On Jun 17, 2006, at 7:03 PM, Julio Huato wrote:
> In Latin America in the 1980s, real wages always lagged behind -- yet
> there was a hyper-inflationary spiral. Loose monetary policies didn't
> result from an attempt to shore up the real wage. Workers were on the
> defensive. Can that type of scenario (mutatis mutandis) be excluded in
> the U.S. case? The public finances can get out of hand (are out of
> hand already?) as a result of tax cuts for the hyper-rich and military
> expenditures. So monetary policy may have to relent and accommodate
> for that with an inflationary tax. Why not?
Creditors would get very angry, that's why not. And they have a lot of power.
Doug