If you want to understand taxes, inflation, spending and interest rates, you should know the difference between fiscal policy and monetary policy and the advantages and disadvantages of each. The emerging problem with inflation and the probable response of hiking interest rates reminds me of watching congressional hearings on the prime rate when I was in grad school studying economics at Georgetown University. It saddened me to watch a businessman testifying and alternately yelling and crying because he couldn’t afford working capital loans any longer. This was a grown man. At that time, the prime rate had peaked to nearly…...
Fiscal Policy v. Monetary Policy
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