Can't stimulate and extract at the same time.

President Ronald Reagan and Federal Reserve Chair Paul Volcker "placed a priority on curbing inflation and managing the pace of economic growth by adjusting the cost of private borrowing rather than spending public money," wrote Matthew Boisier. "The pandemic cast those conventions aside around the world. In the new economics, fiscal policy took over from monetary policy. Governments channeled cash directly to households and businesses and ran up record budget deficits." In this years Union budget Finance Minister Nirmala Sitharaman promised to increase spending on healthcare, infrastructure and procurement of agricultural produce at the cost of increasing fiscal deficit to 6.8% in 2021-22, Times of India (TOI). Fiscal deficit in the last financial year was estimated at 9.5%, by accounting for 'off budget' spending, which is a financial sleight of hand, in which the government asks public sector companies to borrow, thus hiding its own liabilities, Business Today. Though the 2020 budget was conservative, this year's budget "marks a bold break from the past. Not only is it big on what was once considered leftish profligacy, it brushes aside a stiff fiscal law enacted in 2003," exulted an editorial in the Mint. Using government figures of spending and predicted GDP growth rate, Roshan Kishore calculated that "the 2021-22 budget entails a negative fiscal stimulus to the economy". "There is an additional problem with what is a premature withdrawal of the fiscal boost. A lot of sequential recovery, especially in rural areas, was contingent on the government's support. This has been withdrawn in a big way," Hindustan Times (HT). There may have been a somewhat V-shaped recovery from last year's lockdown but it will not happen this time round, wrote Andy Mukherjee. Because, "There's no sign of a meaningful income-support program to put purchasing power in the hands of battered households dealing with double-digit unemployment even without a national shutdown. Meanwhile, savers are being forced to accept deposit interest rates that are barely covering half of their inflation expectations. In other words, India is witnessing a huge shift in resources away from the ultimate providers of labor and capital, towards borrowers: companies and the government." "State bank of India (SBI) economists on Tuesday sharply slashed their FY22 GDP growth estimates to 7.9 percent -- the lowest among all analysts -- from the earlier projection of 10.4 percent," Business Standard. "Can we really assume, given shaken customer confidence post-second wave, that there will be another big round of revenge shopping? Can we assume any industrialist will be ready to bet on a big capital expenditure when he/she confronts so much that is currently unknowable?" asked Saubhik Chakrabarti. "In other words, the best time for big, out-of-budget spending is now," TOI. Instead of providing more cash to people the government sucking money out of our pockets through soaring taxes. "State oil companies raised the prices of petrol and diesel again on Tuesday, the 17th hike in a month," Economic Times (ET). "In Delhi, the petrol price of Rs 94.49 per litre on Tuesday included Rs 54.71 of taxes. Diesel's price of Rs 85.38 included a tax component of Rs 44.3." "Gasoline prices in India's financial capital of Mumbai have risen past the Rs 100-a-litre mark for the first time ever, among the costliest in the country and almost twice the price in new York," ET. In the US, the consumer price index (CPI) was 4.2% in April from a year earlier and core CPI, excluding volatile food and energy prices, rose to 3%, CNBC. "There's a heated debate over how big of a risk inflation is," wrote Boisier. In India the Wholesale Price Inflation (WPI) jumped "to an 11-year high of 10.5% over the year-ago period", and "Even the headline numbers could start rising as commodity prices get passed on to consumers," wrote Prof Puneet Kumar Arora. If the US starts raising rates the rupee will drop and prices will shoot up, warned Prof Alok Sheel. "You ain't seen nothing yet," as Ronald Reagan said. Scary.