The US is experiencing the strongest price pressures in 40 years. Financial and economic commentators are searching frantically for the culprit. Many on the right blame massive budget deficits. Are government budget deficits responsible for inflation?
The logic is simple: when governments run deficits, they inject purchasing power into the economy. This stimulates total spending on goods and services, what economists call “aggregate demand.” When aggregate demand rises, production and prices go up. The result is more stuff selling at higher prices.
But there’s a problem here. If you blame fiscal policy for rising prices, you also have to credit it for increased output. You can’t have one without the other. Since conservatives sometimes argue both sides—deficits aren’t responsible for the economic recovery, but are responsible for rising inflation—we need to clear up this misunderstanding.
Over at National Review, Douglas Carr summarizes the conventional wisdom on deficits and inflation: “The correlation between government deficits and inflation has been zero since the mid 1990’s.” But then he attributes inflation to deficits in our post-Covid, inventory-constrained environment. To make sense of this in the workhorse model of applied macroeconomics, we’d say production bottlenecks and inventory drains resulted in significant short-run supply inelasticities. That’s econ-jargon for acknowledging output and prices go up following aggregate demand stimulus, with the caveat that the effect on output is minimal while the effect on prices is significant.
I certainly believe supply-side problems contribute to ongoing inflation. But those supply difficulties matter independently of deficits. The hard-won knowledge of the economics profession is that fiscal policy isn’t very effective at boosting output and prices. We don’t need to make an exception in this case. Government budget deficits are good at shuffling resources around, changing the composition of aggregate demand. They’re not so good at raising aggregate demand as a whole. That’s why supply inelasticities don’t explain why deficits are causing inflation. You still need to make an argument for why aggregate demand expands in the first place to confront those inelasticities. Instead, it makes more sense to explain current inflation by some combination of monetary policy and supply chain problems. How you analyze the particulars of the situation determines the weight you place on each.
If the macroeconomic effects of deficits aren’t very big, do we need to worry about them? While deficits are largely a red herring when it comes to stabilization policy, they matter a great deal for political-economic viability. When the government appropriates a larger share of the economy’s output, it diverts resources from the for-profit sector to the not-for-profit sector. Since the incentives are much stronger for stewardship in the for-profit sector, we should worry about public sector waste, whatever the effects on the national income statistics.
Furthermore, deficits create political conflict. Government spending creates an immediate group of beneficiaries. In contrast, who bears the costs doesn’t get sorted out until later. At some point in the future, taxes will have to increase or spending will have to decrease to pay for today’s borrowing. But the rough-and-tumble melee of partisan politics will determine who ultimately bears the cost of today’s borrowing. The larger the debt, the greater the political stakes. And high-stakes politics makes for an unstable country full of cranky, suspicious citizens.
If we want to argue deficits matter more conventionally, we’ll have to do some more theoretical heavy lifting. The usual aggregate demand stories we tell don’t cut it.
Image by Oleg Gamulinskiy from Pixabay. Article cross-posted from AIER.
Big Pharma’s Five Major Minions that Everyone, Vaxxed or Unvaxxed, Must Oppose
This is not an “anti-vaxxer” article, per se. It’s a call for everyone to wake up to the nefarious motives behind vaccine mandates, booster shots, and condemnation of freedom.
The worst kept secret in world history SHOULD be that the unquenchable push for universal vaccinations against Covid-19 has little if anything to do with healthcare and everything to do with Big Pharma’s influence over the narrative. Unfortunately, that secret has stayed firmly hidden from the vast majority of people because of the five major minions working on behalf of Big Pharma.
What’s even worse is the fact that Big Pharma’s greed is merely a smokescreen to hide an even darker secret. We’ll tackle that later. First, let’s look at the public-facing ringleaders behind the vaccine push, namely Big Pharma. But before we get into their five major minions, it’s important to understand one thing. This is NOT just an article that speaks to the unvaccinated. Even those who believe in the safety and effectiveness of the vaccines must be made aware of agenda that’s at play.
Let’s start with some facts. The unvaccinated do NOT spread Covid-19 more rampantly than the vaccinated. Even Anthony Fauci acknowledged the viral load present in vaccinated people is just as high as in the unvaccinated. This fact alone should demolish the vaccine mandates as it demonstrates they have absolutely no effect on the spread of the disease. But wait! There’s definitely more.
This unhinged push to vaccinate everyone defies science. Those with natural immunity may actually have their stronger defenses against Covid-19 hampered by the introduction of the injections which fool the body into creating less-effective antibodies. Moreover, the push to vaccinate young people is completely bonkers. The recovery rate for those under the age of 20 is astronomical. Children neither contract, spread, nor succumb to Covid-19 in a statistically meaningful way. What they DO succumb to more often than Covid-19 are the adverse reactions to the vaccines, particularly boys.
All of this is known and accepted by the medical community, yet most Americans are still following the vaccinate-everybody script. It requires pure cognitive dissonance and an overabundant need for confirmation bias to make doctors and scientists willingly go along with the program. Yet, here we are and that should tell you something.
Before I get to the five major minions of of Big Pharma, I must make the plea for help. Between cancel culture, lockdowns, and diminishing ad revenue, we need financial assistance in order to continue to spread the truth. We ask all who have the means, please donate through our GivingFuel page or via PayPal. Your generosity is what keeps these sites running and allows us to expand our reach so the truth can get to the masses. We’ve had great success in growing but we know we can do more with your assistance.
Who does Big Pharma control? It starts with the obvious people, the ones who most Americans believe are actually behind this push. Our governments at all levels as well as governments around the world are not working with Big Pharma. They are working for Big Pharma. Some are proactive as direct recipients of cash. Others may oppose Big Pharma in spirit but would never speak out because they know anyone who does has no future in DC.
This may come as a shock to some, but it’s Big Pharma that drives the narrative and sets the agenda for the “experts” at the CDC, FDA, WHO, NIH, NIAID, and even non-medical government organizations.
Most believe it’s the other way around. They think that Big Pharma is beholden to the FDA for approval, but that’s not exactly the case. They need approval for a majority of their projects, but when it comes to the important ones such as the Covid injections, Big Pharma is calling the shots. They have the right people in the right places to push their machinations forward.
That’s not to say that everyone at the FDA is in on it. Big Pharma only needs a handful of friendlies planted in leadership in order to have their big wishes met. We have seen people quitting the FDA in recent weeks for this very reason. The same can be said about the other three- and five-letter agencies. Too many people in leadership have been bribed, bullied, or blackmailed into becoming occasional shills for the various Big Pharma corporations. Some have even been directly planted by Big Pharma. That’s the politics of healthcare and science that drives such things as Covid-19 “vaccines.”
Read the rest of this story, but please be sure to donate first if you can.
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