In truth, we don't have a very good picture of how to model the inflationary effects of BIG, except by crudely analogizing one demand increase with another. IMH

In truth, we don't have a very good picture of how to model the inflationary effects of BIG, except by crudely analogizing one demand increase with another. IMHO the main thing to keep in mind is who immediately gets money as a direct consequence of a policy change, what they feel obligated to do with it, and how that might turn into a bottleneck later. Traditionally when money is "pumped into" a economy, it's via lending to banks(producing a "multiplier" effect). That money lands in the hands of the biggest capital-holders first - big businesses, investment firms, etc., so it acts to stimulate supply more than demand. The hope is that firms will see the easy money as a signal to expand their operations and take on bigger projects. If it doesn't work - and efforts like QE have basically stopped working - all you're going to get is greater inequality of wealth, as the money stops being put to use and feeds itself back into the capital markets. And when we stimulate demand in the fashion done in the post-war era, with a huge expansion of government spending, the money is mostly landing on people building war machines and associated technologies. People are being employed and paid, but they're locked into employment of a certain nature which isn't directed at consumers - so more money is chasing a broadly similar basket of goods. The late 60's and 70's saw rapid inflation, and the technical advances and new markets that opened up from that period to today are pretty much all rooted in that early investment in military R&D. On the other hand, when you have money land directly into the hands of consumers, that money is only skewed by cultural values. They could go Kickstart some wacky project. They could push for higher quality goods. They could pay off debts, change residences, and go back to school. Consumers aren't purely profit-seeking or utilitarian - how the macro situation would change is one huge unknown, but the main point of appeal is that it would be a very fluid kind of demand, and if consumers start disliking their ROI in one category, they can smoothly transition to something else - which means the traps and bottlenecks of other policy changes may not apply.