Yellen Says Inflation “Not All Bad”

While admitting that “7.5% inflation is concerning,” Treasury Secretary Janet Yellen insisted that “it's not all bad. Things would be worse without it.”

“I can understand how the average consumer might be worried that rising prices will negatively impact their standard of living, but the erosion of the purchasing power of the US dollar also has its benefits. To most ordinary people the government seems an all-powerful master of its situation. What they don't realize is that the government is the biggest debtor in the nation.”

“The declining purchasing power of dollars means that we can pay back our debt with cheaper money,” Yellen explained. “In just the last year alone the dollar we borrowed can now be repaid at 93 cents. This shifts more of the burden of supporting the government to persons wealthy and foolish enough to buy our bonds, notes, and bills. Meanwhile, the subsidy checks we have mailed out to select recipients will help them pay higher prices and bolster their approval of the Biden Administration. I'd call this a 'win-win' situation compared to the alternative of honestly honoring our debts and allowing people to keep a larger share of the money they earn. The genius of this strategy will be confirmed when Democrats win the November elections.”