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They're right. Current inflation is not a result net tax of spending policy. Current inflation is the result of sabotaging the supply chain (due to Covid, not s

They're right. Current inflation is not a result net tax of spending policy. Current inflation is the result of sabotaging the supply chain (due to Covid, not saying it wasn't justified) + Russia attacking Ukraine ... That doesn't really change the reaction central banks/MMT/all of finance should have. It doesn't matter what causes inflation to start rising. It only matters that we don't get it feeding back on itself: we must have inflation ... without raises (because demand for goods needs to go down). You're of course right that it'll be politically toxic in the extreme. So they will try everything in their power to avoid doing that.

legitster 5y ago
> current inflation is the result of sabotaging the supply chain This is an often repeated misconception (signal boosted by the White House, no less), but a lot of the purported supply chain disruptions are a result of consumers flat out just consuming more stuff: https://www.businessinsider.com/americans-spending-goods-versus-experiences-supply-chain-crisis-2021-10 https://www.businessinsider.com/americans-spending-goods-ver... A chip shortage can explain the cost of a car going up, and a global war can explain the cost of gas or wheat. But why is the cost of domestic beef going up? Or a cubic yard of soil? The old Monetarist explanation is clearly the right one - there is too much consumer money in the economy. From both stimulus (much of which was initially good), but clearly interest rates have been too low for too long.