Inflation is still low...(and "doing nothing" to reduce deficits)

According to Friday's Consumer Price Index, core inflation (which excludes food and energy prices because they are subject to sharp and often short-term spikes, driven by events external to the economy, that tend to obscure overall inflationary trends) rose slightly less than expected and remains low. (Via "NYTs Economix.)

This is important to underscore because anti-stimulative agendas that are fundamentally ideological or political often come cloaked in inflation alarmism.

Historical inflation comparison chart, including the past 12 months.  NYT's "Economix"

In the words of the New York Times' economics reporter, David Leonhardt, "The recent signs of economic weakness remain a much bigger risk than inflation."

The point is that economic policy must be about promoting jobs and growth rather than controlling a largely imagined threat of inflation - that is, if it's "serious."

Also of note, the NYTimes' Leonhardt had a column worth reading this past week that explains the "do nothing" approach to deficit reduction.  While it runs counter to "conventional wisdom" of the punditocracy, embracing the potential of "partisan gridlock" by simply "doing nothing" and letting the Bush tax cuts expire, as they will in 2013 within the framework of existing legislation, would solve 75% of the deficit problem over the next 5 years and 40% of deficits in the 20 year projections. This "do nothing" approach - especially given the extreme partisan obstructionism of the congressional GOP - should become the "baseline scenario" for any further discussion of deficit reduction, rather than the alarmism of far-right ideologues intent on using deficit fears as a club to kill Medicare and Social Security.