Friday , June 25 2021
Home / Mike Norman Economics / Inflation Myths and the US Economic Rebound 2021 — Jack Rasmus

Inflation Myths and the US Economic Rebound 2021 — Jack Rasmus

Summary:
Republicans, conservatives, and business interests are using the fact of recent rising prices to attack legislative proposals to increase government spending. They argue the recently passed .8 trillion ‘American Rescue Plan’ (Covid Relief Plan) by the Biden administration was too generous. And proposals to spend on Infrastructure (.2T) and American Families (.5T) will only stoke consumer spending and boost inflation further.They and their mainstream media friends are arguing that fiscal stimulus putting money in the hands of households is driving up prices. In other words, consumer DEMAND is now causing prices to rise sharply, they argue.But is it? Or is the problem of rising inflation a business SUPPLY problem?...Demand remains rather weak judging by the trend of retail sales. In

Topics:
Mike Norman considers the following as important:

This could be interesting, too:

Cullen Roche writes Does a 100 Vol Asset Belong in Retirement Accounts?

run75441 writes A “Summer Rerun – The Victory of Privilege”

Lars Pålsson Syll writes ‘New Keynesian’ macroeconomics — worse than useless

Sandwichman writes I am invisible

Republicans, conservatives, and business interests are using the fact of recent rising prices to attack legislative proposals to increase government spending. They argue the recently passed $1.8 trillion ‘American Rescue Plan’ (Covid Relief Plan) by the Biden administration was too generous. And proposals to spend on Infrastructure ($2.2T) and American Families ($1.5T) will only stoke consumer spending and boost inflation further.

They and their mainstream media friends are arguing that fiscal stimulus putting money in the hands of households is driving up prices. In other words, consumer DEMAND is now causing prices to rise sharply, they argue.

But is it? Or is the problem of rising inflation a business SUPPLY problem?...

Demand remains rather weak judging by the trend of retail sales. In addition, the saving rate is still elevated. Prices rises can be traced to supply shortages owing to the effects of the pandemic, e.g., on employment as well as bottlenecks, e.g, semiconductors are affecting new car production.

Jack Rasmus
Inflation Myths and the US Economic Rebound 2021
Jack Rasmus, professor of political economy, St. Mary’s College, Moraga, California
Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

Leave a Reply

Your email address will not be published. Required fields are marked *