So you thought the “Crowding Out Effect” and “Phillips Curve” Were Long Gone

Substack ^ | August 9, 2023 | John Lonski

[karpov]

The Great Recession was largely the consequence of too much household debt. The next recession will probably be viewed as the offshoot of excessive US government indebtedness.

It is not beyond the realm of a possibility that the nearly $1 trillion of US government borrowing expected for the current quarter may push Treasury bond yields up to heights that roil financial markets and curb private-sector spending. If the “crowding out effect” were to return, the political opposition to increased federal spending and more regulations will be mighty enough to force Washington into reversing course.

Could it be that whoever is running the federal government may have to re-think the Chips Act, the Inflation Reduction Act, and social security? Perhaps Washington has overextended itself with prospective subsidies for the domestic manufacture of micro-chips, green energy, and electric vehicles? Also, let us not overlook the many federal regulations that will follow from forthcoming subsidies.

[RushIsMyTeddyBear]

Bkmrk

[griswold3]

Dems are daring Reps to shut down the government There is no comity on budget negotiations. Whatever happens will be the Rs fault of course
Voters are really that stupid.

[sauropod]

review

[Robert A Cook PE]

“Perhaps” ?

Nay, nay. It is deliberate.