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News Link • Economic Theory
Milton Friedman on Inflation: A Government-Made Disaster
• https://news.bitcoin.com, by Jamie RedmanMilton Friedman famously argued that only the government can create inflation, and misguided policies, like price controls, worsen the problem.
Friedman Famously Said: 'Inflation Is Made by Government and No One Else'
Milton Friedman, a leading figure in economics, repeatedly emphasized that inflation is a result of government policies, particularly the creation of money without corresponding production increases. Inflation occurs when the government increases the money supply, devaluing the currency and causing prices to rise across the board. According to Friedman, "Inflation is always and everywhere a monetary phenomenon," a direct outcome of government mismanagement.
"Inflation is made by Government and no one else," Friedman said in September 1974 during a keynote speech. "Of course, no Government likes to accept responsibilities. . . responsibility for its own defects, so Governments of course blame greedy businessmen, grasping trade unionists, and spend-thrift consumers. No doubt businessmen are greedy; no doubt trade unionists are grasping; and everyone knows that housewives are spendthrifts, but neither the greedy businessmen nor the grasping trade unionists nor the spendthrift housewives produce inflation."
The economist added:
The reason they do not produce inflation is because none of them has access to a printing press on which he can turn out those lovely, or some people think not so lovely, pieces of paper with which you purchase goods and services.