But Who Will Pay for It All?
Stand down, Powell! We’re going to need that printing press!
After the humiliating matter of insisting that inflation was transitory when it was anything but, Federal Reserve chairman Jerome Powell insists now that the Fed is going to do whatever it takes for as long as it takes to get inflation under control.
Never mind that he hemmed and he hawed around about if for months. But finally at the central bankers’ confab at Jackson Hole, Wyoming last month, Powell displayed new resolve to do what Paul Volcker did 40 years ago, and raise interest rates until inflation has been mostly wrung out of the economy – or at least relapsed to two percent annually.
We don’t know if Powell can pull it off – if the money-printing coalition of Fed board members will turn on him before he gets there, but for now, we are willing to just watch.
Unfortunately, the folks a stone’s throw away from the Fed at the White House and those down the Mall at the Capitol have a different idea.
They have some serious spending to do. After all, there’s an election dead ahead and another one after that. “Get out of the way,” they seem to be shouting at the central bankers in the Mariner Eccles building, “We have votes to buy!”
It is a little hard to keep up with all the new Federal spending. The latest big-ticket item is Biden’s student loan initiative. That’s a half-trillion-dollar proposition. In fact, counting what came before, Biden has shoveled some $750 billion toward the student loan boondoggles.
Meanwhile, we confess to being incapable of keeping up with all the money Biden is stovepiping Ukraine’s way. But don’t blame us. The spending is coming so thick and fast that it would challenge any number cruncher. Here’s just a sampling of the headlines:
- Biden administration announces nearly $3 billion in new military aid for Ukraine
- Biden-Harris Administration Announces $550 Million in New U.S. Military Assistance for Ukraine
- Biden signs a $40 billion package to help Ukraine fight Russia
- Biden announces an additional $1B in weapons and humanitarian aid to Ukraine
- Biden administration announces $450 million in additional military assistance for Ukraine
You begin to see the problem. Keeping up with it all would be a full-time job. And we have a business to run and clients to serve.
But there are a couple of other things that will contribute to Bidenflation. $480 billion for the Inflation Reduction Act. The $1.9 trillion American Rescue Plan. The 1.2 trillion Infrastructure bill.
They used to say a billion here and a billion there and pretty soon you’re talking about real money. But things have evolved. Now they say, a trillion here and a trillion there…
So keep those printing presses warmed up, Jerry. We’re going to need them!