What replaces the 60/40 split?

The issue is even deeper. Labour's share of national income has been on steep decline for about two decades. Labour costs are held in check by cheap imports and declining domestic production in conjunction. This is ongoing --- just look what happened to Amazon workers in the recent vote to unionize.

The loss of jobs during the height of the pandemic were mostly in lower wage industries ( food +beverage) tourism, So many of these workers have no skills that are needed in the labour short industries.

The Fed thinks it can let the air out of the bubble very slowly. It believes it can just change its QE program to let the air out. It remains to be seen that that is true

Europe continues to be very tight fisted when it comes to government spending. There appears to be no change in that direction at all.

Arthur an excellent analysis of why inflation will be more like a spike in prices rather than a sustained increase in the price level. Yet I've never seen such a groundswell of opinion that is all one-sided. There's no historical record to sustained that view or that compares to what's happened during the pandemic. So it is a mystery to me how they come about with such strong growth forecast and inflationary fears. I think the FED has a better grasp of what likely happen than the Wall Street consensus. However that narrative will not die so soon and we can expect it to go on until proven wrong.

Housing costs are more related to the price of land. Land does not appreciate and is different from housing on the land which does depreciate. This complicates the measurement of housing costs per se.

Very few talk about the collapse of velocity. Yet it is so pronounced as to completely offset anything on the monetary base.

My pleasure

I fully agree. We had the same situation in Canada where money was shoved out the door indiscriminately. I think govts just panicked and took no time to take the measurement of those in need and those not. I think govts believe that the pandemic would be short-lived and everyone who lost a job would get it back soon, so just helping temporarily was all that was needed. Now, we know better and the longer term consequences are just starting to sink in.

The Federal govt in Canada has not indicated it will adopt a similar policy that Biden is proposing--- indiscriminate handouts. We are all a little wiser.

I never thought it was a question of balancing health against the economy There should be no trade off. A sick population gives rise to a sick economy