Commentary
Governments and central banks have become the lender of first resort instead of last resort, and this is immensely dangerous. Global debt soars, inflation creeps in, and many of the so-called “supply chain disruptions” are the result of zombification after years of subsidizing low productivity and penalizing high productivity with increased taxes.
There are many reasons why nations shouldn’t “spend now and deal with the consequences later.” First, the spending is made by politicians who will not be held accountable for the malinvestment and unwise outlay decisions. Furthermore, the cost will always be paid by taxpayers and businesses.
Think about the irony of promoting an “Inflation Reduction Act” that means spending more and monetizing more debt. But it’s even more ironic to launch an inflation reduction act after creating massive inflation with multi-trillion-dollar stimulus plans and central bank balance sheet expansion. Government presents itself as the solution to the problems it creates and passes the bill twice to taxpayers….