Tax evasion, austerity, and loose monetary policy mutually reinforce each other

Evidence

At one end, tax evasion and cash hoarding have left US companies – particularly tech companies – with a vast amount of money to invest. This glut of corporate savings has – both directly and indirectly – combined with a loose monetary policy to strengthen the pursuit of riskier investments for the sake of a decent return. At the other end, tax evasion is, by definition, a drain on government revenues and therefore has exacerbated austerity. The vast amount of tax money that goes missing in tax havens must be made up elsewhere. The result is further limitations on fiscal stimulus and a greater need for unorthodox monetary policies. Tax evasion, austerity, and extraordinary monetary policies are all mutually reinforcing. — Nick Srnicek, Platform Capitalism, 38

Categorization

• DEEPTHINKING: A dense systemic loop: tech cash hoards feed the risky-investment economy, starve public revenue, force austerity, which forces more monetary looseness, which pushes more capital into the same channels. The mutual-reinforcement claim integrates the whole chapter.
• XREF: connects to: Austerity stems from societies unable to agree on tax distribution — Mark Blyth, Austerity: The History of a Dangerous…, 623; Inflation acts as a class-specific tax benefiting debtors over creditors — Mark Blyth, Austerity: The History of a Dangerous…, 46; Interest-rate meddling had far-reaching harmful effects on the business cycle — Angus Burgin, The Great Persuasion: Reinventing Free…, 62 (+4 more)

Related

• Monetary and fiscal austerity reinforce each other reciprocally (similarity 0.81)
• Regressive taxation and spending cuts serve the same class-confiscating function (similarity 0.79)

Broader Connections

• Monetary and fiscal austerity reinforce each other reciprocally #expands (0.95) — Clara E. Mattei, The Capital Order, 773
• Fiscal and monetary austerity jointly transfer capital accumulation costs onto working classes #qualifies (0.85) — Clara E. Mattei, The Capital Order, 774