Joe Biden seems to be either lying or completely ignorant to the consequences of his incredibly destructive decisions he’s made since taking office. His apparent incompetence is impacting Americans across the country, causing financial distress in many homes. As he goes on live television to perform his press conference that’s been prepared for him, reading off a teleprompter, he presents a reality he’s trying to convince the country of by touting an increase in jobs and attempting to claim our economy isn’t in a downward death spiral.
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Despite what Biden is trying to convince us of, the depletion many Americans are seeing in their bank accounts for basic needs like gas and groceries is a reality that can’t be ignored or blamed on Biden’s predecessor, as he so often does.
The $1.9 trillion American Rescue Plan proposed by President Biden did contribute to inflation, according to Treasury Secretary Janet Yellen.
As the former head of the Federal Reserve noted in an interview with Matt Murray, editorial page editor of The Wall Street Journal, the recent influx of the White House’s enormous spending did play into today’s inflationary environment, noting that it was “justified” by different economic risks.
“So, look, inflation is a matter of demand and supply, and the spending that was undertaken in the American Rescue Plan did feed demand,” Yellen said.
According to her, the 40-year high inflation rate is an unintended consequence of the Biden administration’s attempt to forestall a sharp economic downturn and facilitate full employment in the economy.
It was also said by Yellen that the fiscal stimulus and relief package had to support the labor market in response to all the dire forecasts.
“But I do think it was justified and appropriate at the time, given the risks the economy faced,” she said. “At the time that President Biden was inaugurated, we had an economy where forecasters were envisioning very high unemployment for a very long time. We had especially low-wage workers who had been laid off in massive numbers. We saw cars lined up for miles in food banks, Americans worried about not being able to feed their families, get enough to eat. Forecasts were really quite dire.”
In her remarks, Yellen touched upon the economy in general, noting that “the outlook is very uncertain” due to the panoply of risks. Global growth prospects are threatened by surging commodity prices, spillovers from the war in Eastern Europe, and rising commodity prices.
However, she predicts that the U.S. economy will grow solidly and there will be a potential soft landing.
“I do believe we’re going to see solid growth in the coming year,” Yellen said. “The Fed will need to be skillful and also lucky, but I believe it’s a combination that is possible.”
In response to the inflationary pressures, the Federal Reserve raised the benchmark interest rate by 50 basis points on May 4, the biggest increase in more than 20 years. After the FOMC policy meeting, Fed Chair Jerome Powell stated that there is a good chance for a softer-or softer-landing or outcome.
NBC News conducted a survey in March that found, however, that 38 percent of American consumers blamed the government and Biden’s policies for price inflation.
According to a poll by Emerson College, 39 percent of Americans believe that the current administration is responsible for today’s higher cost of living in the United States.
Are economists and market experts of the same opinion?
In the first proposals for the American Rescue Plan last year, former Treasury Secretary Larry Summers had warned that it would trigger inflationary pressures when the legislation was first proposed.
“We must make sure that it is enacted in a way that neither threatens future inflation and financial stability nor our ability to build back better through public investment,” Summers wrote in an op-ed in The Washington Post.
In a second piece for the Washington Post, he admitted that the White House had not heeded the warnings, noting that a hefty rescue measure “would threaten the Build Back Better agenda.”
Stephen Rattner, Obama’s economic adviser during the Obama administration, also echoed Summers’s inflation concerns, warning that the unsustainable expansion of the federal budget financed with deficits had a significant impact on today’s rising consumer prices.
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“The $1.9 trillion American Rescue Plan passed in the early days of the Biden administration will go down in history as an extraordinary policy mistake,” Rattner said in an op-ed for The New York Times last month.
A research paper published in October by the San Francisco Fed Bank predicted that the American Rescue Plan (ARP) would contribute to elevated inflation in 2022, adding to the personal consumption expenditure (PCE) price index, one of the Fed’s favorite measures of inflation.
In March, the PCE price index surged to 6.6 percent, the largest increase in any given month.