[Steve_American]

Prof. Bill Mitchell's blog today includes a graph created with International Monetary Fund (IMF) data for 122 (or 118 nations to remove 4 outliers). This graph shows that as fiscal support to the nation's economy by the Gov. increased the rate of "inflation" decreased a small amount. This is the opposite of MainStream Econ. Theory.
. . . Bill says this shows "no relation".
. . . I say that it *proves* that the price increases are NOT being caused by the large Gov. spending to support the nations' economies. Bill has said. and here repeats, that the price increases are caused by supply chain bottlenecks and by corps with monopoly pricing power using that power to increase their profits. Bill says that to some extent the increases are enabled by the gov. spending, in that, without the Gov. spending, many of the people would not be buying the stuff at all, because they would not have any excess money to spend.

Bill says the it may be 2 years until the pandemic lets the world settle down into a new normal. Because of this I've been saying that the Govs. of the world need to keep the fiscal spending going. The alternative is poor people dying in large numbers for lack of money to buy the higher priced food.

So again, actual real world data [note: the IMF is a very trusted source of economic data] proves that the Mainstream Econ. theory is *wrong*. The theory says that deficit spending causes the money supply to grow, and this makes the money drop in value; i.e. inflation WILL always start.

http://bilbo.economicoutlook.net/blog/?p=49216&cpage=1#comment-74216

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[BlutoSays]

I think you would glom on to things like 2+2 really doesn't equal 4.

[Steve_American]

I think you would glom on to things like 2+2 really doesn't equal 4.

A few things in reply.
1] This is a banned 1 line post, that is also mildly insulting.

2] As an Engineering student in the 60s I can totally understand how in data (as opposed to pure math) 2+2 can equal 5 or 3. E.g., 2.4 + 2.3 = 4.7, which should be rounded to 5.

3] It fails to explain your point clearly.

The data for the graph came from the IMF. The IMF is a neo-liberal tool of the US and businessmen to enslave 3rd world nations in debt slavery. So, I don't think you are calling them liars.
The data shows that the higher the percentage of a nation's GDP that it spent in the covid crisis to support the economy the less amount of inflation the nation has had.
This is the opposite of what all Mainstream Economic Theories predict.
It is only a slight downward slope, so it only shows that there is no relation between the deficit spending and the following inflation.
OTOH, the vertical spread of the data points on the 2nd graph is 5 times the horizontal spread. This might have been created by the choice of scale along the X & Y axes. However, it seems significant to me.
The 4 data points that were removed were all in the low end of the size of the deficit spending, not at the high end of the deficit spending. So, they also show a lack of conformity to the MsETs.

This spread of data seems to show that the size of the inflation is related to some other set of causes, that varied in the different nations. Bill pointed to 2 such causes. 1] How exposed to a long supplychain the nation was, and so how much covid impacted its ability to avoid shortages. And, 2] the existence and/or power in the nation of corps with monopoly pricing power.

BTW --- thanks for the opportunity to explain it further.
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