The Covid-19 pandemic, instead of Joe Biden’s financial policies and stimulus bundles, is the “real cause” of high inflation, according to a member of the U.S. President’s Council of Economic Advisers.
In an interview over the weekend, it was put to Heather Boushey that an essential criticism versus “Bidenomics” and the big stimulus it had actually brought, was that it had, to a particular level, sustained inflation.
Boushey, who was talking to CNBC’s Charlotte Reed at the Aix- en-Provence financial online forum in France, declined this concept. “What the president did when he first came into office, the American Rescue Plan — we were in the middle of a pandemic, and he put in place a policy that gave us enough flexibility to deal with all the challenges that came our way,” she stated.
A $1.9 trillion relief plan, the American Rescue Plan was revealed inJan 2021 and gone by Congress in March of that year.
“Had we done that, and the United States’ inflation spiked higher than anyone else, well, maybe you could make the case that it was about that policy,” Boushey included.
“But the reality is, is that that isn’t what happened — yes, the United States had inflation, but so did other countries that did not have the same policies.”
“So the inflation, the real cause was the global pandemic, and that is about the resiliency of our global supply chains.”
Expanding on her point, Boushey stated this was why the U.S. was “making the investments that we need to make.”
The world’s biggest economy was likewise, she included, “encouraging our friends and allies around the world to work with us to foster the resiliency in supply chains that we will need, and to move us away from fossil fuels, which have these volatile prices, towards clean energy.”
The latter situation would offer “more stable prices over time, where we can get away from some of the disruptions that the global economy can cause for domestic prices.”
Inflation in the U.S. increased at a 4% yearly rate in May, according to the Labor Department, its least expensive yearly rate in over 2 years. In mid-2022, inflation in the U.S. topped 9% to reach a four-decade high with market analysts keeping in mind several elements, such as blocked supply chains, outsized need for items over services, and trillions of dollars in Covid- associated stimulus costs.
Biden’s approval scores struck an all-time low in 2015 with surveys revealing Americans were dissatisfied with the state of the U.S. economy and skyrocketing gas costs.
During her interview with CNBC, Boushey likewise kept in mind that the inflation rate had “come down for 11 months now” which the U.S. had likewise “seen stronger growth than other G7 countries, and we have not seen higher inflation.”
— CNBC’s Jeff Cox added to this post.
