Effate wrote:
Last few paragraphs of the Morningstar.com article are telling:
“Last but not least, higher government spending has helped to fuel growth. Local, state and federal outlays have risen an average of 4.5% in the past six quarters, almost double the annual average from 2010 to 2019.
The Biden administration has approved hundreds of billions in subsidies for green-energy initiatives and efforts to promote more domestic manufacturing of high-tech products like semiconductors deemed critical to national security.
The surge in spending, especially at the federal level, has pushed U.S. budget deficits to $1 trillion-plus annually and sharply increased interest payments on the national debt.
The bill might come due eventually, economists say, but in the short run, the flush of government spending has given a big shot of adrenalin to the economy.”
The government is borrowing and printing and the people are spending it. “Inflation anyone?”
Last few paragraphs of the Morningstar.com article... (
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That paragraph talks about GDP growth - yes government spending has spurred growth in jobs, wages, etc.
But your equating the Fed. spending that has multiples of itself as ROI are not the causes. There just isn't any statistical evidence that federal spending in general is a major cause of inflation. Growth has put more people to work and has increased wages on the demand side and product and service disruptions on the supply side are the causes of current inflation. In all of the studies performed, the inflationary increases can be tied by percentage points to wages, supply, demand, and documented in the sources provided.
Or, were you speaking about the C***d aid packages? According to economists, any causation from that spending has dissipated.
BLS doesn't even give a mention to government spending as a cause of current inflation.