Greg Mankiw, writing in the Gotham Litter Liner, musing about inflation:
"Second, the Fed could easily overestimate the economy’s potential growth. In light of the large fiscal imbalance over which Mr. Obama is presiding, it’s a good bet he will end up raising taxes for most Americans in coming years. Higher tax rates mean reduced work incentives and lower potential output. If the Fed fails to account for this change, it could try to promote more growth than the economy can sustain, causing inflation to rise."
It's a good read. He ends where I have been for the last while - that we are in uncharted territory here.
History teaches that demand and supply will always meet. I believe we are in a Monopoly Money economy already.
Who will kick the board, and when?
(via Instapundit)
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