Spending

Can the government bring down the high cost of living by spending money? According to Chat GPT the government can do this by subsidizing things like food, fuel, electricity, public transportation and healthcare. Here is a quote from democratic house leader Jeffries: This administration somehow found the resources, has found billions of dollars for bombs but can't find any money to actually bring down the high cost of living here in the United States of America," Jeffries said. Economist say that too much government spending is one of the main causes of inflation. Putting subsidies in the hands of consumers, increases the demand for goods and that drives up prices. The key is too much. Many politicians think they can increase spending just the right amount, so as to not increase inflation. During the Biden years the spending was too much too fast and inflation spiked to nine percent. As far as Jeffries remarks go, so far, the government spending on the war has been part of the Pentagon budget and will not cause inflation. If that is surpassed and the government starts to borrow to cover the war cost, then inflation will rise. One way to accomplish what Jeffries is suggesting is to move money from defense spending to social spending, what is called in Econ 101, spending on butter rather than guns. This can be done in next years budget but not in this year’s, which has already been set.