It is unlikely Fed will raise rates enough to quell inflation.

 ARE WE ON OUR WAY TO ADOPTING MODERN MONETARY POLICY?

GOAL MAY BE TO CONTROL ECONOMY THROUGH TAXES RATHER THAN INTEREST RATES

Yesterday the Federal Reserve raised interest rates .75 %, this was the biggest interest rate hike since 1994. It is too little to have much effect on inflation, but will have an effect on economic growth. The sad truth is that the Federal Reserve no longer has the option to raise interest rates to control the economy. With a federal debt of $30 Trillion and growing, every interest rate increase, increases the payments by the treasury to service this debt. Of course, they don't all increase at once, but all new debt going forward will be much more expensive than the past.

Keynesian economics, which has been the policy for the last 80 years and especially since the decoupling of the dollar from any restraint by its backing from gold and silver. It was a failed policy then and it will likely be replaced by an even greater threat to everyone's freedom and prosperity in the future. This policy continually devalued the dollars purchasing power ever since its inception. 

The idea was that the economy would be controlled by the raising and lowering of interest rates and the economy could be stimulated by deficit spending. An idea that most politicians found favorable, since they could spend without restraint of a balanced budget, buy votes from different groups and paper over their abuse with a constantly lowering the buying power of the currency. The Federal government has not balanced the budget since 1969.

Originally all money was an asset, this policy made the dollar an instrument of government debt. Many predicted that this trend could not continue indefinitely and it is likely we are now at that time. When you see near zero interest rate for over 12 years you should have seen there is trouble brewing. 

Modern Monetary policy believes debt, budgets etc are relics of the past. The adherents believe that all economic activity should be controlled by government spending and taxes. So, spend as much as possible to keep the economy humming by spending on social programs, infrastructure spending, subsidies to prefered sectors and to keep it under control raise taxes on either everyone or on anyone who should be making what the government considers excess profits. The first act we are likely to see is an excess profits tax levied on oil companies by the Biden administration. They seem to believe they can accomplish this through executive action, we will see.

In, effect Modern Monetary policy is totalitarian government, were the government will control every aspect of the economy, by either subsidising the favored and taxing out of existence the less favored. It is Un American, unconstitutional and will result in the end of this great experiment in liberty and freedom.