Steve Keen vs. the Inflationistas

Here's Steve Keen's take on inflation and the current state of the economy...

 

His summary: 

Inflation hit 9% in 2022. Everyone panicked. Today it's 3.4% and the [federal] deficit is bigger than it's ever been.
So let me get this straight. 
The government is spending more than ever, Trump is throwing half a trillion extra at the military, DOGE collapsed before it even started, and inflation went down?
"Budget deficit equals Zimbabwe." That's the logic you'll find in every economics textbook on the planet.
I've been calling it bollocks for 30 years and the numbers keep proving me right.
Here's what actually happened.
All that deficit spending landed in people's bank accounts.
Not in some abstract financial black hole.
In actual accounts where actual people used it to buy things, hire workers, build AI data centres, and keep the economy turning over.
That's what government spending does. It creates money in the private sector. It doesn't steal from it.
Elon Musk showed up promising to gut the whole thing. Slash spending. Balance the books. Save America.
He came, he went, the deficit got bigger, and the economy kept going. Funny how that works.
The crowd that screams hyperinflation every time a government runs a deficit has had four straight years to be proven right.
Inflation went from 9% to 3.4%.
They're still waiting. 

A reply by one of the LinkedIn comments contradicts Keen, and proves, once again, that listening is not a skill available to conventional economists: "Inflation is a monetary phenomenon, not deficits (Whatever textbooks you read). Deficits relate to inflation if they are financed by the banking system leading to a large enough magnitude and rate of growth in money that definitely causes inflation after a necessary lag." 

Let's ignore the comment about how budget deficits aren't monetary (What exactly are the Feds spending with those deficits? Poker chips? Bonus airline miles? Could it be even [gasp!] dollars?) 

The comment echoes Miltron Friedman's statement that "Inflation is always and everywhere a monetary phenomenon." [From a 1963 speech in India] I've written about how bad Friedman's economics is when it's put into practice (see here). Hint: it's truly awful. But let's say all that is TLDR (Too Long, Didn't Read).

Let's take a look at a brief description of inflation as the Friedmanite Monetarists would say it:

When the money supply increases too much more than productivity because the Fed (our central bank) issues too many dollars, people tend to spend more, bidding up prices. Result: inflation.

But this ignores the supply side of the supply/demand interaction in the market. The biggest recent US inflation occurred in the 1970s following the Arabs using the "oil weapon," reducing how much oil they shipped to the US. The price of oil in 1971: $1.75/bbl. In 1973, the price of this critical commodity quadrupled virtually overnight as the Arabs restricted supply, peaking at $42/bbl (about the current price, inflation adjusted) in 1982. The Reagan administration got lucky because Alaska's North Slope oilfields came online shortly thereafter increasing the domestic petroleum supply again and prices retreated to around $10/bbl.

Oil is not an optional purchase for both homes and industries, so people were stuck bidding for it even as supplies diminished. (Guess what's coming following Iran shutting the Strait of Hormuz!)

But say the government issued lots of dollars and people chose to stick them in their mattresses, or savings accounts, or paid off debt with the dollars. Where's the bidding then? The uncertainty about the destination of dollars issued is one reason there is no coherent theory of inflation in any economics, conventional or heterodox.

Shortages of food in Zimbabwe and manufactures in Weimar Germany preceded their inflations, eventually becoming hyperinflations. 

So...where's the Friedmanite beef? (Hint: it doesn't exist)