Tag Archives: Inflation

News

Democrat senator Barbara Boxer introduces carbon tax legislation

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From CNS News.

Excerpt:

Today, Sen. Barbara Boxer (D-CA) introduced a bill to levy a carbon tax. But, back on Nov. 15 of last year, Pres. Obama’s press secretary promised the administration would “never” do so.

According to Reuters, the new tax law “would set a $20 tax for each ton of carbon dioxide equivalent a polluter would emit beyond a set limit, which would rise 5.6 percent annually over a 10-year period.”

Last November, however, White House Press Secretary Jay Carney told reporters that would never happen:

“We would never propose a carbon tax, and have no intention of proposing one.  The point the President was making is that our focus right now is the same as the American people’s focus, which is on the need to extend economic growth, expand job creation.  And task number one is dealing with these deadlines that pose real challenges to our economy, as he talked about yesterday.”

“A carbon tax will skyrocket [the] price of everything,” a statement from Sen. David Vitter (R-LA), a member of the Senate Environment and Public Works Committee, warned today:

“It’s not just energy prices that would skyrocket from a carbon tax, the cost of nearly everything built in America would go up.”

The cost of everything is already going up because of inflation. This carbon tax is just going to make it worse, especially for the poor.

News

Socialist Argentina follows-up runaway inflation with price controls on groceries

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Take a look at this article from the leftist Washington Post, which reports on how the socialists in Argentina have imposed price controls in order to minimize the impact of runaway inflation caused by money printing.

Excerpt:

Argentina announced a two-month price freeze on supermarket products Monday in an effort to stop spiraling inflation.

The price freeze applies to every product in all of the nation’s largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies’ trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government’s news agency Telam reported.

[…]Economist Soledad Perez Duhalde of the abeceb.com consulting firm predicted on Monday that the price freeze will have only a very short term effect, and noted that similar moves in Argentina had failed to control inflation. Consumers shouldn’t be surprised if the supermarkets are slow to restock their shelves and offer fewer products for sale, she added.

A more effective way to contain inflation would be to “reduce government spending, which is financing an expansion of the money supply, and to have a credible price index.”

Isn’t ironic that the United States is pursuing the exact same policy of printing money and overspending as Argentina has? Excerpt we are a little further along.

So what happens next in Argentina? Zero Hedge explains:

What consumers will certainly do is scramble into local stores to take advantage of artificially-controlled prices knowing very well they have two short months to stock up on perishable goods at today’s prices, before the country’s inflation comes soaring back, only this time many of the local stores will not be around as their profit margins implode and as owners, especially of foreign-based chains, make the prudent decision to get out of Dodge while the getting’s good and before the next steps, including such measures as nationalization, in the escalation into a full out hyperinflationary collapse, are taken by Argentina’s female ruler.

[…]So to summarize: first capital controls, then a currency crisis, then expectations of sovereign default, then a rise in military tensions, and finally – price controls, after which all out chaos usually follows.

Study this sequence well: it is coming to every “developed” country near you in the months and years ahead.

Just to be clear, price controls are a clear signal to suppliers to stop supplying, since they cannot make any money if prices are held low by government decree. Price controls lead to shortages, necessarily.  And that’s what’s in store for Argentina once the private sector food suppliers (and other companies) pull out of there when they can’t make a profit. There are other places they need to be.

Imagine if America elected a charismatic, incompetent fool to run our country like socialist dictators do in Argentina or Venezuela. Imagine if the mainstream media, with their non-quantitative degrees and lack of real-world experience, covered for his every blunder. Where would we be then?

News

Obamacare’s new tax on medical devices trickles down to hospitals and patients

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From the Wall Street Journal.

Excerpt:

Small medical-device makers have little choice but to pass their new 2.3% excise tax— meant to pay for the health law —on to hospitals and other customers, said the chief executive of one manufacturer that began surcharging hospitals for its wares on Jan. 1.

“The government thinks we’re just going to absorb these costs, but for a company like us, it’s a lot of money,” said Kevin Rudolph, the chief executive of the family-run respiratory valve maker, Hans Rudolph Inc. Instead, he said, device makers will be raising prices or adding surcharges to bills— just like other companies that faced excise taxes in the past.

In a December letter to several thousand hospital customers, Mr. Rudolph told hospitals his company would add a new line item for the tax beginning on Jan. 1. Hospitals and group-purchasing organizations began protesting last week as similar warnings from other device makers began piling up, the Wall Street Journal reported Saturday.

The tax is meant to raise $30 billion to help cover the health law. The device industry has lobbied to repeal the tax, which applies to sales, rather than profits. The recent clashes between hospitals and device makers underscores the breadth of the tax: It applies to companies that make big ticket items such as pacemakers and hip implants, as well as smaller firms selling surgical tools or making the plastic tubes, clips and valves that are ubiquitous in hospitals and nursing homes.

Mr. Rudolph said his firm had opted to tell hospitals upfront they’d be charged for the tax, rather than sneaking it into price increases. “I think it’s better for the customer to know what’s going on, even if they don’t like it,” he said Monday.

Hans Rudolph Inc. typically makes a 4% to 6% profit on about $5 million to $6 million in annual sales, Mr. Rudolph said. The 53-year-old Shawnee, Kan., company was founded by Mr. Rudolph’s father, and grandfather, Hans. The two elder Rudolphs built the company out of a Kansas City, Mo., basement, where Hans devised several respiratory devices. Key products still include spirometry components, for the common breath test in which patients are asked to exhale into plastic tubes.

Though the company has done well, Mr. Rudolph said, it can’t afford the tax. “We just like people to understand that the government is imposing this tax on us, so the cost of medical devices is going up,” he said.

I think that the lesson to learn here is that big government socialism doesn’t reduce the cost of anything by raising taxes on job creators. Those anti-business taxes just get passed onto consumers. In some cases, the business moves abroad or at least expands abroad, instead of staying in high tax environments. There was a plan put forward by the Republicans to reduce the costs of health care by introducing free market forces of choice and competition. Free market forces reduce the costs of all our other consumer goods, while improving the quality. Just think of computers and cell phones that are always getting better for less money. But Americans rejected that plan for Obama’s big government plan. We thought we would escape the costs of health care by taxing and regulating the providers of health care. But we were wrong. In the end, we’ll pay for it.

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