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Fight Inflation With Growth, Not Austerity

All across the political spectrum, nearly everyone has the story of how to fight inflation all wrong. Please read the Wall Street Journal piece today by CTUP cofounders Arthur Laffer and Stephen Moore which argues that to fight inflation, we need growth, not a shrinkage of the economy.

With the right set of supply-side deregulatory and tax-cutting policies, inflation can be brought down without a loss of jobs or a recession (though Biden’s policies have already put us in a soft recession right now). The Fed and Larry Summers are wrong on this point.

This idea that reducing inflation will put more people in the unemployment lines is the old discredited theory of the “Phillips Curve.”  Below we show the (in)famous original chart that gave birth to this idea of a trade-off between inflation and unemployment.

Here is the scatter plot for the last 40 years of unemployment and inflation.

Virtually no relationship.

Growth, jobs, and prosperity will bring down prices.

Unleash Prosperity Hotline


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