The Laffer Curve is defined by increasing tax rates creating larger disincentives to do taxable economic activity.  Monetary policy that creates new money by shaving a small amount of value from every existing dollar, devalues the currency. 
The changing value of the currency into something lower (inflation) reduces the savings which is the basis for capital and a necessary ingredient for capitalism.
 

  The changing value of the currency into something higher (deflation), harms long term contracts for labor, because nobody wants to see their earnings in dollars drop over time, even if prices fall also.  The normal, healthy price drops and rises affected by productivity gains is not the subject; this change in currency into something higher (deflation) is simply taking dollars away without taking corresponding assets away at the same time.  When dealing with fiat currency not backed up, the number of dollars has to remain absolutely the same.  

Greater disincentives to trade occurs whenever the value of currency changes. This creates a Laffer Curve. 

 


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05/08/2016 7:01am

The inflation taxes and all increased prices of the products and all motives of the lives of the individuals and all economic affairs re difficult to combine it is the reformed and all suggested things. It is entailed and discussed.

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    Bill Haley

      Bill Haley started Haley2024 in the spring of 2013 in an effort to his part in restoring freedom to America.

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