QE would have caused inflation, if it weren’t for Obamacare
Yesterday it was the inability to admit that austerity does not promote growth. Today the failure of Monetary Policy to cause HYPERINFLATION! is Obamacare. In a debate between the two, Paul Krugman and Alan Meltzer predicted different outcomes from Fed policy. Now the results are in and Krugman notes:
So here we are four years later, the huge expansion of the Fed’s balance sheet has not, in fact, led to inflation. And Meltzer is puzzled by the fact that all those bond purchases just sat there:
“The answer, he [Meltzer] said, is that the obstacles to faster economic growth are not mainly monetary. Instead, they lie mostly with business decisions to invest and hire; these, he argued, are discouraged by the Obama administration’s policies to raise taxes or, through Obamacare’s mandate to buy health insurance for workers, to increase the cost of hiring.”
He made a monetary prediction; I made a monetary prediction; his prediction was wrong. Therefore, it must be because of Obamacare!