In an unusual Wall Street Journal op-ed Dec. 16, Kevin Warsh, who served as a Federal Reserve governor in 2006-2011, accurately described the money-printing aspect of the real cause of the current hyperinflationary threat—though he did not discuss the Green Deal disinvestment in productivity. Warsh’s piece was titled, “The Fed Is the Main Inflation Culprit.”
“To date, the Fed has acted as an enabler,” Warsh wrote. “The Fed bet on a new policy regime to get inflation higher. It worked. It’s not the first time a central bank wanted a little more inflation and got a lot more.
“Last year, in another break with precedent, the Fed loudly and explicitly endorsed a blowout in federal spending. Congress swiftly agreed. Federal spending increased from an average of about 21% of gross domestic product in the prior decade to more than 30% in Fiscal 2020 and 2021. National debt relative to GDP increased from 79% in 2019 to more than 100% today. Most troubling, the Fed bankrolled the fiscal profligacy, purchasing more than half of the new Treasury debt issued this year. Call it monetary dominance.
