Bidenflation will cost American families $5,200 this year. That’s $433 per month. Even liberal economists like Obama economic advisors Larry Summers, Jason Furman, and Steve Rattner say Biden’s reckless spending is to blame. But let’s not leave out Nancy Pelosi and Chuck Schumer and some of those GOP enablers.
The New York Times published an interview with Larry Summers on The Ezra Klein Show. Summers stated unequivocally that “We’re currently experiencing the worst inflationary crisis in decades.”
“Annual inflation was already at its highest rate in decades in January of this year,” but there was hope as everyone returned to work after the pandemic, Klein said.
“I’m probably as apprehensive about the prospects for a soft landing of the U.S. economy as I have been any time in the last year. Probably actually a bit more apprehensive. In a way, the situation continues to resemble the 1970s…,” Summers told Klein.
“And so now I think we’ve got a real problem of high underlying inflation that I don’t think will come down to anything like acceptable levels of its own accord,” he warned after blaming inflation in part on bad luck on supply chains.
About the wild stimulus spending, he says:
“And the doctor who prescribes you painkillers that make you feel good to which you become addicted is generous and compassionate, but ultimately is very damaging to you. And while the example is a bit melodramatic, the pursuit of excessively expansionary policies that ultimately lead to inflation, which reduces people’s purchasing power, and the need for sharply contractionary policies, which hurt the biggest victims, the most disadvantaged in the society, that’s not doing the people we care most about any favor. It’s, in fact, hurting them.
The excessively inflationary policies of the 1970s were, in a political sense, what brought Ronald Reagan and brought Margaret Thatcher to power. So I share your desires. I think the purpose of all of this is to help people who would otherwise have difficulty. That is what it’s all about in terms of making economic policy. But if you don’t respect the basic constraints of situations, you find yourself doing things that are counterproductive and that in the long-run prove to be harmful.”
“Just as in the 1970s, excessively inflationary policies were followed by bad luck, and just as in the 1970s, the authors of the expansionary policies chose to interpret all the problems as being a consequence of bad luck, even though some of it was a consequence of their policies. I think it’s pretty clear that we’re going to have significantly higher inflation this year because of the increase in oil prices, and because of the increase in food prices, and because of what’s happened in China. The long-predicted return to normal in used car prices, for example, is now substantially deferred.”
When the Feds only raised interest rates.25%, Summers saw it as a negative:
“Anything is possible, and wishful thinking can sometimes prove self-fulfilling. But I believe the Fed has not internalized the magnitude of its errors over the past year, is operating with an inappropriate and dangerous framework and needs to take far stronger action to support price stability than appears likely. The Fed’s current policy trajectory is likely to lead to stagflation, with average unemployment and inflation both averaging over 5 percent over the next few years — and ultimately to a major recession.”
Summers suggests rates of 4% will get inflation under control. That’s probably optimistic since inflation is at 8% and rising.
We haven’t even added the number of jobs we lost during the pandemic at this point.
GOP.com lists some resources:
- Former Obama and Clinton economist Larry Summers: The “tremendous wall of money” that the Democrats released “created [inflation] problems.”
- Ex-Obama economist Jason Furman: Biden’s spending is “too big…don’t know any economist” who supported that much.
- Former Obama economic advisor Steve Rattner: “It’s a classic economic case of ‘too much money chasing too few goods,’ resulting in both higher prices … The Biden administration needs to shift its approach… Mr. Biden has been disingenuous.”
- Biden Treasury Secretary Janet Yellen: Biden and the Democrats’ $1.9 trillion stimulus was one of the “factors that are involved in inflation.”