Republican/Libertarian and the inflation crisis (that didn't come...)

Locally Republicans and Libertarians have been screaming that the sky was falling and hyperinflation was right around the corner.

 

Jason Pye was preparing us for the stimulus to not work, and inflation was going to be setting in... Obama was going to be Jimmy Carter

Nevermind that Keynesianism is a proven failure, what makes our leaders think we can get it right? What happens when it fails? Do we push another Keynesian-based "stimulus" proposal? What about inflation from overspending and printing new money? What about the interest rates that will come from crowding out and inflation?

There are so many questions, but we can be sure Obama is really setting himself up to be Jimmy Carter.

That was back in January of 2009.  Now here we sit March of 2010.

 

Well turns out the stimulus worked--and if Republicans hadn't been the party of no and had not been an obstacle to a stronger stimulus bill our economic outlook would be a lot better than it is right now.

 

Paul Krugman noted that these fears of inflation that are upon us--errr at least upon us for a while now:

there are a lot of voices predicting imminent hyperinflation in 2009, make that 2010 (and yes, I am keeping a record).

Economist Brad Delong adds to Krugman's overview of inflation fears:

I would add:

• The people putting their money on the line in financial markets are really, really, really not expecting any inflation.
• The inflation bugs have been expecting an imminent rise in inflation within the yert for two and a half years now--since the fall of 2007; thus there is something wrong with their analysis.
• If there were signs of inflation we would be in a much healthier situation--because people would then be trying to buy real assets rather than Treasury bonds with their money, and that would push demand up and unemployment down.

Barring a complete turnover of the Federal Reserve Open Market Committee, I see no way in which there can be even a moderate outburst of inflation here in the United States until the government budget situation becomes truly dire--but that is not projected to happen until the 2020s (and, if health care reform passes and we continue down the road it puts us on, may not happen at all).

Hopefully voters will follow the track record of claims made by the likes of Lynn Westmoreland and Steve Davis.

Posted via email from Jim Nichols for GA State House