1. Sort of - the connector between the two is fiscal policy. We had tight fiscal policy in 2008 - that's why we saw no/muted general inflation after the crisis.

1. Sort of - the connector between the two is fiscal policy. We had tight fiscal policy in 2008 - that's why we saw no/muted general inflation after the crisis. We had comparatively loose fiscal in 2020 - hence the inflation now - it's not explained solely by supply chain problems and demand shifts from services to goods (though that's also a significant part of it). Monetary inflation builds the potential for price/goods/CPI inflation - whether than potential is realized depends on fiscal policy and the supply response (more redistribution => more inflation - if productive capacity can't catch up, or if we limit supply - for example ESG / anti-oil stance). 2. Governments employ debt because of the political price of raising taxes. Issuing debt is basically taxing savers via inflation over the medium term - it's more "invisible", since the government will eventually have to devalue or default on its debt in real terms (the U.S. has done it twice in the last century - in 1934 and 1971, and it's possible that a third one is coming in the next decade. It's a little trickier since the currency is no longer gold backed, but it's de-facto oil-backed. If oil goes to $10K / barrel (hypothetically), that's as good as US defaulting on its debt as far as foreign creditors are concerned). 3. True, though there are transparency measures that monitor government spending and we have rough measures of effectiveness. Government is to people what the FED is to banks - the provider of needs of last resort. It might not give you the best service or work efficiently, but it will be there when everything else goes bankrupt or refuses to work. There are things that are unprofitable and unenviable to do in a capitalist system - and we rely on the government to do them.