Politicians bemoan the “end of abundance,” but they’re the ones who are ending it. From MN Gordon at economicprism.com:
Elizabeth Warren must be a fool. That, or she thinks the rest of us are fools.
The Senator recently took to CNN to publicly fret over the Federal Reserve’s rate hikes. She’s worried they will tip the economy into recession.
What’s Warren afraid of? Her fears have already come true.
The U.S. economy already is in a recession. GDP data alone shows the economy contracted in both the first and second quarter of 2022.
The technical definition for a recession has long been understood to be two consecutive quarters of declining GDP. So, by definition, the economy is in a recession. Everyone knows this, save President Biden and Warren.
Recessions may not be agreeable. But they are necessary. In fact, the present recession is precisely what’s needed to clean up the consumer price inflation mess that Warren and her colleagues made. There are consequences for mass money printing. And they must be reckoned one way or another.
The fundamental fact is today’s consumer price inflation fiasco is a direct result of Washington’s spending policies. The coronavirus hysteria provided the perfect excuse to spew printing press money into the economy. Warren was one of the greatest advocates.
The Fed, for its part, merely obliged the wishes of Congress. It created credit from thin air and loaned it to the Treasury in the form of Treasury note purchases.
The Treasury then obliged the wishes of Congress. It used the money that was borrowed from the Fed to fund stimmy checks, PPP, and generous federal unemployment payments. This was all to meet the legislative demands of Warren and the other knaves in Congress.