Comment by cgeier
3 years ago
How does spending a lot of government money make goods and service more expensive?
EDIT: At least here in Western Europe, we mostly have a supply side inflation, because energy got a lot more expensive, not because the government has been "printing" a lot of money. I suspect it's the same in the US.
Yes, inflation is currently a world-wide issue, and explanations at the world level lead somewhat obviously to the pandemic and Russia's invasion of the Ukraine.
But here in the USA, people like to believe it must be political and local, completely unrelated to the totally-coincidental worldwide issue that happens to be very similar.
>But, here in the USA people like to believe it must be political...
Cool, whats your prognoses for effectiveness of the Reduce Inflation Act
I'm in favor of the bill, but the name is stupid, even misleading. The spending is largely good, but it won't have much effect on inflation, if any.
It does not unless that money is spent competing with businesses and citizens for resources. However, in this case the money had already been earmarked for rural internet service and is not being used to purchase goods and services that citizens would be buying instead.
Actually Europe has been printing a lot of money by having less than 0% interest rate for loan. Current inflation is due to many factor, some estimate it has been slowly growing since 2008, plus covid where we printed money to just to keep business alive, plus negative interest rate that allowed countries to loan too much, etc...
But I suspect that subsidies for infrastructure is one of the least impactful factor for inflation.