Thread by @jasonfurman

In 2009 critics of the ACA made a lot of arguments but I don't recall any of them being that it would cause inflation.

Same thing in 2017, the TCJA threw a lot of money into an economy that many thought was at/close to full employment, but none of the critics argued inflation.

I've been debating different fiscal proposals for the last twenty-five years. And in virtually none of them was inflation an argument for or against it. For good reason--over the medium-term it is largely a monetary policy responsibility (with one caveat below).

In fact I can't remember a fiscal debate from the 1980s through the American Rescue Plan in which inflation figured in a meaningful manner, whether it was budget cuts or budget increases.

Inflation was a legitimate question to debate in the context of the American Rescue Plan because it spent so much money so quickly.

But normally the Fed has lots of time/ability to offset any *undesired* inflation.

That is the caveat: IF the Fed is incapable of getting inflation up to its target then fiscal policy could actually help by strengthening demand.

It is a heads you win, tails you don't lose bet: if secular stagnation is true the extra demand helps, if not the Fed can offset.

(Note, the above even more true to the degree that the fiscal policy in question increases the economy's productivity capacity and/or is paid for.)

And yes, I have a mostly conventional view of the respective roles of monetary and fiscal policy, with the former playing the lead countercyclical role and the latter critical when the former is constrained due to the zero lower bound or inability to achieve broader objectives.