Lazard chief executive Peter Orszag recently published an opinion piece in the Washington Post that exists as an essential economics lesson for left-leaning Keynesian economic thinkers, along with their erstwhile opposites on the supply-side right. Keynesian and supply-side have been in agreement in recent years that President Biden’s surely wasteful spending at the beginning of his administration created “inflation.” Orszag, citing a study he published with Robin Brooks (Brookings) and William Murdock (Lazard), has logically found that “the common story” about inflation’s cause, “covid-era stimulus,” is “more wrong than right.”
For background, when governments redistribute the wealth they’ve taxed or borrowed away, the spending that results from the redistribution only occurs insofar as those redistributed or borrowed from have commensurately less money to spend. Put in simpler terms, $20 that is taxed or voluntarily loaned from your pocket means you have $20 fewer dollars’ worth of “demand.”
Read Full Article »
