Only Ideologues Downplay Inflation

Thru the Cycle Market Outlook ^ | John Lonski

[karpov]

The US labor market is hardly in need of additional fiscal stimulus. November 20’s initial state unemployment claims dipped under 200,000 for the first time since November 1969. One cannot help but note that the inflationary 1970s were just around the corner.

Because labor markets have already tightened by enough to accelerate wages, additional government spending will stoke price inflation. Wages and prices can only rise more quickly when the government adds to the bidding for labor, materials, energy, and land.

All too often overlooked is how the proposed expansion of the federal government will add to federal spending exactly when the rapid aging of the US population will necessitate large increases in federal outlays on social security and Medicare.

Today’s proposed spending programs bring back memories of LBJ’s “War on Poverty” that helped to set the stage for the persistently rapid inflation of the 1970s. Despite that noble endeavor, not only are the poor still with us, but today’s count of the underprivileged would be significantly lower if the private sector had a greater role at eradicating poverty.

Economists who claim that the forthcoming and proposed expansion of the federal government will not add to price inflation cite the post-World War II years as an example of how the release of pent-up demand did not trigger a prolonged stay by rapid price growth. Nevertheless, the annual rate of CPI price inflation averaged around 10% during 1946-1948. Thus, some have the audacity to deem a three-year stay by rapid price inflation as being temporary.

Though the average annual rate of CPI inflation slowed to 3% during 1949-1951, 1949’s recession did much to decelerate price growth. Do not be surprised if the current episode of rapid price inflation persists until the next recession.

[karpov]

Lonski was formerly an economist at Moody's, a big bond rating firm.

[gov_bean_ counter]

Misspelled idiot.

[immadashell]

Both Moody's and S&P failed to recognize the dangers of sub-prime mortgage lending 15 years ago which precipitated the 2007, 2008 housing crash.

[Dick Bachert]

STILL CONFUSED ABOUT THE PROCESS & SOURCE
OF THE INFLATION COSTING US MORE “MONEY” AND, ULTIMATELY, FREEDOMS EVERY MONTH?
THIS VIDEO MAY HELP.
(2 LINKS)
https://www.brighteon.com/dd2435a2-f586-438b-86a3-6792cb28e99f
https://www.bitchute.com/video/J25K2rZWPuSr/