THE ROOTS OF STAGFLATION

Mad Money: How to Fight the Inflation Tax
Sita Nataraj Slavov | Peter G. Peterson Foundation
Sita Nataraj Slavov considers the impact of the current macroeconomic environment on fiscal policy, the federal debt, and individual well-being.

Steven B. Kamin examines the current state of the US financial system and says that although the US seemingly faces an inevitable financial crash, there is a middle way.

If you think the federal deficit is bad now, you're in for an unfortunate surprise, because it's only going to get worse. Mark J. Warshawsky finds that the 2023 deficit will come in at 6.4 percent of gross domestic product, nearly 70 percent higher than the Congressional Budget Office's projection. ​

James Pethokoukis responds to critiques of “neoliberal globalization” and addresses populist praises of a "new, postliberal paradigm." Michael R. Strain praises Liz Truss for rejecting populist economics of grievance and instead opting for a policy centered on growth, opportunity, and personal responsibility. Pethokoukis explains the importance of productivity growth and demographic change and considers their implications for economic growth in India, China, and the United States in the coming century.

James C. Capretta breaks down key market-based reforms that would make the American health care system more efficient—by providing patients with high-quality care while incentivizing providers to keep their costs low. Andrew G. Biggs analyzes the Social Security Administration's recent announcement that retirees will receive a cost-of-living adjustment of 8.7 percent and how this doesn’t bode well for Social Security's long-term future. Considering how inflation has made health care even more expensive for many Americans, Brian J. Miller says policymakers can lower health care costs for patients without increasing government spending by giving hospital markets a dose of competition.

Are We Faced with a Choice Between a Financial Crash Soon or a Financial Crash Later?
Steven B. Kamin |  International Economy Magazine
 
The US financial system faces two critical risks: The first is that the Federal Reserve will be forced to sharply tighten monetary policy in response to continued elevated inflation, and the second is that it won’t. Given the current state of the financial system, the US seemingly faces a choice between a financial crash soon or a financial crash later. But there is a middle way. Assuming inflation and output evolve as currently expected, Steven B. Kamin says, the Federal Reserve should plan on taking the policy rate back to neutrality within the next two years.