In public and private Nixon turned the pressure on Burns. William Greider, in his book, Secrets of the Temple: How the Federal Reserve Runs The Country, reports Nixon as saying: "We'll take inflation if necessary, but we can't take unemployment."22 The nation eventually had an abundance of both. Burns, and the Fed's Open Market Committee which decided on money creation policies, soon provided cheap money.

The key money creation number, M1, which is total checking deposits, demand deposits, and traveler's checks, went from $228 billion to $249 billion between December 1971 and December 1972, according to Federal Reserve Board numbers. As a matter of comparison, in Martin's last year, the numbers went from $198 billion to $206 billion.23 The amount of M2 numbers, measuring retail savings and small deposits, rose even more by the end of 1972, from $710 billion to $802 billion.24

It worked in the short term. Nixon carried 49 out of 50 states in the election. Democrats easily held Congress. Inflation was in the low single digits, but there was a price to pay in higher inflation after all the election year champagne was figuratively guzzled.5

In the winters of 1972 and 1973, Burns began to worry about inflation. In 1973, inflation more than doubled to 8.8%. Later in the decade, it would go to 12%. By 1980, inflation was at 14%.5 8 Was the United States about to become a Weimar Republic? Some actually thought that the great inflation was a good thing.

The Bottom Line
It would take another Fed chairman and a brutal policy of tight money—including the acceptance of a recession—before inflation would return to low single digits.25

 But, in the meantime, the U.S. would endure jobless numbers that exceeded 10%.3 Millions of Americans were angry by the late 1970s and early 1980s.

Yet few remember Burns, who in his memoirs, Reflections of an Economic Policy Maker (1969-1978), blames others for the great inflation without mentioning the disastrous monetary expansion. Nixon doesn't even mention this central bank episode in his memoirs. Many people who remember this terrible era blame it all on the Arab countries and oil pricing. Still, the Wall Street Journal, in reviewing this period in January 1986 said, "OPEC got all the credit for what the U.S. had mainly done to itself."

Ronald Reagan's policy was based around tax cuts, deregulation, welfare cuts, and tight monetary policy. These were intended as remedies for the two main economic problems of the 1970s — slow growth and inflation, together known as “stagflation”. In theory, in almost any economic model, cutting taxes make the economy more efficient, increasing growth atleast temporarily. The late 80s and 90s were good years for American incomes and the 90s and early 00s were good years for productivity. How much tax cuts and deregulation had to do with that is up for debate, and how much the country benefitted from reduced inflation is also arguable. Though Reaganomics wasn't working by 2000s-10s. Bush's tax cut didn't boost business investment.

Enter Bidenomics, it took covid to realize that the earlier approach wasn't working. 3 main focus areas - Cash benefits, Care jobs & Investment. Biden made it explicit that care jobs for disabled and elderly would be the strategy for mass employment. GI/GDP has fallen from peak 0.07 in 50-60s to 0.04 in 2020, the investment plan aims to revive GI. It also focuses on - modernized electrical grid, a network of charging stations, and lead removal are not things the private sector is likely to do (or do enough of) on its own. Very little of this investment program relies on indirect investment incentives like capital gains tax cuts or depreciation allowances - it doesn't passively push towards an outcome but rather actively.
New research is also coming up showing that unconditional benefits don't usually stop people from working.