Fellow Patriots:

I asked our team to pause for family time this week before kids return to school. The homepage is updated daily. The Digest returns on Monday, August 2. —Mark Alexander

Political Editors / May 24, 2021

In Brief: Biden and the Magic Money Nightmare

It’s unfashionable to worry about inflation. It’s also right.

The Spectator’s editorial board has a warning about rampant inflation and the federal policies driving it.

“We have nothing to fear but fear itself,” said Franklin D. Roosevelt famously, at his first inauguration in the depths of the Great Depression in 1933. What he didn’t allow for was the danger of overconfidence. Yes, a country can talk its way into recession, but it can also print and spend its way into an inflationary nightmare. That is the worrying prospect now facing America as Joe Biden, a president often compared to FDR, tries to tempt the country into a post-Covid spending spree courtesy of magic money.

It has become deeply unfashionable to worry about inflation. According to proponents of modern monetary theory, what happened in Weimar Germany and more recently in Mugabe’s Zimbabwe somehow is not relevant to developed economies. Governments can print their way out of economic crises without worrying about debt or inflation. Why, look what happened after the 2008-09 crisis when governments first started quantitative easing, they say: we had no inflation problem after that, however the Cassandras cried. Biden’s various multitrillion plans, including that $1,400 of helicopter money to every American who earns up to $75,000 a year, are not risky bets but wise and equitable policies which will return the US to growth and a fairer economy.

History, again, shows that we do have reason to worry. The editors explain:

You can’t keep printing money and expect inflation to stay low. The argument that we didn’t have inflation as a result of post-2008 quantitative easing simply isn’t true; it is just that it afflicted asset prices rather than consumer prices, and warped the economy in ways that were slightly harder to see.

Inflation isn’t going to stay contained within asset bubbles — not with Biden dropping so many dollars into every backyard and dolloping them all across the system. The result will be more buying power, without any extra capacity in the economy. Indeed, all that extra buying power will soon be flooding into consumer markets with a finite amount of stuff to buy.

Part of our being able to avoid troublesome levels of inflation before is, they argue, “the happy product of China’s opening up to the world.” Now that China is ramping up again, that’s going to change. Finally:

For now Biden can keep promising more spending while vaguely summoning the specter of taxes for the rich. The feast of free money is bound to go on until the laws of economic gravity assert themselves once more, a fate almost prophetically described in Kipling’s 1919 poem, “The Gods of the Copybook Headings,” a warning from the first great era of free money. Kipling foresaw an attempt to establish a brave new world “when all men are paid for existing and no man must pay for his sins.” Needless to say, his poem didn’t end well, but in “terror and slaughter.” Given what happened after the Weimar inflation, this proved more accurate than any economist’s prediction.

Read the whole thing here.

Start a conversation using these share links:

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!

★ PUBLIUS ★

“Our cause is noble; it is the cause of mankind!” —George Washington

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2021 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.