ESTADOS UNIDOS: POLÍTICA MONETARIA, INFLACIÓN, DÉFICIT Y DEUDA PÚBLICA

Abstract

Inflation, far from being a monetary problem, is more accurately described as a problem of the cost of money in relation to rising prices and economic growth. In an effort to combat inflation, interest rates were set above the rate of price increases, leading to larger government deficits and debt. Consequently, the government must allocate an ever-increasing portion of its revenue to interest and debt payments, at the expense of social welfare programs and development initiatives. This article aims to explain the reasons for the failure of inflation control policies in the United States and why, despite the measures adopted, inflation does not decrease but rather persists, accompanied by ever-increasing deficits and public debt. The hypothesis of this work is that setting interest rates above inflation, as current monetary policy does, far from reducing inflation, actually increases it and exacerbates economic stagnation, deficit, and government debt. The interest rate ceased to be the instrument for controlling inflation and instead became the tool that ensures the payment of the State’s debt, with the negative consequences of causing higher prices, deficit, public debt, and stagnation.