Deficits Are Not What They Use To Be

How do government deficits affect the economy in 2020? We need to look at how we see the entire concept of deficit spending as compared to before the Great Recession.

Before the Great Recession, I and many others believed that deficits contribute to inflation. The Fed creates excess dollars to buy government debt. It was assumed that this would crowd out private market borrowing. That along with too many dollars chasing too few goods would result in an inflationary spiral.