BlutoSays wrote:"My response was to send money to the people so they can afford the inflation, which will allow corps to buy and import more oil and food to provide more supply. Which should stop the inflation."
The federal government made easy money available for college tuition. What happened? The schools jacked up the prices to soak up all that easy money.
The federal government made easy money available for health insurance. What happened? The medical providers jacked up the prices to soak up all that easy money.
College education and medical care are among products/services that have risen the most in cost in the last decade.
Explain the mechanics by which your idea will stop the inflation?
For once, you ask a good question.
First off, more supply should according to economic theory stop inflation because of competition between corps, as buyers shop for the cheaper provider. You are correct that the US may have its market too monopoly controlled.
So, 2nd, the Gov. would need to step in a freeze prices, like Nixon did in '71. The current prices are high enough that the oil corps would still be making money if the wholesale price rises a little. If it rises a lot the Pres. can demand they sell at a loss to suck up the excess profits they have been making for the last 2 years.
The law may have changed since Nixon in '71. The Dems control the Senate, if they nix the filibuster, then they can change the law.
If you say that a single Dem is enough to keep the Dems from doing this, I reply that a single Dem can block the stimulus checks, too. The fact that is may not be possible politically, really doesn't make my idea bad economically. It just shows how dis-functional the current situation is. That is, anything other than the Fed raising or lowering interest rates is politically impossible. Or, this seems to be so. Maybe the Pres. can use executive power (maybe the Defense production act) to do something.
This is sort of like my suggesting that WWII style rationing is the answer to global warming, aka ACC. It would work, when all economic fiddling will fail. The problem is that it will never pass Congress, because the emergency is *not* obvious enough yet, and later it will be too late. So, does this make humanity doomed? I hope not, but fear that it is so.