(TheRedWire.com) – In 2009, then-Vice President Joe Biden offered a puzzling perspective on how to get out of the Great Recession plaguing millions of Americans. He said the government needed to spend money to keep from going bankrupt. It’s that kind of thinking that is driving trillions of dollars in government spending and helping to add fuel to the fire of rising inflation.
From April 2020 to March 2021, Congress spent nearly $6 trillion propping up the economy. Few argued about the need in 2020. However, in February 2021, some economists warned adding a $2 trillion COVID relief bill could force inflationary pressures and offset any good the government had accomplished in 2020, making things worse for Americans, not better.
Now, several former Obama administration officials are sounding the alarm. It seems only one Democrat in Congress may be listening.
Former Obama Officials Says Inflation Could Worsen if Congress Passes $2 Trillion Build Back Better Agenda
Since March, President Biden and his economic confidants argued inflation was transitory and part of the process as the country emerged from the pandemic. Yet, it’s the middle of November, things are getting worse, and people are becoming acutely aware rising prices could last well into 2022 or beyond. Even former leading Obama officials are waving the white flag and sounding the alarms.
In February, former Obama Treasury Secretary Larry Summers warned the Biden administration against continued massive government spending. He said if the government passed the $2 trillion COVID Relief Act, it would add to the growing inflation problem in 2021 and cut into the recovery post-pandemic. Summers warned that the massive Build Back Better agenda would make matters even worse as inflation began to spike over the summer, much to the chagrin of Democrats desperately trying to pass something among their own ranks to socially and economically transform America.
Summers isn’t alone. Jason Furman, the former chairman of the Council of Economic Advisers for President Obama, told the New York Times if Congress passes the Build Back Better measure, it’s likely to put more inflationary pressure on the economy in 2022. While Furman acknowledges the economic pains it could cause Americans, he also stated any stress felt in the economy would be insignificant compared to the benefits he perceives based on his Left-wing beliefs about climate change.
Moderate Senator May Buck Democrats
Economic studies show massive government spending failed to increase economic growth in the 1930s, 1960s, and 1970s. Instead, massive inflation hit hard and led to economic depression and numerous recessions. In the 1980s and 1990s, Congress and presidents Ronald Reagan and Bill Clinton cut federal spending, and the economy exploded.
Despite the warnings about government spending, on November 5, the House passed their version of the Build Back Better. The Senate will likely gut the legislation. Moderate Sen. Joe Manchin (D-WV) has repeatedly called on his fellow Democrats to pause the legislation, evaluate its strengths and weaknesses more thoroughly, and wait to see what inflation does long-term before jumping in and making a bad problem worse.
On Wednesday, November 10, Manchin tweeted that the record inflation spike could influence how he votes. Democrats can’t overcome a united Republican Party in the evenly divided Senate if one Senator bails on the legislation. So, it’s possible Manchin could derail the entire bill in the face of the worsening inflation crisis.
Hold on tight. If Summers and Furman are right, and inflation isn’t transitory, America could be in for a bumpy ride.
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