Tom Bilyeu's Impact Theory Lyn Alden Breaks Down Fiscal Dominance, Inflation, and the End of American Middle Class Prosperity Part 1
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Sep 9, 2025 
Lyn Alden, a renowned macroeconomist and financial author, joins for an incisive discussion on fiscal dominance, inflation, and the challenges facing the American middle class. She emphasizes how current policy choices are driving inflation rather than mere market forces. Alden delves into alarming debt trends, revealing how rising debt-to-GDP ratios threaten economic stability. The conversation also explores revitalizing American manufacturing to improve job prospects and discusses the urgent need for effective governance to address growing economic disparities.
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Fiscal Dominance Overpowers The Fed
- Fiscal dominance occurs when government deficits and debt growth overpower central bank tools and drive persistent debasement.
- Lyn Alden warns that those not receiving fiscal spending need protections against this dilution of fiat money.
How The Fed Historically Stopped Inflation
- Central banks traditionally slow inflation by raising rates to curb bank lending, which contracts money creation.
- That mechanism worked when private credit growth was the main inflation driver, like in the 1970s.
Rates Can Worsen Public Deficits
- In fiscal dominance higher rates can worsen deficits because interest expense on large public debt rises faster than private lending slows.
- The U.S. now has public-sector credit formation larger than private credit, reversing past dynamics.