Brian Sack's get cart and horse backwards

Here he talks about how successful the Fed has been in funding Congressional debt.  Brian is the NY Fed official in charge of buying Treasuries.

Rather than pick apart his nonsense, let me point out a few things.  The Fed is funding Congressional debt because foreign buyers are increasingly unwilling to do so.  The rise in Treasury curve steepness reflects foreign unwillingness to fund, Congress has to pay higher longer term rates than shorter term rates because Congress is becoming more likely to default somewhere down the road. Foreign lenders have better opportunities.

As in Tyler Cowen's  Great Stagnation, there is much better growth in developing nations not stuck with a 30 year backlog of political promises that need sorting.

David Leonhart gets it wrong. He thinks the problem is a deflation-inflation battle.  No, the problem is fewer and fewer of us are willing to fund Congressional debt.  The large states that normally subsidize Congress are bankrupt, the Chinese have better things to do, and the consumer was always unwilling fund Congress.  Brian Sacks and the printing press is the funder of last resort for Congress.  The effect may not be inflation the effect is more likely deflation as the private sector shrinks in the face of Central Government expansion.

Let me point out, when oil prices get high, we quit buying it, we contract the economy.  So forget the inflation/deflation thing, we are in a severe constraint thing.