Independence Day celebrations will wind down shortly, but many officials in Washington, D.C. want to continue the party. They propose massive displays of pyrotechnics, never seen in the United States except in wartime. Washington’s fireworks, of course, are in the form of huge budget-busting government spending.
Monetary and fiscal issues normally have been somewhat predictable, but more than a year of Covid turmoil has jettisoned predictability right out the window. Further, Congress and the Federal Reserve, charged with controlling government spending and monetary policy, seem to have abdicated that control. Their absence raises difficult questions for investors. This issue of Viewpoint seeks to provide very tentative answers.
- How large will federal government outlays be in the coming years?
- Will tax increases be used to fund this spending? If so, who pays and how much?
- What impact will significant spending increases have on economic growth in late 2021 and beyond?
- What are the implications for inflation, and will be the Federal Reserve honor its mandate to control inflation?
Read more, here.
About the Expert
Thomas Goho, Ph.D.
Former Chief Economic ConsultantThomas Goho, Ph.D. is formerly the Chief Economic Consultant for Stephens Inc. He also served as the Co-Director of Stephens University at Wake Forest University.