Comment on All the data so far is showing inflation isn't going away, and is making things tough on the Fed

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RustyEarthfire@lemmy.world ⁨6⁩ ⁨months⁩ ago

It’s a long-standing observation of economists that government spending leads to inflation. Probably the simplest model is that the government is increasing demand without increasing supply.

Note that in this model, taxes have a deflationary impact because they reduce demand from individuals.

This is not an opinion on how much government spending is affecting current inflation (nor how much inflation is to blame for any particular category of goods).

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