There are already articles on the internet quoting investment “experts” saying that Trump will cut taxes and that tax cuts will be “inflationary.”  That implies that tax increases should be deflationary.  Let’s try to figure out how that works.  This is classic Keynesian demand-side thinking, so the argument is that taking say, a billion dollars out of the bank accounts of taxpayers and giving it to government bureaucrats to spend instead will cause deflation even though the amount of total spending is exactly the same.  What is different is WHO is doing the spending, in this case government bureaucrats instead of citizens who earned the money in the first place.  Standard Keynesian superstition holds that “aggregate demand” must increase if the price level is to increase (or be higher than it otherwise would have been), but in this case it is not higher but the same.

I’m beginning to doubt these claims that keeping more of your own hard-earned money harms all of society by causing price inflation and that handing over more of your hard-earned money to politicians and bureaucrats always benefits “society.”

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