The price we pay

The second key failure also belongs to the administration’s early days. In February 2021, when congressional Democrats were preparing a $1.9 trillion stimulus, a group of Republican senators counteroffered with a roughly $600 billion proposal. Flush with overconfidence, the White House spurned the offer and pushed three times as much money into the economy on a party-line vote.

What followed was what a few dissenting center-left economists, led by Larry Summers, had predicted: the worst acceleration of inflation in decades, almost certainly exacerbated by the sheer scale of the relief bill. Whereas had Biden taken the Republicans up on their proposal or even simply counteroffered and begun negotiations, he could have started his administration off on the bipartisan footing his campaign had promised while‌ hedging against the inflationary dangers that ultimately arrived.

By Ross Douthat
Opinion Columnist, NYT 10-22-22

Was there ever any doubt that deficit funded over spending by government leads to inflation, that ultimately if you spend money you don’t have, the actual cost is much higher?

Politicians take action to make themselves attractive to voters or motivated by naive, shortsighted thinking that ignores consequences. Right now the political left is in charge, but the far right does the same.

The losers are average citizens, the very people extreme politics claims to be serving.


  1. All of this government debt will not end well. As the FED raises interest rates even more, the government will have to pay more in interest. Resulting in even more government debt, just to pay the interest. Higher borrowing costs for everyone, will push us into recession. Some prices will come down, great for many on a fixed income, not so great for the millions of workers who lose their jobs.


    1. The Covid-19 Pandemic Has Added $19.5 Trillion to Global Debt (as of Jan 2021) according to Bloomberg. The US was not the only country borrowing heavily. The US continued to borrow during 2021.

      Add the 2022 energy crisis due to the war in Europe and inflation took off. High energy prices causes costs for everything else to go up because it is the raw material in plastics and chemical to adds transportation costs of everything else.

      The devaluing of various world currencies from heavy borrowing causes the cost of oil to go up too adding to inflationary pressures.


  2. I think you mention it a week or so ago, but this is what MMT did.
    If MMT is so great, how come just printing more money doesn’t solve the inflation crisis it helped to cause?


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