biden, the tweet isn\u2019t as much of an incoherent word salad as it might seem. According to Biden\u2019s <a rel=\"nofollow\" href=\"https:\/\/www.whitehouse.gov\/briefing-room\/statements-releases\/2022\/05\/10\/the-biden-harris-inflation-plan-lowering-costs-and-lowering-the-deficit\/\">official anti-inflation plan<\/a>, the missing link in the seeming non sequitur is <em>deficit reduction<\/em>:<\/p>\n<blockquote>\n<p>\u201cPresident Biden has a plan to tackle inflation \u2013 by lowering costs that families face and lowering the federal deficit by asking the large corporations and the wealthiest Americans to pay their fair share.\u201d<\/p>\n<\/blockquote>\n<p>How is this supposed to work? According to the conventional wisdom of mainstream economics, as expressed by <a rel=\"nofollow\" href=\"https:\/\/www.investopedia.com\/terms\/b\/budget-deficit.asp\">Investopedia<\/a>:<\/p>\n<blockquote>\n<p>\u201cOne of the primary dangers of a budget deficit is inflation, which is the continuous increase of price levels. In the United States, a budget deficit can cause the Federal Reserve to release more money into the economy, which feeds inflation.\u201d<\/p>\n<\/blockquote>\n<p>So Biden\u2019s plan is probably to raise taxes on the wealthy in order to reduce the budget deficit, and thus reduce the need for the Fed to cover the deficit with newly created money. One flaw in that plan is that, as Arthur Laffer illustrated with his famous \u201ccurve,\u201d higher tax <em>rates<\/em> do not necessarily mean higher tax <em>revenue<\/em>, as economist Daniel Mitchell <a rel=\"nofollow\" href=\"https:\/\/danieljmitchell.wordpress.com\/2022\/04\/20\/corporate-taxes-and-the-laffer-curve-2\/\">explains<\/a>.<\/p>\n<p>On Saturday, Biden\u2019s Twitter account referenced the deficit\/inflation connection in another tweet <a rel=\"nofollow\" href=\"https:\/\/twitter.com\/POTUS\/status\/1525556122840596481\">contending<\/a> that \u201creducing the deficit is one of the main ways we can ease inflationary pressures.\u201d<\/p>\n<p>But Bezos isn\u2019t buying that either. In a <a rel=\"nofollow\" href=\"https:\/\/twitter.com\/JeffBezos\/status\/1525846743278944256\">response<\/a> to that tweet, Bezos implied it is Biden\u2019s own lavish stimulus spending\u2014not insufficiently high corporate taxes\u2014that is to blame for inflationary budget deficits. Bezos characterized Biden\u2019s efforts to shift the blame away from his own policies as \u201cmisdirection\u201d and \u201cdisinformation.\u201d<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\">The newly created Disinformation Board should review this tweet, or maybe they need to form a new Non Sequitur Board instead. Raising corp taxes is fine to discuss. Taming inflation is critical to discuss. Mushing them together is just misdirection. <a href=\"https:\/\/t.co\/ye4XiNNc2v\">https:\/\/t.co\/ye4XiNNc2v<\/a><\/p>\n<p>\u2014 Jeff Bezos (@JeffBezos) <a href=\"https:\/\/twitter.com\/JeffBezos\/status\/1525309091970699265?ref_src=twsrc%5Etfw\">May 14, 2022<\/a><\/p><\/blockquote>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\">In fact, the administration tried hard to inject even more stimulus into an already over-heated, inflationary economy and only Manchin saved them from themselves. Inflation is a regressive tax that most hurts the least affluent. Misdirection doesn\u2019t help the country. <a href=\"https:\/\/t.co\/a8cygcunEG\">https:\/\/t.co\/a8cygcunEG<\/a><\/p>\n<p>\u2014 Jeff Bezos (@JeffBezos) <a href=\"https:\/\/twitter.com\/JeffBezos\/status\/1525846743278944256?ref_src=twsrc%5Etfw\">May 15, 2022<\/a><\/p><\/blockquote>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\">Look, a squirrel! This is the White House\u2019s statement about my recent tweets. They understandably want to muddy the topic. They know inflation hurts the neediest the most. But unions aren\u2019t causing inflation and neither are wealthy people. Remember the Administration tried\u2026 <a href=\"https:\/\/t.co\/GaMb3Kiu72\">pic.twitter.com\/GaMb3Kiu72<\/a><\/p>\n<p>\u2014 Jeff Bezos (@JeffBezos) <a href=\"https:\/\/twitter.com\/JeffBezos\/status\/1526239512958865409?ref_src=twsrc%5Etfw\">May 16, 2022<\/a><\/p><\/blockquote>\n<p>On Monday, Former Treasury Secretary Larry Summers weighed in, tweeting that Bezos is \u201cmostly wrong\u201d and contending that \u201cwe should raise taxes to reduce demand to contain inflation and that the increases should be as progressive as possible.\u201d<\/p>\n<p>Summers ascribes this stance to the president as well. But, again, Biden\u2019s official anti-inflation plan advocates tax hikes as a means of affecting <em>deficit<\/em> reduction. And it nowhere even mentions <em>demand<\/em> reduction. On this matter, Summers seems more Keynesian than even Biden.<\/p>\n<p>In truth, Bezos is mostly right in this exchange. Inflation is largely due to the US government having a <em>spending<\/em> problem, not a revenue problem. In 2021, the US government <a rel=\"nofollow\" href=\"https:\/\/en.wikipedia.org\/wiki\/United_States_federal_budget\">spent<\/a> $6.82 trillion, which was 30.5% of GDP. This is a mammoth uptick from 2019 spending, which was $4.4 trillion and 21% of GDP.<\/p>\n<p>What Bezos omits to mention is the role of the Fed in both <em>enabling<\/em> the government\u2019s spending problem and turning that spending problem into an inflation problem by covering the resulting deficits with massive money-creation.<\/p>\n<p>The Biden tweet that started this debate may not be as incoherent as it seemed. But the policy it promotes is as wrong-headed as ever.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Taking a page from his rival and fellow space tycoon Elon Musk, Jeff Bezos has been tweeting surprisingly acerbic criticisms of the progressive powers-that-be, precipitating a debate with the Biden<\/p>\n","protected":false},"author":498,"featured_media":2315279,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1485114","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1485114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/498"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1485114"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1485114\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1485114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1485114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1485114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}