Some folks, including myself, are wondering why our economy isn’t yet experiencing run-away inflation, given all the billions of dollars created to stimulate ourselves out of our economic malaise.
One reader correctly reminded me that the government thrives on inflation, but cannot accomplish everything it sets out to do, as much as it tries to stimulate us back into inflation through its persistent draconian measures.
I suggest that there are unanticipated delayed reactions that result from government intervention and “tweaking.” Stimulus is provided in the form of very low interest rates and pumping several hundred billion into the money supply. No response. Interest rates are lowered again, this time to near zero and additional hundreds of billions are pumped into our money supply. Still no response. But an unseen tension is building in the economic system and in our psyches until ***POW*** all the built up fiscal tension finally takes hold and swerves our economy into places never anticipated (by government) and never intended to go creating never intended cataclysmic consequences.
This “over-steering” of our economy by an overly-paternalistic and impatient federal government reminds me of over-steering a semi-trailer truck on an icy highway at high speed. The driver is the hyper-involved federal government. The truck is our economy. The motorists on the near side of the median are the rest of us. Take a look at what the unintended consequence of over-meddling can be…
Oh, and the motorists delayed expletives will be ours as well.