Reagan Proved Deficits Don't Matter

Tom Sargent showed that the ends of hyperinflation in World War I, that's the worst inflation you can imagine. How did they end? Did they end by monetary tightening? No. They ended with no recession, no high interest rates, no reduction of money supply. So fiscal and monetary policy working together is always what ends big inflation. And I think that's also true of the US in the 1980s. Okay. From Reagan to George W. Bush, I'm going to put this a little bit crudely, but it's not entirely unfair. We'll let Congress spend what it wants to domestically as long as they fund this imperative of pursuing these wars, prosecuting these