Busting the Inflation Myth

A key component of the Neoliberalism virus has been to spread the fear of inflation. Even people who have no interest in Economics as a subject have imbibed the idea that money spent by government is ‘ inflationary ‘ . This has been one of the spectacular successes of the virus . Why is it a spectacular success ? Because it has completely undermined trust in government and by extension, democracy in almost every country that calls itself a democracy. So if any of these governments says this or that programme is ‘ unaffordable ‘ the public believe it. That’s ironic isn’t it. On the one hand people don’t trust government in general, but on the other they trust government when they are told there’s a shortage of money. The Neoliberalism virus thrives on this ironic situation and the control over the public mind. How did such an improbable belief that there is always a shortage of money for government to spend come about ? We have to go back nearly forty years to a lady and her handbag . That lady was Margaret Thatcher the British Prime Minister throughout the 1980’s and it was she who assiduously inculcated the idea that just like a household a government has to ‘ live within its means ‘ whilst never once offering any analysis of this comparison. Why ? Because it was phoney. But the public bought it as did every economics and financial journalist as well as many economists who trotted out various forms of the mantra dressed up to sound ‘ academic ‘. Mrs Thatcher had only to say something was unaffordable and inflationary and the die was cast and that has remained the case until the new Coronavirus appeared . Now both the unaffordable and inflationary are suddenly affordable and not inflationary and no-one is questioning this about turn .

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