Lone Candle
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Fiscal Policy – The Economic Lowdown Podcast Series Federal Reserve Bank of St. Louis. https://www.stlouisfed.org/education/economic-lowdown-podcast-series/episode-21-fiscal-policy How Can Fiscal Policy Help Reduce Inflation? Peter G. Peterson Foundation. 2023 3 7. https://www.pgpf.org/blog/2023/03/how-can-fiscal-policy-help-reduce-inflation US history lesson: Taxes on rich people helped to beat inflation (and
“The annualized inflation rate for February fell slightly to 6 percent, but the underlying numbers show that prices continue to grow at a stubbornly high rate.”https://reason.com/2023/03/14/inflation-isnt-going-away/
https://www.politico.com/news/2023/02/24/china-economy-federal-reserve-inflation-00084231
“if you thought mechanically that when wage growth is high and inflation is high, the only way these things go down is through higher unemployment — well you have to actually acknowledge now that maybe there is a wider set of possibilities.”
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“Yeah, the idea that “no ‘help wanted’ sign should ever exist” is not to me a sign of a healthy economy. The story for much of 2021 was like, “Where have all the workers gone?” and the suggestion was that it must be that people don’t want to work. But in actuality, there were some sectors that were really eager to hire — Amazon expanding its warehousing staff probably did put pressure on other industries looking to hire. But competing sectoral demand for labor is just very different from saying people don’t want to work.”
“A widespread avian flu outbreak devastated the poultry industry in 2022, causing the deaths of more than 43 million hens. December egg inventories were down nearly 30 percent from the year before, just in time for the holiday baking season. Under the basic rules of economics, a persistent drop in supply leading into a time of increased demand is bound to have this result.”
“”We find that excess inflation is significantly correlated to each country’s own domestic stimulus and to various exposures of foreign stimulus,” concluded a trio of economists at the St. Louis Federal Reserve in a report published last month. In the U.S., they found that “fiscal stimulus during the pandemic contributed to an increase in inflation of about 2.6 percentage points.”
That’s a significant increase, even if it doesn’t account for the full run-up of inflation that took place during the past 18 months. Price increases accelerated in late 2021 and throughout 2022, ultimately peaking at an annualized rate of 9.1 percent in June.
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“Other recent reviews of COVID-era stimulus bills have come to a similar conclusion. In a paper published in September, economists at Johns Hopkins University and the Chicago Federal Reserve said “fiscal inflation” accounted for “approximately half” of the recent price increases.
That’s troubling, they added, because “fiscal inflation tends to be highly
persistent…When inflation has a fiscal nature, monetary policy alone may not provide an effective response.”
So far, the chief response to inflation has been a monetary one.””
“As part of the new rules package approved by House Republicans this week, the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) will now be required to score legislation on projected macroeconomic effects—including inflation.
That’s a welcome change that will provide more information to lawmakers and the general public about the impact of spending bills.”
“President Biden still isn’t what you’d call popular, but he’s closer to popular than he’s been in some time. On Jan. 11, Biden hit a 44.1 percent approval rating in FiveThirtyEight’s average — his highest mark since October 2021. That was 3 percentage points higher than it was on Nov. 9, which isn’t a huge increase in the grand scheme of things, but in this polarized age where any movement in the president’s approval rating is rare, it’s a veritable Bidenaissance.
This is the part of the story where you expect me to explain why this is happening. Which is understandable, except it’s impossible to know for sure what’s behind this shift. One leading theory, though: It’s because inflation has been slowing down. Prices in December 2022 were just 6.5 percent higher than they were in December 2021, which was the lowest inflation rate in over a year. Gas prices, another highly visible metric of the strain on Americans’ wallets, also plummeted from an average of $3.80 per gallon in November to $3.32 per gallon in December. These seem like pretty compelling explanations, considering how closely Biden’s approval rating was tied to the inflation rate and gas prices last year.”
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“But is Biden’s luck about to run out? The discovery of a handful of classified documents from the Penn Biden Center and Biden’s Delaware home has generated arguably the first bad news story for Biden in months, and it’s fair to wonder whether it will reverse — or at least halt — his miniature political comeback. The few polls that have been conducted since these revelations suggest that Americans think Biden acted badly, and that could be dragging down his approval rating.”