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Musk, one of the worlds top three billionaires, called inflation a form of taxation from government spending.
Both Trump andDemocratic presidential candidate Kamala Harrishave focused on reducing inflation as part of their campaign promises.
But will it work?
What Causes Inflation?
First, lets explore the causes of inflation.
The price of goods rises if demand increases or supply diminishes.
During the pandemic, the government delivered stimulus checks and increased tax credits for many Americans.
This sparked increased spending.
At the same time, the war in the Ukraine increased oil prices, which also contributed to inflation.
And, as Musk pointed out, government spending also contributes to inflation.
So if the government spends far more than it brings in, that increases the money supply.
And if the money supply increases faster than the rate ofgoods and services, thats inflation.
Can Trump End Inflation?
That could help reduce inflation, but at a high cost to the environment.
Its unlikely that lower taxes will stop inflation as it could spark more spending.
It would also increase the government deficit, which could increase inflation.
However, it could also strengthen theU.S.
economyby creating more jobs and increasing salaries at every level.
Reducing Government Spending
Theres one thingTrump and Musksuggested that could help curb inflation: reduce government spending.
In the conversation, Trump pointed out how he negotiated a lower price for Air Force One.
As president, Trump could find additional opportunities to reduce costs without cutting programs.
The federal government is bloated with overlapping agencies and redundant programs.
Can Any President Control Inflation?
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