Posted by During a regular Democrat press conference on Monday April 25, 2022, Senator Chuck Schumer said this:
“If you want to get rid of inflation, the only way to do it is to get rid of a lot of the Trump tax cuts and to raise rates.”
https://townhall.com/tipsheet/guybenson/2022/04/28/schumer-the-only-way-to-solve-inflation-is-toraise-taxes-n2606460
The context makes it clear that he meant: raise tax rates. In other words, Senator Schumer believes or wants us to believe that inflation can only be reduced by levying more taxes.
Senator Schumer graduated in 1974 from Harvard Law School and immediately became a career politician the very same year. I could find no evidence that he never practiced law or that he ever operated or owned a business. His entire adult life he has been a public “servant”, i.e. his income came from tax money. Apparently, he also never learned even the basics about inflation and the economy.
According to https://wikidob.com/chuck-schumer-net-worth/, the man who wants to raise our taxes has lately purchased a brand-new Ferrari Roma (base model $225,000). He also owns an Audi RS Q8 (base model $121,000). In addition, he owns the following assortment of expensive cars: A Land Rover Defender, an Alfa Romeo Giulia, a Lamborghini Huracán, and a Jaguar XE.
Taxman Schumer lives in a 60-year-old classic dwelling situated in New York City. This property, which he bought for $15 million, is a 9,000 sq. ft. mansion with 7 bedrooms and 10 bathrooms.
The taxman also has an exquisite watch collection. According to Internet sources, he owns a Richard Mille ca. $150,000, a Rolex ca. $130,000, a Jaeger-LeCoultre ca. $30,000, a Piaget ca. $25,000, and a Franck Muller ca. $10,000. Granted, some of them may have been gifts from lobbyists.
It is rather difficult to find out what Mr. Schumer’s net worth is. I checked the following websites: celebritynetworth.com; wealthypersons.com; networthpost.org; opensecrets.org; wikidob.com; networkmask.com; networthlist.org; newsnough.com; wealthygenius.com; and glusea.com and I found radically different net worth numbers for Chuck Schumer, varying between $900,000 and $2.5 billion. Yes billion, not million.
It seems impossible to determine, which of these numbers is correct. Let’s settle on 1.5 billion. In any event, it seems safe to state with that Mr. Schumer is quite well to do and that he lives a life of luxury.
His Senator salary is ca. $174,000 p.a. + fringe benefits. If we assume that he made an average of $150,000 p.a. since 1974 and that he was able to save $20,000 every year, he would have accumulated roughly one million dollars including interest. But with his expensive lifestyle he probably did not.
So, where does this enormous net worth come from? Like with most other members of Congress, it probably comes from insider trading, which unfortunately is still legal for Congresspersons and Senators.
Indeed, his lifestyle speaks loudly and leaves no doubt that Democrat Chuck Schumer is the defender of the little man, the underprivileged, and the disenfranchised.
But does he know what inflation is? In case he does not, let me explain it.
As long as the amount of money circulating in a national economy and the sum total of goods and services produced by it are in relative balance with each other, you have neither inflation nor deflation.
If the amount of money that circulates in a national economy grows but the amount of goods and services the economy produces remains the same or shrinks, you get inflation. The monetary unit (here: The Dollar) loses its value because, unless a currency is based on gold, its value is defined by the total amount of goods and services that could potentially be bought with the money circulating in the economy.
Think of a national economy as a balanced scale. On one side of the scale are the goods and services the economy produces and on the other side of the scale is all the money circulating in the economy. As you increase the amount of money on the money side of the scale, the weight (value) of the currency unit needs to decrease for the scale to remain balanced. A much larger amount of money is now the equivalent of the same or even a reduced amount of goods and services, which means that you need to spend more money (pay higher prices) for the same goods and services. The buying power of the monetary unit has decreased.
At the risk of repeating myself: The US dollar loses buying power as the amount of dollars that circulate in the economy increases, if the amount of goods and services produced by the American economy does not increase at the same rate. The currency also loses buying power, when the money in circulation remains the same but the total of goods and services shrinks.
There is only one legal way how the amount of money in circulation can increase: if the Federal Government prints it or mints it. Borrowing money does not increase the amount of money in circulation, but it can nonetheless accelerate inflation, because borrowed money is money you spend and do not have. Money that should be there but isn’t. Sort of borrowed inflation.
If the total amount of currency in a national economy keeps increasing while the total amount of goods and services in the same economy stagnates or shrinks, the inevitable result is inflation, which is essentially a loss of buying power, which manifests itself in higher prices, higher interest rates, and potentially also higher incomes. However, incomes typically do not increase with the same speed at which prices increase. Rising prices, interest rates, and incomes require that even more money be put into the economy, which further promotes inflation. Excessive public spending will eventually also lead to inflation, if it is financed by the printing press. Ultimately, this becomes a vicious circle that leads to recession, depression, and ultimately economic collapse.
