Trillions of dollars conjured up from nowhere sent asset prices into the stratosphere. When central banks threw the rule books out the window 15 years ago in a bid to stave off a catastrophic financial system meltdown, they inadvertently laid the foundations for many of the problems we now face. Much of the conventional wisdom on the price spiral has been thrown into disarray primarily because inflation was only reawakened after more than a decade of unconventional economic management in the wake of the global financial crisis. Right now, there's never been more confusion and argument about how best to navigate our way through the inflationary crisis that has gripped the globe.

The rental crisis, for example, has a far easier fix.

Those defending the strategy will argue that given the government is about to deliver a surplus, it will be taking money out of the economy, which is deflationary, and that the relief package is merely redistributing cash to those areas in desperate need.Īnd not all problems are solved with government spending. When he outlines his bold plan, in his first full federal budget, it will fire a debate about whether we are providing a cure for the nation's ills or merely kicking the can down the road.Īnyone schooled in neo-classical economics will tell you that spending is spending, no matter how you spend it, and that spending ultimately is inflationary. But opinion elsewhere is far from unanimous. Is it possible for a government to dole out $14.6 billion and not stoke the inflation fires?įederal Treasurer Jim Chalmers thinks so.

Fire and Water by Andrew Grey