Wednesday, October 20, 2021

Quote of the Day: Economics Isn't Rocket Science

From Joe Biden, Milton Friedman, and the Tyranny of Tiny Minds

Friedman used to say, “Everything we know in economics we teach in Econ 1, and everything else is made up.”

As we see inflation taking off, and some odd economic theory that taking money from people to pay for government - um - projects doesn't "cost" anything, it's good to back to Econ 101:

... Friedman’s observation that “Inflation is always and everywhere a monetary phenomenon.”

What Friedman meant was, prices rise and fall according to all kinds of market forces, but inflation is what happens when government prints money faster than the economy generates new wealth.

We’ve been printing money by the trillions, and Biden wants to increase that by endless trillions more — all while using the federal bureaucracy to impede the creation of new wealth.

It’s a recipe for inflation, and anyone sensible — including Democratic economist Lawrence Summers — has been warning Biden of just that.

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