[jerkstate]

Well, the price of goods and services will go up because everybody suddenly has more money and the owners of the businesses that sell those goods and services have just had their taxes doubled, so we're back to square one anyways.

[mmcconnell1618]

Increased demand for some goods will create competition and prices will stay the same or fall. Commodity goods providers don't have pricing power so they can't raise prices without losing sales to competitors. There is also the "menu cost" which is the resistance of businesses to react in real time to economic events. A restaurant won't reprint menus everyday and the $1.99 cleaner won't change prices very often.

In addition. The total money supply isn't growing, it is being redistributed to people more likely to consume. The velocity of money will increase but the total amount won't. This will keep prices relatively stable.

[snarf21]

I worry about this too. Who cares if you have more money if it has less buying power per dollar? This is also why I worry about drastically higher minimum wage. Poor people have more money but all the places they spend it have higher costs that lead to higher prices. Rich people don't spend the majority of their money at Wal-Mart so it affects them less. EITC and other tax reductions on the poor seems more effective and doesn't reduce buying power.

[jpindar]

>Who cares if you have more money if it has less buying power per dollar?

People who are broke care. Some money is always better than no money.

[Vaskivo]

But the wages they pay to workers have gone down.