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Comment by JumpCrisscross | Hacker News Reader

> mean with the greatest wealth transfer to the wealthy in history that added a quarter to our entire national debt?

The national debt was added before the inflation took hold to counter the Covid recession. (When the MMT nutters were at the helm.)

Powell cured the resulting inflation without causing a recession. He did that without adding anything to our national debt.

> What Trump and Biden should've done is implemented a windfall profits tax of probably 80%

This just creates a political game of defining what is and isn't a windfall. A progressive corporate tax achieves what I think you want to without the side effects.

Either way, the playbook for getting out of this is steeply increasing rates and then moderating them before inflation hits target.

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> Powell cured the resulting inflation without causing a recession. He did that without adding anything to our national debt.

That doesn't actually seem like a huge achievement. Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much.

> That doesn't actually seem like a huge achievement

Historically, it has been.

> Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much

You're confusing money supply and price levels. Inflation measures the latter. You can have constant money supply and stable prices, inflation or deflation. And since most money is privately created, controlling how much money is and isn't created "out of thin air" is actually quite challenging.

> You're confusing money supply and price levels.

They're closely related.

> And since most money is privately created, controlling how much money is and isn't created "out of thin air" is actually quite challenging.

It's the central bank which controls the interest rates, the reserve requirement and other stuff which affects it.

> They're closely related

But not the same. In this case, the difference is material.

> It's the central bank which controls the interest rates, the reserve requirement and other stuff which affects it

Affects. But does not control. That's what makes it challenging.

To my memory, a soft landing from 5+ percent inflation has been achieved precisely once in modern monetary history. (And not for lack of trying.)

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