Policy Today

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Inflation is Bad, but Borrowing $31 Trillion is Worse

2 July 2021 (Economy)
Lone Ranger cartoon from Mad Magazine (1958).  Indians all around us!  Tonto, ol' kimosavee, it looks like we're finished!
Source: Mad Magazine (1958)

The Administration recently released its 2021 budget. Congress has yet to weigh in, but the proposed $6 trillion in government spending will raise the national debt to $31 trillion. This financial tsunami will be partially paid for with higher taxes on the wealthy and corporations. Those hurt by the pandemic will be helped, employment increased, and GDP revised upward.

Or not. There’s another factor that has been largely ignored: the US money supply continues to skyrocket at historic rates—just under 40 percent (YOY) in January and February 2021. One economist noted, “nothing like this has ever happened before.”

Treasury Secretary Yellen has told us “there’s nothing to worry about,” but clearly something is amiss: we’re already seeing soaring home prices; shortages in construction materials and semiconductor chips; and skilled labor despite widespread unemployment. Airlines and gas stations have jacked up fares and pump prices.

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Welcome to Policy Today

“Governments Like Clocks, Go From the Motion Men Give Them”

— William Penn, pre-digital 1700s

4 July, 2021 (Publisher's Letter)

Policy Today is back. We launched the magazine in the summer, 2004, when President George Bush was seeking his second term; and published our last edition in July, 2008, when Hillary Clinton and Barack Obama were battling for the Democratic presidential nomination; and John McCain arose from the pack to win the Republican nomination. The country wasn’t as politically divided as we are now, and PT did its best to focus on the issues as they presented themselves.

Our first issue noted that “governments like clocks go from the motion men give them.” In a time far removed from today’s digital world, William Penn and the country’s early leaders realized that no matter now carefully they balanced competing interests within the Constitutional framework, their success depended upon the officials chosen to lead the new Nation.

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Vintage Interviews

Kevin McCarthy (then, CA Assemblyman, now Minority Leader, US House of Representatives);

Nancy Pelosi (then, Minority Leader, US House of Representatives, now Speaker of the House);

Arnold Schwarzenegger (then CA Governor, now back in Hollywood);

Larry Sabato (then Constitutional scholar, now election forecaster);

Wilbur Ross (US Secretary of Commerce under President Trump, now private investor)