3 ms·
Thank you very much. This is precisely conversation we need to have. Exhibit A: Obama boom we hit 10% GDP deficits, the biggest since WWII resulting in no infla
by bubbleRefuge 8y ago
Thank you very much. This is precisely conversation we need to have. Exhibit A: Obama boom we hit 10% GDP deficits, the biggest since WWII resulting in no inflation and in fact slight deflation and GDP never averaged above 3% annually. Exhibit B: WWII, we hit around 22% GDP deficits. Full employment ( with a very high labor participation rate [rosy the rivoter, etc]) no hyperinflation and probably not much inflation.
- danieltillett 8y agoThe Obama boom was during the worst recession since the Great Depression so there was plenty of slack in the economy to absorb money creation. WW2 is more complicated as there were price controls and rationing in place to prevent inflation. it is unlikely that you could impose such controls outside of a total war situation. All the historical examples of hyperinflation have occurred when governments have printed far more currrency than they have raised in tax or via the debt market. Spending tens trillions dollars more than you raise in taxes is likely to end in tears.