piquant wrote: ↑Tue Apr 06, 2021 1:09 am
There are some fair concerns that Biden is opting to take on several new mountains of debt, but those are conceptual concerns, nobody actually knows when problems will kick in, and if there are going to be problems faced by governments following such calls the USA is best placed to avoid some of the kickings that might follow on
The era of MMT is quite interesting. Looking at the debt taken on by developed nations, alongside the large amounts of QT, there should be effects in the system. However, inflation remains low (outside of Japan who successfully devalued). Is argue that increased government debt will be a slow burn issue, draining future abilities to invest due to increased interest payments. Not an issue if the debt provides infrastructure for growth (not certain it does though.
The bigger concern for me is the QT, which idiots and nutters the world round are using to justify magic money trees with zero inflationary consequences. The key forgotten is here is that our modern economy is very complex, and the QT needn't enter M1, or 2.
So where does this inflationary pressure go? Just look at the stock market. And when boomers die and pass on their wealth, broke millennials will spend it all in the real economy. This for me is the key economic worry for Biden. But I feel the policies to prevent it will prove too unpopular and the can will be kicked. Due he'll be dead as soon as that bird comes home to roost.