I Prayed have prayed
Lord, we ask that you put an end to our reckless spending spree and the borrowing that enables it. Holy Spirit of wisdom, fall on our leaders. Open their eyes to the severity of this problem so they will wake up and stop the madness.

Inflation has pushed our country to the brink of financial disaster, and federal spending is mostly to blame. Inflation weakens the dollar, and if the dollar collapsed it would be catastrophic for the U.S. and the world economy. We need to pray for reformation and restraint for our government, in the Federal Reserve, in Congress, and in the White House.

From The Federalist: Watching the screen on a gas pump while filling your vehicle’s tank is liable to induce a panic attack. Paying for a used car almost requires taking out a second mortgage. Speaking of mortgages, members of the middle class are being priced out of the housing market as home prices march relentlessly upward. Many price increases are out of control.

How did we get here? A little over a year ago, and in the years before the Covid-19 pandemic, most prices were relatively stable. But more recently, general price inflation is at a 40-year high

The late economist Milton Friedman helped explain the inflation and stagflation of the 1970s. His explanation helped shape the strong economic recovery of the 1980s, built on the principles of limited government, with sound monetary policy that resulted in a steep decline in what had been rampant, double-digit inflation…

President Joe Biden has not openly endorsed MMT, but he’s no fan of Friedman either. Instead, he seems content to have many mostly younger congressional Democrats advocate for MMT, which provides convenient and seemingly academic reasoning for financing more federal spending without explicitly raising taxes. It has a similar political appeal that Keynesianism presented almost a century ago, and MMT is just as flawed…

Now that inflation is running amok, MMT adherents believe tax increases are the primary (if not only) cure. They claim inflation is not caused by the Fed creating too much money, but by people having too much money to spend; taxation will remove that excess liquidity and stop inflation.

However, MMT doesn’t explain why it’s only inflationary when people spend money, but not when the government spends it. Somehow the Fed creating money by purchasing government debt miraculously doesn’t bid up prices for scarce resources. The theory sounds more like a belief than science — something that must be trusted rather than demonstrated…

But MMT is not entirely wrong on using taxation to stop inflation. If those taxes are used to pay for deficit spending — which really should be done by spending less — rather than the Fed financing it, then higher taxes can lower inflation. But that is far too nuanced of an explanation for MMT, which paints in much broader brushstrokes.

Regardless, MMT cannot dispel the hard truths of monetary policy, which is inflation comes from one place — the Fed. When the Fed creates money faster than the real economy grows, prices will rise; it’s that simple.

To alleviate the uncertainty and distortions across the economy of bad policies in Washington, there should be binding fiscal and monetary rules based on sound economics instead of ideology. This should include changing government spending by less than the growth in personal incomes and only changing the money supply to keep prices stable…

Share your thoughts in the comments!

(Excerpt from The Federalist. Photo Credit: Getty Images)

Comments (7) Print

Comments

Leave A Reply

Your email address will not be published.

Pam
February 24, 2022

Inflation is too much money chasing too few goods. Increasing supply to satisfy demand also has tremendous positive effect on lowering inflation. It is no surprise that prices are rising when supply (of LOTS of goods) has been restricted, much by the hand of government and political manipulation.

2
Leonard Nolt
February 24, 2022

Actually much of the inflation is caused by corporations raising prices because they want more profits. Billions have been made during the pandemic by corporate CEOs and other executives and they want to continue getting those massive profits. Of course the working people have to pay. Government spending, unless it’s the excessive military spending that has been going on for decades, actually creates jobs and improves the economy.

1
Barbara Janicki
February 24, 2022

We need to grow the private sector and shrink government and reduce dependence on government – entrusting ourselves to bureaucracy does not end well. Government spending and continuing to spend is causing ever worsening inflation – affecting the average citizen and the poor adversely but not touching/affecting the lifestyles of the rich, global elite. We are called to be good stewards of whatever God blesses us with, our country if governed by Godly principles would follow a different model of government budgeting and programs – cut waste and stop paying people not to work – but that’s part of keeping people dependent on government – prayers for wise, Godly leaders to fill positions in local, state and national government – and for them to apply Godly principles to our nation’s finances – God’s ways are always better than what we come up with on our own. http://www.mtothe5th.wordpress.com

2
Brian Lynch
February 24, 2022

This is all part of the Globalist Elite plan to destroy our nation. Biden is only doing as his handlers- GE minions- are telling him to do. That’s why we are experiencing out- of -control spending, the weakening of the dollar, and over-the-top inflation. You can’t spend your way out of this fiasco. Lord Jesus, You are in control. Please, let events unfold in a way that keeps our nation from being financially destroyed. Satan and his agents of deception are working overtime to try to ruin this nation. By Your grace, please , do not allow this to happen. In Jesus’ name.

13
David
February 24, 2022

What’s “MMT”?

    Pam
    February 24, 2022

    Modern Monetary Theory—and bad, scary theory. I wonder if any of those theorists have ever met a payroll or run a small business. I would call their theories elitist and knowingly, knowingly destructive of private and free market enterprise. The goal is certainly not classic liberal freedom for a moral people.

    1
    Rachel
    February 26, 2022

    Modern Monetary Theory

Partner with Us

Intercessors for America is the trusted resource for millions of people across the United States committed to praying for our nation. If you have benefited from IFA's resources and community, please consider joining us as a monthly support partner. As a 501(c)3 organization, it's through your support that all this possible.

Dave Kubal
IFA President
Become a Monthly Partner

Share

Click below to share this with others

Login to Join the Conversation

Create an IFA account or login to comment, pray and interact with our community.