The Myth Busting Economist by Larry Malone
So Where Did All of the Inflation Come From?
Last time, we saw how our National Debt ballooned to $33 trillion from the $6 trillion spent by the Trump Administration and $3 trillion by the Biden Administration for the COVID rescue. The unprecedented spending definitely helped create an inflationary economy.
But inflation already had a foothold from Trump’s Tax Cut and Jobs Act which, starting in 2018, injected $2.3 trillion into an economy with a 4 percent unemployment rate. Economists take 4 percent as full (normal) employment, since there are always some people choosing part-time or seasonal work and others taking time away from the workforce. That’s why putting a large corporate tax cut into a thriving economy (something never done before in the United States) will create inflation.
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