Price stability, not inflation, will get the U.S. economy back to full employment sooner rather than later
May 17, 2021 | District of Columbia
n 2021, after a year of spending and borrowing trillions and now the dollar is rapidly getting weaker, and too much spending could be curtailing job seeking.
2020 and 2021 are two sides of the same coin: Price instability brought about by the dollar being either relatively too strong or too weak, which can lead to or exacerbate economic slowdowns, creating higher unemployment and worse if the conditions persist for too long.
In 2020, at the height of the Covid pandemic, the problems included the global economy being shut down plus local lockdowns resulting in a massive recession and a flight to safety into U.S. treasuries as interest rates collapsed, making the dollar too strong. With the onset of deflation, consumer prices plummeted in March and April 2020, with oil even dropping briefly below zero dollars for the first time in history, and a concurrent rise of unemployment as 25 million Americans lost their jobs…
(Excerpts from the Daily Tourch)
