There is only one way to strengthen the recovery: To reduce structural imbalances by regaining budgetary sanity and implementing serious measures to attract capital. To fall back into propagandistic optimism would be a mistake.
The 1920s featured political détente, debt liquidations by prior consumer price inflation, an introductory stalling of monetary inflation, a German economic miracle, and a broad-based technological revolution. The 2020s have none of these.
The worst excuse of all is that “there is no inflation.” It’s like driving a car at 300 miles an hour on the highway, looking in the rearview mirror and saying, “we haven’t killed ourselves yet, accelerate.”
The French economist Jacques Rueff was the foremost opponent in the twentieth century of the gold exchange standard. He well described how the Bretton Woods enabled the US government to engage in seemingly endless deficit spending.
It is often claimed that inflation reduces the true burden of debt. This is true for existing debt, but those who advocate it as a remedy for government indebtedness fail to understand that it also increases the cost of the government’s future debt.