Quote:
Originally posted by baltassoc
BTW, no one has yet answered my question from a couple of weeks ago as to why one part of the government is trying its hardest (according to its own rhetoric) to stoke the economy by increasing the money supply by reducing taxes (a/k/a "supply side economics") while another part of the government is trying its hardest to control inflation by reducing the money supply by increasing interest rates.
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Difference between fiscal and monetary policy. Fiscal policy is longer run. The theory is that reducing taxes increases long-run economic growth.
Of course, when there are tax cuts without spending cuts, it's inflationary, so we need tighter monetary policy to keep inflation in check (that and Greenspan didn't bother to keep monetary growith reasonable his last few years, but it's not his problem now).
