Very puzzling to me that anyone is blaming government spending for inflation. Is that just a corporate scapegoat?
this post was submitted on 28 Apr 2024
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No, new money entering the economy comes from the government and government spending is one of the ways that happens.
It's a long-standing observation of economists that government spending leads to inflation. Probably the simplest model is that the government is increasing demand without increasing supply.
Note that in this model, taxes have a deflationary impact because they reduce demand from individuals.
This is not an opinion on how much government spending is affecting current inflation (nor how much inflation is to blame for any particular category of goods).