Inflation is like Covid: If it gets loose, it will dominate our politics. It causes great unhappiness but also makes new things possible…

Today’s inflation would be hitting an economy with rigidities of its own, mostly of a different kind. Zoning rules depress the supply of housing; licensing restrictions depress the supply of personal services. Wind and solar mandates tax the reliability of the grid. Means-tested entitlements make it less attractive at the margin for Americans to work.

We may discover other vulnerabilities but two gaping ones weren’t part of the story in the 1970s. In 1977 federal debt was 34% of GDP; today it’s 125%. And the share of Americans who’ve experienced direct government aid has quadrupled. It now comprises more than 50% of the population, and that’s before our vast pandemic spending and Joe Biden’s welfare ambitions.

Which means a lot could go kerblooey and fast. Rising interest rates could double or triple today’s $400 billion interest bill on the national debt. Overnight, this item could rival Social Security and Medicare as the biggest single budget outlay.