New Policies to Fight Inflation: Sources of Skepticism

Albert Rees

AR

Albert Rees

Discussants: Daniel J.B. Mitchell and

DJM

Daniel J.B. Mitchell University of California, Los Angeles

Lloyd Ulman

LU

Lloyd Ulman

A NUMBER of proposals for new methods to fight inflation are being opposed, especially by labor organizations and the business community. Included among the old methods to fight inflation are restrictive monetary and fiscal policies, wage and price controls, and exhortation or “jawboning,” all of which have been used in the United States at various times in the past thirty years. Among the new methods are reductions in excise, sales, and payroll taxes; tax-based incomes policies (TIPs); and deregulation, or the elimination of “sacred cows.” This paper explores possible reasons for opposition to these more recent proposals, with major attention devoted to TIPs.