The White House on Wednesday rejected the idea that President Joe Biden was wrong to spend trillions of dollars after taking office, despite historic levels of inflation that followed.
White House press secretary Jen Psaki blamed inflation on the pandemic, snarled supply chains, and Russian President Vladimir Putin for forcing energy prices higher by invading Ukraine.
She dismissed critics of Biden’s expansive spending like former Secretary of the Treasury for then-President Barack Obama Larry Summers.
“The alternative would have been that we would have gone into a massive economic downward spiral and many Americans would have not have enough food to put on the table,” she said.
Biden’s $1.9 trillion stimulus spending bill was joined with the president’s $1.2 trillion infrastructure bill, marking historic spending for his first year of office.
Since Biden first took office, Summers warned that the president’s multi-trillion dollar rescue plan would lead to devastating inflation rates that would overheat the economy and damage Democrats politically.
A paper from the San Francisco Federal Reserve also pointed to Biden’s multi-trillion dollar spending plans for causing inflation.
“Fiscal support measures designed to counteract the severity of the pandemic’s economic effect may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021,” a group of economists wrote in the weekly Economic Letter published by the Federal Reserve Bank of San Francisco on Monday.