$40,000 for every man, woman and child was printed for corona stimulus. $13 trillion total. If you're wondering why all this inflation happened, it's pretty simple cause and effect.
Would you consider perhaps that a sky-rocketing price in eggs, when inflation overall has been between 6% and 8% might be about something else?
https://fee.org/articles/federal-covid-spending-will-cost-41...
Fact check:
https://www.usatoday.com/story/news/factcheck/2022/04/14/fac...
https://theconversation.com/joe-bidens-us-1-9-trillion-stimu...
https://www.nytimes.com/interactive/2022/03/11/us/how-covid-...
It looks like Biden's contribution is about $2 trillion to families and individuals. Counting the previous administration: another $2 trillion to businesses, $1 trillion to state and local, and $1 trillion to healthcare and other programs, for about $5-6 trillion total.
Worst case, that's about $18,000 per capita for 332 million people in the US. Best case, more like $6,000, since much of the stimulus was in the form of payroll loans that businesses were supposed to pay back, although much of that has been forgiven. Without knowing more details, the best I can estimate is the logarithmic mean, which is about $11,000. Spread over 3 years, that's just under $4,000 per capita per year.
Note that this is less than the $3,000 per year that I got in Pell grants to attend college in the late 90s, when money was worth about twice what it's worth today. At a $23 trillion US GDP, there's $70,000 per capita to play with, so $4,000 extra per year would raise per capita income by 5.7%. High yes, but not much higher than a typical 3% inflation. Especially when much of the world was out of work for a year or two during the pandemic.
The real culprit is corporate price gouging and speculation:
https://www.commondreams.org/news/2022/08/26/all-us-are-payi...
https://www.theguardian.com/commentisfree/2022/sep/25/inflat...
I noticed that Google and even DuckDuckGo have ranked this information so low that hysterical headlines totally dominate search results. It will be interesting to see how investigative journalism traces these knee-jerk headlines to their sources. Although I doubt that any titans of industry or politicians will be unmasked before the next election.
Capitalism still works. You can only price gouge where you have a monopoly and unless you're proposing some massive intra/inter-industry wide conspiracy the answer is still simple inflation.
I did a deep dive this morning on the Federal Reserve's contribution to inflation, and it looks to me like interest rate hikes contradict quantitative easing. I think they had no choice but to lend more money during the pandemic, or else we might have faced the total loss of personal savings and a global depression. So they made up for that by raising interest rates later in an attempt to slow inflation. We can argue about the amounts, but their $7 trillion contribution just isn't that much when measured against the US's $23 trillion GDP IMHO.
I also stumbled onto an interesting insight. Most of our economic policies since Reagan have followed Milton Friedman. That's where the Fed's quantitative easing comes in, because it's based on the quantity theory of money (QTM) from David Hume and John Stuart Mill:
https://www.investopedia.com/ask/answers/042015/how-does-mon...
Keynesian economics (an alternative approach) rejects QTM and says that inflation comes from demand-pull and cost-push. To me this is self-evident, because even with no change in money supply, prices will rise due to increased demand when supply decreases because people are out of work.
Just so we're both on the same page, here's an alternative interpretation of inflation from the Reserve Bank of Australia, which examines demand-pull, cost-push and inflation expectations instead of QTM:
https://www.rba.gov.au/education/resources/explainers/causes...
Although they practiced quantitative easing in 2022 just like we did, and reached a similar 7% inflation rate. Which seems to indicate that they had no choice, meaning that inflation was structural outside the US too, and not due to a specific economic or political approach.
Notably, China began flirting with Keynesian economics in the late 90s. Here's an opinion piece from fee.org, which hosts the one I found supporting your initial argument:
https://fee.org/articles/chinas-flirtation-with-keynesian-ec...
Since that time, China's economy has grown exponentially and now they're eating our lunch:
https://en.wikipedia.org/wiki/Money_supply#/media/File:China...
https://en.wikipedia.org/wiki/Money_supply
So you say that capitalism still works, but this data challenges that assumption on a number of levels.
IMHO the financial elites of the world are effectively gamblers who make long bets on how this will all play out. Based on these figures, where are they most likely to place their bets for the best return? China and the developing nations it influences.
The propaganda against progressivism, socialism and communism is a knee-jerk reaction to the two lost decades we've had in the time since, as US wages have stagnated and we've lost our industrial capacity, including the closing of 70,000 factories, which began when the George W. Bush administration did nothing to stop outsourcing, and pretty much endorsed it to enrich its wealthy contributors with short-term gains:
https://checkyourfact.com/2018/04/12/fact-check-did-the-us-l...
The US is gradually losing its petro-dollar dominance and will probably lose its global policing and empire-building abilities by the middle of this century. We'll have to start producing and paying our own way again, not just run huge trade deficits and continue importing cheap goods. A similar thing happened when England lost its colonies.
So now we're colonizing ourselves in the search for cheap labor. At least we were until the pandemic, but people woke up. Now we see how wealth comes mostly from being born with it or skimming it from workers. A point proven every day by our leading billionaires.
If wealth doesn't come from hard work or saving, that creates cognitive dissonance. Which is the best explanation I can find for stuff like the former president's election.
And that's the real danger in all of this. Not that the US might adopt democratic socialism, but that exploited and disenfranchised workers around the world could elect authoritarian leaders in a misguided attempt to thwart their oppression, which could lead to WWIII.
