Posted on 04/09/2022 4:51:20 PM PDT by E. Pluribus Unum
Larry Summers, the Harvard economist and former Treasury Secretary, has been warning about this almost since Joe Biden took his oath of office. Summers believes that massive government pandemic spending — including stimulus checks — has put too much cash into circulation while the pent-up demand from the pandemic isn’t catching up to supply.
Supply chain bottlenecks don’t help. But how bad would they have been if far more modest and targeted pandemic relief had been proposed?
Now we have the war in Ukraine effectively shutting off one-quarter of the world’s supply of grain. Food prices are going to skyrocket, and it’s going to hurt everyone.
But why is it so much worse here?
“Inflation rates in the United States and other developed economies have closely tracked each other historically,” the economists write in an analysis published this week. “However, since the first half of 2021, U.S. inflation has increasingly outpaced inflation in other developed countries. Estimates suggest that fiscal support measures designed to counteract the severity of the pandemic’s economic effect may have contributed to this divergence.”
Inflation in the U.S. hit an annualized rate of 7.9 percent in February (data for March will be released by the Bureau for Labor Statistics next week), a 40-year high. Meanwhile, inflation in similar countries like France (3.6 percent), Germany (5.1 percent), and the United Kingdom (5.5 percent) is significantly lower, according to data from the Organization for Economic Cooperation and Development (OECD), a consortium of 38 rich-world governments. (Across the OECD as a whole, the average annual inflation rate is about the same as the U.S., but that’s due to the influence of outliers like Argentina—where prices are up over 52 percent in the past 12 months.)
(Excerpt) Read more at pjmedia.com ...
Unexpected!
Duh
No way!
How could my missing stimulus check and the wife’s missing one make things worse ??!!
Imagine that. /sarc
Yes, maybe, but I did get a couple new firearms out of the exchange.
How much did they spend on the study? Nothing but busy work for leftist Fed. workers that could have been done as accurately by a High School Economics class.
I want my money!
Worsened?
They triggered it didn’t they?
Yeah, it was those darn stimulus checks and not the shutdowns.
I seem to remember a time not very long ago when the economy was humming like a bee hive. What could have changed?
Hard to believe
In other breaking news, water is wet and fire is hot!
Weelll, DUH.
Of course this is true.
I learned enough economics by the 3rd Grade to explain to anyone how flooding the country with newly printed currency backed by nothing will dilute the value of the currency already in circulation.
You don’t need to be a Phd in economics to recognize that simple fact.
By my reckoning, 10-15 percentage points of inflation were caused by government overreach and "not letting a crisis go to waste."
Well, it was both, if you ask me. More money to spend, less things to spend it on. Even Paul Krugman could have figured this one out.
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