While necessary to refinance national debt, lowering interest rates has a severe side effect: it fuels a "K-shaped" economy. The resulting inflation enriches those who own assets like stocks and real estate while simultaneously punishing wage earners and savers, thus widening the wealth gap.

The disconnect between strong GDP data and public dissatisfaction (the 'vibe-cession') is because wealth gains are concentrated at the top while median outcomes worsen. This K-shaped dynamic is politically unsustainable, forcing politicians away from supply-side policies and toward more populist, and often inflationary, measures.

The primary driver of wealth inequality isn't income, but asset ownership. Government money printing to cover deficit spending inflates asset prices. This forces those who understand finance to buy assets, which then appreciate, widening the gap between them and those who don't own assets.

Modern monetary policy is a deliberate trade-off: prevent a 1929-style depression by accepting perpetual, slow-moving inflation. This strategy, however, systematically punishes savers and wage-earners while enriching asset owners, creating a 'K-shaped' economy where the wealth gap consistently widens.

Warsh contends that post-crisis quantitative easing primarily inflated asset prices (stocks, housing) rather than stimulating the real economy through traditional credit channels. This created a system where sophisticated investors profited by "playing the game," while wage earners lagged behind, questioning the policy's efficacy and fairness.

Excessive debt forces governments to print money, which inflates asset prices. This process mechanically enriches the asset-owning class while devaluing currency for wage earners, hollowing out the middle class into either the wealthy or the poor.

Printing money doesn't create value; it inflates the price of finite assets like stocks and real estate. Those who own these non-inflatable assets see their net worth skyrocket, while those holding cash or earning wages are robbed of purchasing power, creating a widening wealth gap.

Government money printing disproportionately benefits asset owners, creating massive wealth inequality. The resulting economic insecurity fuels populism, where voters demand more spending and tax cuts, accelerating the nation's journey towards bankruptcy in a feedback loop.

As governments print money, asset values rise while wages stagnate, dramatically increasing wealth inequality. This economic divergence is the primary source of the bitterness, anxiety, and societal infighting that manifests as extreme political polarization. The problem is economic at its core.