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Economics professors: Fed’s fingerprints are all over inflation debacle

"It is unbelievable that any member of the Board of Governors could think the Fed could finance a $4 trillion increase in federal spending without causing inflation."


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  • | 2:45 p.m. May 3, 2022
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When do government spending and budget deficits cause inflation?

Answer: When the government spending is financed by borrowing from the Federal Reserve.

The Fed is the great money creator. When the Fed purchases assets, it does not have to check its bank account. It can merely write a check and thereby create money out of thin air.

 


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