... It was not ultimately budget deficits that allowed Kennedy to initiate
the corporatist planning and militarization of the U.S. economy that bore first
fruit in the emergence of the American welfare-warfare state during Johnson’s
Great Society and culminated in Nixon’s fascist New Economic Policy. The policy
that facilitated Johnson’s simultaneous financing of extravagant expenditures
on welfare programs and the military adventure in Vietnam and made conditions
ripe for Nixon's imposition of wage and price controls was not newfangled
functional finance but old-fashioned monetary inflation. As the historian of
macroeconomic policy, Kenneth Weiher, has pointed out, it was not the
much-vaunted “fiscal revolution” but the overlooked “monetary revolution” that
took place during the Kennedy administration which turned out to be the
predominant influence on the economic events of the 1960s and 1970s. As Weiher
stated: “There was a revolution all right, but the most important change
occurred at the Federal Reserve; however, 10 years passed before more than a
handful of people caught on to what was happening.”....To Read More.....
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