CBO Director: Inflation of ‘Past Couple of Years’ ‘Resulted’ from SpendingIan Hanchett 16 Aug 2023
On Tuesday’s broadcast of CNBC’s “Squawk Box,” Congressional Budget Office (CBO) Director Phillip Swagel said that “we’ve seen the downsides” of massive government spending “over the past couple of years…with the inflation that resulted.” Although he acknowledged supply constraints were another contributor to inflation.
Co-host Joe Kernen asked, “Why not use the strength of the dollar and the reserve status of the dollar, knowing that we can do as much as we want, and we’re always going to be able to borrow, so let’s just really ramp it up, Keynesian, and just — let’s engender 5% GDP growth from government spending, and damn the torpedoes, we’ll worry about it later. People think you can do that, it’s called MMT, the Fed will save us, print enough money. Why doesn’t that work, Phil?”
Swagel answered, “Yeah, I think we’ve seen the downsides of that over the past couple of years, first, with the inflation that resulted. Now, of course — that was partly the supply constraints, on top of the fiscal.”
Kernen then cut in to ask, “Is there anything to it, Phil, that we can do it, we can print, the dollar is a reserve currency, where we can print and people will continue to buy? Is there a breaking point? Because MMT people don’t think there is.”
Swagel responded, “At some point, there is, whether we have inflation in the near-term, and that contributes to higher interest rates, or bond purchasers will balk at buying more U.S. debt. At some point, we’ll see that in inflation and interest rates, and then that feeds back into growth, which, as you said, makes things more difficult.”
https://www.breitbart.com/clips/2023/08/16/cbo-director-inflation-of-past-couple-of-years-resulted-from-spending/
