The end of an economic illusion

Project Syndicate/John H. Cochrane/4-15-2022

“Moreover, this inflation is clearly rooted in excessively expansive fiscal policies. While supply shocks can raise the price of one thing relative to others, they do not raise all prices and wages together.  A lot of wishful thinking will have to be abandoned, starting with the idea that governments can borrow or print as much money as they need to spray at every problem.”

USAGOLD note: Cochrane offers advice as to how the government and central bank should proceed, but it is doubtful the White House is listening. The real takeaway here is that the present policies are likely to continue – the illusion of progress nurtured, the inflation sustained.