I didn’t hear Republican legislators grousing about all the free money the Governor handed out to her business pals from last year’s federal stimulus money. But that money propping up South Dakota’s chronically welfare-dependent economy is coming from a Democratic Administration, Senator Jim Bolin (R-16/Canton) has to find some way to portray federal stimulus dollars as a mortal threat. The new bogeyman—inflation!
We gotta use this money wisely. I don’t mind telling you I’m deathly afraid of major inflation coming in the future. I’m very very concerned about that [Sen. Jim Bolin, transcribed from audio, “SD Legislators to Decide on More Federal Funding,” WNAX, 2021.05.21].
Hmmm…the federal stimulus that got us out of the Great Recession and plugged holes in Mike Rounds’s budget back in 2008 and 2009 didn’t trigger deadly inflation. The federal stimulus poured on so far amidst the coronavirus pandemic appears to have sparked savings, not inflation:
Some of the stimulus money sent to households was stashed away, hoisting the saving rate to 20.5% from 13.4% in December.
“We expect an additional stimulus package passed in March to raise the savings rate further, adding to a powerful tailwind of buying power that has been building among U.S. households, ready to be deployed as the economy is reopening,” said Ellen Zentner, chief economist at Morgan Stanley in New York [Lucia Mutikani, “Fiscal Stimulus Fires up U.S. Consumer Spending; Inflation Benign,” Reuters, 2021.02.26].
Consumers may take this round of stimulus and save it up, just as the Legislature may do—the WNAX article mentions that the Legislature can bank the current stimulus dollars to spend through 2024. Such savings would further mute the inflationary pressures that Senator Bolin seems to be reading from old econ textbooks that don’t consider the empirical data of the last couple decades.
Senator Bolin himself is not so filled with mortal dread that he won’t fill our pockets with federal cash:
But if we don’t use the money ourselves, it just goes to another state, and we’re not gonna benefit from it [Bolin, on WNAX, 2021.05.21].
Even among South Dakota’s GOP malarkey-artists, fiscal pragmatism still wins out over partisan posturing.
If inflation goes up, Bolin will die? Here’s to inflation. I’m just kidding Jim, I always liked Canton, Sioux Falls small towners do too.
Mr. Bolin is right but doesn’t take it far enough. The good young Governor Noem should send the money back to the feds and thumb her nose at them.
Well…its a balancing act of supply (of goods and services) and demand (cash and credit)…When you have more cash and credit in the economy than goods and services to sell, you get inflationary pressure and high prices for certain highly desirable goods and services. This may happen as the supply chain was disrupted by Covid and some highly desirable items are scarce. As goods and services become more available prices will fall and inflation will be tamped down. What is the problem with folks holding on to their cash to spend later on big ticket items? Doing so will not only slow inflation it will slow hiring and the reinvigoration of the supply chain and prolong a sluggish economy. Which we saw under Obama and which wasn’t a bad thing. We just slog along, but its not peaks and valleys. Its not good for the “last hired, first fired” among us.
I agree with Grudz. Drain the general fund and send it all back. Close Ellsworth, too. Close the airports on subsidies. Give the Black Hills and all federal lands in South Dakota back to the tribes.
I, too, am concerned about inflation, but I’m concerned from the other way. We have had a very low inflation rate for decades, the result of stagnate wages and standards of living for most of us.
I agree with Mr. Pay regarding stagnant wages. People, in general, have gotten too used to entitlements and that makes them lazy and used to riding the gravy train. They need to be motivated to get back out there and work, and work harder if they want to raise their standards of living.
Grudz, what made you the lazy boy you are. Trust fund?
Well, the country is going to be completely run and worked by robots so what really is the incentive for a work force? I think that lots of “entitlement” folks are seeing that that is going to be their only future so why bust your butt to fight that system. They are seeing that the only ones that will get ahead in this country are not the have nots but the haves. Only those with nearly all the money now, are and will, be allowed to get more wealth in the future. Their only future is UBI.
Just as capitalism doesn’t work without socialism, Northern Mississippi magats can’t grift without federal largesse.
If we’re worried about all that money causing inflation, we could stockpile it until 2024 and wait out the inflationary bubble Bolin fears…but then that money would lose value unless Kristi is able to sock it away in a really good interest-bearing account. And then the inflation would just hit anyway.
And inflation-schminflation—who cares? Are we really supposed to sit around and not hire people to build roads and wind towers and never pay current workers a living wage because those workers will buy more stuff and maybe drive up prices? Are we really supposed to trade an economic abstraction for the need to build things, feed people, and keep the country working and growing and modernizing?
Why couldn’t they just stick it with the council of investors who return the highest yields in the nation on our trust funds, earn a bunch of money, then send it back to the feds in 2024 like Mr. H suggests and pocket all the gravy? That’s probably what they will do.
“Money is tight” as Governor Noem so eloquently stated and I’ll bet Bolin agrees with her. BUT her brothers raked in nearly $1M in tariff and covid FREE government socialist handouts. Since 1995 the Noem’s family has raked in over $5.2M in FREE federal subsidies and grants, enough to buy as around 2,000 to 4,000 acres, depending on which time frame. Another one of Noem’s famous quotes is “Socialism is killing this country”. The hypocrisy is so thick that it is CREEPY….honest Capitalism, which is no longer honest, has morphed into socialist welfare for the already wealthy. In no way is this good long term for the country. It only benefits those who already have control over the land and freedom lies in ownership of the land. So much for economic justice….more and more land is being owned and controlled by less and less people and “government”, that is self benefitting lobbyists, are helping this to happen. So for this to even out the flow of socialist government money has to flow the other way or the other solution would be for the wealthy recipients of all that FREE socialist government money to pay back all the handouts.