Posted 38 days ago
Tech billionaire Elon Musk this week warned that the United States must take steps to address inflation or it will end up like socialist Venezuela.
Musk, who is currently in the process of acquiring Twitter, told a virtual conference that he believes the government has printed too much money in recent years.
“I mean, the obvious reason for inflation is that the government printed a zillion amount of more money than it had, obviously,” Musk said, likely referring to COVID-19 relief stimulus packages worth trillions of dollars that were passed in recent years.
U. S. inflation rose by 8.3 percent in April, compared with the previous year. That’s slightly lower than the 8.5 percent spike in March, but it’s still near the 40-year high.
“So it’s like the government can’t … issue checks far in excess of revenue without there being inflation, you know, velocity of money held constant,” the Tesla CEO said. “If the federal government writes checks, they never bounce. So that is effectively creation of more dollars. And if there are more dollars created, then the increase in the goods and services across the economy, then you have inflation, again, velocity of money held constant.”
If governments could merely “issue massive amounts of money and deficits didn’t matter, then, well, why don’t we just make the deficit 100 times bigger,” Musk asked. “The answer is, you can’t because it will basically turn the dollar int... (Read more)