I'll be discussing at 8:30 am ET on CNBC's Squawk Box tomorrow
In "The Deficit Myth" you stated that the government borrowing "limit" was roughly defined by the amount that causes inflation not the amount in relation to GDP. Now that inflation is a concern, it's interesting that MMT seems to be saying that the only Fed tool for cooling inflation--raising interest rates--may actually induce a countervailing stimulative "tailwind". Let's suppose this tailwind is strong enough (which I doubt, but this is a thought experiment): what then? If the Fed can't cool off inflation when it happens by raising interest rates, we should avoid the deficits in the first place? Does this mean "The Deficit Myth" isn't a myth after all?
The impacts of President Biden’s fiscal successes should soon be accelerating into view.
Big fiscal works, austerity and massive unemployment don't. Indeed luckily for us, with programs such as the IRA, Chips, infrastructure bill and the crazy regressive stimulus via the fed rate hikes we've held off a recession. It also helped that supply chain pressures improved and a huge drop in gas prices as well. Disinflation is happening even on the core side despite nagging rent and shelter costs. There is no wage price spiral and even real wages are up. The less we pay attention to the likes of summers and furman the better off the economy will be.
I have a dream - as someone once said.
Stephanie would make a great president. Being a Congressional representative for a few terms may be a suitable initial step on that journey? 🙂
The collusion of the Fed with the economic elite tools like those mentioned at Harvard to return the work class into slaves and property renters is obvious to anyone who has any since of economic history. We have situation where current main driver of inflation is housing rents and Fed is making it harder for people to purchase homes. Let's be clear, the current homeless problem in the US is due to the last 50 years of neoliberalism domination of economic policy in the US. Jerome Powell would have been replaced if the Dems would have nominated Sanders. Powell is no friend to the American, in his testimony on inflation to Congress his exchange with Richard Shelby he praised Paul Volcker. He assured Shelby the Fed was prepared to "do whatever it takes!" It was cristal clear the two were referring to getting uppity workers under control, not inflation.
Thanks for updating us on the current inflation status!
Yes, it's just like what we already knew, was a supply problem, not demand problem. The problem is, capital wants higher levels of unemployed workers because their easier to exploit.
It's time for an August update.