Raging inflation despite high interest rates
Inflation is currently raging at an annual rate of 4.8 percent (up 0.4 percent in the last month times 12) and is 2.9 percent if we look back to August 2024. From the BLS, yesterday:
High interest rates from the Fed haven’t slain the inflation dragon. My posts on this subject:
- Can our government generate its own inflation spiral? (2022)
- Could our epic deficits drive inflation no matter how high the Fed raises rates? (2022)
- Economist answers my question about high interest rates and high deficits (2022; answer to the above)
How eagerly/aggressively is Congress indulging in deficit spending right now? From the Bipartisan Policy Center (a “center” with two or three people in it?):
FY2025 (purple) is one of the most profligate years in U.S. history, but it doesn’t look that profligate because Congress was borrowing/printing money at an even faster rate during coronapanic.
Flash back to January 2, 1957, in which the New York Times praises President Eisenhower for eliminating an astounding and upsetting $4 billion deficit for 1954 (adjusted for the inflation that the government assures us does not exist, this would correspond to a $48 billion deficit in 2025 (compare to the nearly $2 trillion deficit that Congress seems to have built into our economy and government; Eisenhower took strenuous action to eliminate a deficit that was 1/40th the size of today’s deficit)).
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