So price gouging doesn't come just from monopoly, but from the wealthy elites created by those monopolies who effectively control our government now. They're the conspiracy. They could use their wealth to alleviate human suffering, but they're still asleep. In other words, there's nobody at the wheel advocating for progressive change who has the means to actually enact it. Only outreach and organizing can do that. The fate of the world quite literally depends on it.
Anyway, I'm well outside my wheelhouse here, and we're below the fold so nobody will probably ever read this anyway. But I hope this clears up my position. I have no terse way to defend it, because the evidence is vast and suppressed by the mainstream media and wealthy elites who don't benefit from a reduction in wealth inequality.
Edit: I re-read your original comment, and maybe we both agree that it would have been more effective to just give everyone the $40,000 directly? Just like during the housing bubble popping in 2008, when people needed a few thousand dollars to make their mortgage payments, but the government gave the money to the banks instead, which prolonged the recession. To not print the money is not a viable option IMHO, for the reasons I stated above.
https://en.wikipedia.org/wiki/List_of_countries_by_trade-to-...
This is important as it really underscores what a small part trade is to our economy compared to other nations. America's manufacturing output is still at record levels despite less people working in manufacturing. That is part of why our GDP is so high, the productivity of a single person is constantly increasing with technology.
I also disagree the 'elites can use their wealth to alleviate human suffering'. The elites, billionaires, etc.. do not have enough money between them to pay for better hospitals, schools, fair laws, etc.. They also don't have the ability to control prices as they're constantly competing with each other. They are a lot less powerful than you think.
The changes happening in society are more often than not capitalism itself balancing limited resources the best it can. Society is massively complex, way out of scope for any single human to understand or control. The fed and legislature printing money disrupts that self regulating process.
What triggers me about this stuff is power imbalance. After I got out of school, I moved furniture for 3 years in the early 2000s around the time of the Dot Bomb, 9/11 and wars in the Middle East. I worked harder physically than some people do over a lifetime. But I had no money. Then I had a job repairing computers for 3 years during the housing bubble pop. I repaired up to 3-8 computers per day, 6 days per week sometimes, and I had no money. I've had countless software projects fail to generate income, and again, I had no money.
Meanwhile I watched my employers throw around vast sums. It costs more to fill a semi truck with fuel than to pay lumpers to load and unload it all day. Heating a warehouse costs a small fortune. My bosses bought the strip mall we worked in while we were coming up short in pay $100 every month. I experienced the endless insults inflicted on labor firsthand.
It wasn't until I was exposed to New Age philosophy in the late 2010s and the pandemic that I started getting over myself. I realize now that my struggles were something that I chose to take on for their experience in this life. I let others dictate my time and didn't communicate my needs or set boundaries, and learned the hard way how personal growth works.
What I'm getting at is that we all let the wealthy be wealthy at our pleasure. We could turn the tables at any time, but we don't. Why is that?
So what I mean about elites alleviating suffering, is that they could do it without doing anything at all, simply through messaging and culture and doing the shadow work to understand why they hoard wealth to such a degree. They could steer us away from subjugation and exploitation towards egalitarianism and self-actualization. But they're ok with skimming 3/4 of productivity from their workers. And it's not even always their fault, because that's just how business works under capitalism. They're every bit as trapped as we are, if we look at metrics like leisure time. In fact, they may be even more trapped, because their material comfort blinds them to the plight of others. Which touches on the religious aspect of all of this, how for whatever reason humans tend to put themselves in The Matrix to live up to external expectation. That's a lot to unpack, so I'll leave it at that.
Good point about trade, I agree that something has always bothered me about people harping on about the trade deficit. Probably what's going on is that we don't have an economic measure for stability. Countries love to do business with the US because it's reliable. They make the products and get paid, so it may be worth doing even at a loss. We forget how difficult it is for them to make money locally. But in fairness, we also forget how our lack of fair trade policies impacts their ability to do business. Again, it evolves.
The fed bothers me too, for what it's worth. I don't think it's right that some people are able to print money arbitrarily, while others are stuck in zero-sum games. Like, why should banks get bailed out while we all have to go bankrupt? That's fundamentally discrimination against the poor, performed under the guise of protecting the poor from economic downturns. We can't stop the banks, and maybe they won't let us have UBI, but maybe we could vote for the government to provide low-interest loans of perhaps $10,000 to create competition. Or maybe that would create its own problems, I don't know. But access to capital is literally the single most important thing under capitalism, and that's being denied to millions of hardworking people in our society right now for.. reasons.
Anyway, I have no real argument to make here. It's been good chatting, and thanks for not jumping all over me about some technicality I overlooked! I like to think of this stuff as breadcrumbs for further thought, not solutions wrapped in a bow.
> Using the relationship in Figure 1, we calculate this as an increase of the PCE price level from 295.7 to a midpoint of estimates of 300.2, plus or minus 0.9.
> Expectation of additional debt forgiveness programs evokes a moral hazard incentive for college students to take out more loans and for universities to increase tuition rates.1 To the extent that inflation is inherently persistent, any initial price level increase would also lead to sustained inflation over the near future.
In a vacuum it might be simple cause and effect, but nothing about the global situation in the past few years is simple. Money printing certainly had a part to play in inflation, but peeling it off from all the other factors and labeling it as the main culprit is kind of just mental gymnastics.