Letter: Economics 101: Inflation is caused by too much money chasing too few goods
Gerald B. Jacobs of Moorhead writes, "Putting more money in people's pockets through tax cuts will help pay the bills, but it won’t decrease inflation pressure — unless they don’t spend it!"
Although both candidates for Minnesota Senate District 4, Republican Dan Bohmer and Democrat Rob Kupec, see inflation as a top problem, both support tax cuts. Bohmer lists “middle class cuts” as a part of his plan to fight inflation. Kupec supports eliminating the state tax on Social Security (Minnesota is only one of 11 states which tax Social Security), bringing Minnesota in line with 39 other states and the District of Columbia. Putting more money in people's pockets through tax cuts will help pay the bills, but it won’t decrease inflation pressure — unless they don’t spend it!
Inflation is being experienced worldwide, driven by disrupted supply chains as a result of COVID-19, the war in Ukraine and other events beyond the purview of Minnesota state senators. Let us hope these and other elected officials understand, and help others understand, the complexities of this rapidly changing economic environment.
Gerald B. Jacobs lives in Moorhead.
This letter does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.