Printing money is the task of the Federal Reserve Bank. In 2020, it printed in excess of 3 trillion dollars in less than 3.5 months with near zero economic growth. Inflation is currently increasing at an annual rate of 7.5%. If this trend continues, working people will have lost 50% of their buying power (net income) due to higher prices in about 6 years from now. Ouch!
The situation is further complicated by the circumstance that the US Dollar is also the world reserve currency, which makes it necessary or possible – depending on your viewpoint – that much more money must be printed and circulated by the Federal Reserve Bank than would be necessary to solely serve the needs of the US national economy. As long as world trade flourishes and other nations use the US Dollar in their international trade transactions in a significant way, there should be no problem. But if international trade slackens – as it currently does – or if other major nations refuse to use the Dollar for their trade transactions, the excess amount of dollars in the world market system can have the same inflationary effect as too much money circulating in our national economy.
Due to inflation, our disposable incomes will shrink dramatically and on top of this, Chuck Schumer wants to administer higher taxes to reduce inflation.
Now then, what are taxes?
Taxes are essentially a form of legalized theft. The government takes away a portion of the citizens’ earned income and spends it on public projects, government bureaucracy, and social entitlement programs. Essentially, this is a redistribution of wealth policy. Once the government has taken possession of the citizens’ money, it become difficult if not impossible for the citizens to control what the money is spent for.
In medieval Europe, the noble class levied 10% taxes off the peasant class. This tax was called the “tithe”. When the Noblemen attempted to increase this tax, a peasant war broke out in 1524. Today we are taxed 3-4 times this much by our democratic government in our own name and no tax-payer war has broken out – yet.
Taxes may do lots of things, but they do not decrease inflation, as Chuck Schumer asserts. That is because taxes are money taken away from those who earned it. However, taxes do not reduce or increase the amount of currency that circulates in an economy. Unless one considers the unlikely case that the government would collect taxes and then destroy the funds it collected.
Contrary to what Ms. Pelosi thinks, who also probably failed Economy 101, taxes do not stimulate the economy. They cannot possibly, because they simply take away buying power from one group of people (the earners) and redistributes it to another group of people (the beneficiaries) who did not earn it. Whether a buck is spent by the person who earned it or by the person to whom it is redistributed makes zero difference for the economic conjuncture.
Democrats claim that the Trump tax cuts benefited mainly the rich. An analysis from the Heartland Institute explains:
“The available evidence is clear: Based on tax data from 2017 and 2018, the Tax Cuts and Jobs Act reduced taxes for the vast majority of filers, led to substantial improvements in upward economic mobility, and disproportionately benefited working- and middle-class households, many of which experienced tax cuts topping 18 percent to 20 percent,”
Raising tax rates, i.e. taxing working people more, will only further increase the burden on the productive part of the population, in particular on the middle class, which already carries the heaviest tax load, further exacerbating their already dire economic situation. Talk about adding insult to injury.
It is so obvious and unquestionable that raising taxes does nothing to mitigate inflation but a lot to ruin the lives of many people who are already pushed toward poverty by rising food and gas prices, and unaffordable cost of construction material, and cars that the question must be asked if Mr. Schumer really believes this nonsense. If he does, we face the shocking truth that we are governed by a fool. If he does not, we face the shocking truth that we are governed by a crook.
Here is a brief story from my personal experience with Chuck Schumer that may help you decide whether he is a crook or a fool.
In 1989, when the Bush administration slapped an import ban on so-called “assault rifles”, I was the CEO of Heckler & Koch, Inc., which imported the HK 93 and HK 91, both semiautomatic or autoloading versions of the G-3, the standard assault rifle of the German Bundeswehr. Since neither the HK 91 nor the HK 93 was an “assault rifle” i.e. a rifle capable of firing in fully auto mode, I asked to be allowed to testify in a hearing that was held by Chuck Schumer about the assault rifle import ban. I put together a short but concise briefing about the difference between semiautomatic and fully automatic rifles, arguing that neither the HK 91 nor the HH 93 should be banned because they were not “assault rifles”.
When I arrived at the meeting room, Chuck Schumer was presiding. The meeting went on for a while until Mr. Schumer finally recognized me and asked me to present my briefing. I got about four sentences out before Mr. Schumer interrupted me rudely saying: “Mr. Deltgen, I am not here to be educated about the differences between semiauto and fully auto rifles. I am here to ban firearms.” Dismissed.
Maybe Mr. Schumer is not interested in understanding the relation between inflation and taxation either. Maybe he just wants to destroy our market economy and our social fabric and pave the way for Klaus Schwab’s Great Reset and the New World Order?
Crook or fool?
You decide.