Adult-Onset Inflation & Adverse Incentives

“I think the price of doing too little,” newly minted Treasury Secretary Janet Yellen told CNBC yesterday, “is much higher than the price of doing something too big.” Yellen was on tour to promote the Biden administration’s $1.9 trillion stimulus plan. One wonders, then, why stop at a measly $1.9 trillion? Why not make it an even $2 trillion? Or $4 trillion? Since the early days of the pandemic, the word “trillion” has lost any of its shock value. And as CNBC points out, “paying for the various stimulus initiatives is not something administration and Fed officials are focusing on right now.” Here’s how to dance to the inflation tune sure to follow…