The NPR Politics Podcast Planet Money: What's Causing Inflation?
Jul 4, 2022
Waylon Wong, a reporter for NPR's The Indicator, dives into the complex world of inflation, dissecting its recent surge and the debates among economists about its root causes. They explore how government borrowing during the pandemic and supply chain issues have influenced rising prices. Wong also examines the Federal Reserve's significant interest rate hike and its implications. Additionally, the discussion highlights the evolving labor market dynamics, considering how low unemployment may help lower inflation while benefiting marginalized workers.
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Fiscal Theory of Inflation
- John Cochran believes fiscal policy, or government borrowing and spending, is the primary driver of inflation.
- He attributes current inflation to the $5 trillion COVID-19 stimulus packages.
Stimulus Checks and Inflation
- Cochran questioned the need for stimulus checks for financially secure individuals, like retired government employees.
- He argued that this excessive spending contributed significantly to the current inflation.
Government Borrowing and Inflation
- Cochran argues that government borrowing, not spending itself, fuels inflation.
- He suggests that a clear plan to repay debt, like raising taxes, could mitigate inflation by reducing spending.