A member of the President’s Council of Economic Advisers said the “real cause” of high inflation was the Covid-19 pandemic, not Joe Biden’s economic policies and stimulus plan.
In an interview over the weekend, Heather Boushey said the main criticism of “Bidennomics” and the massive stimulus it has created is that it fuels inflation in part.
Bush dismissed that notion in an interview with CNBC’s Charlotte Reid at the Aix-en-Provence Economic Forum in France. “What the president did when he first took office, american rescue plan — we are in the midst of a pandemic, and he has a policy that allows us to be flexible enough to deal with all the challenges that come our way,” she said.
US Rescue Plan $1.9 Trillion Rescue Plan Announce Passed by Congress in January 2021 and passed in 2017 to march that year.
Bush added: “If we do that, and inflation in the U.S. spikes higher than in other countries, then maybe you can show that it has something to do with that policy.”
“But the reality is, that’s not the case — yes, there’s inflation in the U.S., but there’s inflation in other countries that don’t have the same policies.”
“So the real cause of inflation is the global pandemic, and it’s about the resilience of our global supply chains.”
Elaborating on her point, Bush said that was why the US was “making the investments we need”.
The world’s largest economy also “encourages our friends and allies around the world to work with us to build the supply chain resilience we need and move us away from volatile fossil fuels and toward clean energy,” she added. “
The latter scenario would provide “more stable prices over time, and we can escape some disruption that the global economy might have on domestic prices.”
U.S. inflation rose at an annual rate of 4% in May, the lowest annual rate in more than two years, according to the Labor Department. With U.S. inflation topping 9% in mid-2022, hitting a four-year high, market commentators point to factors such as clogged supply chains, demand for goods outstripping services, and trillions of dollars in stimulus spending related to the coronavirus.
Biden’s approval ratings hit record lows last year as polls showed Americans dissatisfied with the state of the U.S. economy and soaring gasoline prices.
In an interview with CNBC, Bush also noted that inflation “has fallen for 11 consecutive months” and that the U.S. “has also seen stronger growth than the rest of the G7 countries, and we haven’t seen higher inflation yet.”
—CNBC’s Jeff Cox contributed to this article.