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This ends up being such an egregiously crazy claim, that it's no better than Republican voter focus groups complaining about Hillary's 2022 policies. And I think it's worth taking apart this fact-free nonsense in a definitive way, since Barro does or should know better. @jbarro/1584735198117531648Permalink On twitter.com
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First, the spending. Of course spending can be inflationary in the long haul and under some situations. Study after study indicate this effect is unclear, and is at least 18 months-2 years out from the spending in any case. The St. Louis Fed says this: stlouisfed.org/on-the-economy/2016/may/how-does-government-spending-affect-inflationPermalink On twitter.com
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Then there's timing and amounts. This helpful chart on relief spending from usatoday.com/in-depth/news/2021/03/11/covid-19-stimulus-how-much-do-coronavirus-relief-bills-cost/4602942001/ shows that the majority of massive relief spending happened before January 2022, with most in March 2021. Even that spending is unlikely to be affecting our economy yet.Permalink On twitter.com
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While we're talking about the past, let's look at the $28 billion bailout the Trump admin used a trade slush fund to hand out to farming cronies without any approval from Congress - twice the entire amount used to bail our car companies in 2008. freep.com/story/money/business/john-gallagher/2019/09/24/farmer-bailout-payments-china-trade-tariffs/2418676001/On twitter.com
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Indeed, it would only get any competition from the move by the Trump White House a bit later (this time with legislation) to pump $25 billion into an airline bailout. nytimes.com/2020/04/14/business/coronavirus-airlines-bailout-treasury-department.htmlPermalink On twitter.com
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Those bailouts, along with a policy of cutting taxes to multinational corporations in an overheated economy in 2017, did at least as much to drive some sort of inflation, if you accept the premise of that. But I'm not sure anyone should.Permalink On twitter.com
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For instance, it's widely known that post-COVID inflation is a global phenomenon, one that (putting aside the hyperinflationary unstable countries) is consistent across policies, politicians, and anything else outside of COVID disruptions.Permalink On twitter.com
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So if there's no clear link between inflation and either government spending in the short term or government policy choices globally (which varied significantly), what exactly is the point of blaming Dems for money they mostly didn't appropriate for a crisis with global scope?Permalink On twitter.com
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Well, speculating here, I think it's fairly clear that Barro's real complaint is Democratic messaging and uncritical repetition of right-wing propaganda. And I'm happy to pin that on a party terminally bad at politics, and with, on the best of days, a difficult base.Permalink On twitter.com
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And maybe he's right that perception and vibes is all the matters, and Dems having policies that are counter-factually seen as inflationary is the real issue here. But I think voters, like Barro himself, need to ingest some facts here, if we're going to make decisions as a group.Permalink On twitter.com
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I suspect that the fiscally/culturally conservative Barro is with Dems as long as the right is a threat to our system of governance. Great! But you don't fight fact-free vibes and narratives taking root by uncritically parroting them. You know what's inflationary policy?Permalink On twitter.com
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$1,445B tax cut to corporations - Jan 2018 $25B airline bailout - April 2020 $953B PPP bailout** - April 2020 $28B* farmer bailout - Sept 2019 *Unappropriated slush fund money taken for cronies **Appropriated this time, but $80B+ in fraud (nbcnews.com/politics/justice-department/biggest-fraud-generation-looting-covid-relief-program-known-ppp-n1279664)Permalink On twitter.com
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I’ll also leave this here, to illustrate the essential absurdity of Barro’s position: to wit, the right can campaign on drag queens, CRT, and sexy M&M’s, so long as they say inflation between breaths. It’s performative nonsense from the only inflationary party in America. @atrupar/1584937497443827716Permalink On twitter.com
