>   
>   (email exchange)
>   
>   On Tue, Feb 16, 2010 at 9:18 AM, wrote:
>   
>   A payroll tax holiday would be tantamount to a currency devaluation, no? As Warren’s
>   rightfully described the current US dollar as being merely a tax credit at the end
>   of the day, a reduction in tax burdens will reduce the demand for dollars, all else
>   equal.
>   

Valuation with a floating fx currency is what it can buy, aka the price level. (different with fixed fx/gold standard, etc.)

Anything that is inflationary is ‘devaluing’

Increased demand may or may not be inflationary or even deflationary as the payroll tax holiday reduces costs for business which, in competitive markets, reduces prices.