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josephh

And the administration wants to spend $1.75 trillion more dollars? Give me a break.

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How is spending by the US government related to energy prices?

If anything the subsidies for renewable energy (build out and research) would give fossil fuels more competition.

This inflation seems like a global thing.

The US dollar is a global thing as well.

Although inflation is global, some countries have it pretty low. For example, Portugal is at 1.16%. Two years ago it was negative. Another point is that Portugal is actively moving to renewable energy. Currently I believe they are at 28% or more.

I think the logic is government dollars competing with private dollars, especially during a supply shock, will send prices up

Do not think raising interest rates would help in the pandemic disruption supply side issues that are the cause of this.

https://twitter.com/M_C_Klein/status/1480538926398029824 consumer spending is down, this flat-out rules out "too much money chasing too little goods" as the root cause, for surely then sellers would lower prices to sell enough more more volume to raise back consumer spending and increase total profit.

Care to elaborate what you mean, or is this just vague political hand-wringing?

Too much money chasing too few good causes inflation.

what does “chasing too few” mean?

Theoretically, spending that is funded by new taxes shouldn't cause inflation as the money is not "new". The deficit spending of the stimulus checks under both administrations was "new" money chasing substantially fewer products (supply line shortages).

If anything, taxes could have a cooling effect and lower demand.

The programs for spending the money are slated to last as little as a single year, while the taxes to balance the spending are expected to do so over 10 years. It absolutely is inflationary, particularly if any of these shorter than 10 year programs get extended without new taxes to pay for them.

> The programs for spending the money are slated to last as little as a single year

What does this mean? Are you saying that there exists a program in this package that will take less than a year, or are you saying that all of the programs in this package could be wrapped up within a single year? If the latter, fine. If the former, you're using careful phrasing to be intentionally deceptive, which is not a way to argue with people you're trying to convince.

If there are 10 programs that will all be paid for by 10 years of tax increases and one program’s spending happens all in a year and the others across a range of times, none longer than 10 years, that line of argument is convincing to me that there is short-term spending in excess of taxation married to pay for it, even if no programs overrun their budget or get extended without new taxes to cover the extension.

Yes, the former. For instance, the Expanded Child Tax Credit, is extended for 1 year at a estimated cost of $190M if this were expanded to the 10 years the bill is supposed to be payed for, it would be larger than the entire bill is supposed to be.

The spending from the ARA and covid relief makes up a relatively tiny contribution to the CPI rising. It really has to do with supply chains and energy prices as the economy continues to improve "post"-COVID, as the article states.

Its a good point - with a subnote that they added taxes to cover the spending.

But to be clear, if this is deficit driven, it is driven by the tax cuts from the previous congress.

Maybe we should keep the taxes in the new bill and get rid of the new spending

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