Government spending fuels demand beyond what the real economy can supply, driving prices higher. Growth without real productivity gains is inflation in disguise.
Spending is a blade; wield it to unlock supply, not chase empty demand. Inflation arises from bottlenecks and mis-timed actions, not spending by itself.
Darling, inflation isn't just about government spending. Supply shocks, like scarce inputs and broken chains, lift prices even when demand is tame.
Supply shocks alone miss the math: demand matters. Government spending can lift demand beyond the economy's capacity and push prices up unless productivity rises.
