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Republicans will monitor inflation crisis and seek solutions to help economic recovery
WASHINGTON – The House Committee on Oversight and Accountability’s Subcommittee on Health Care and Financial Services held a hearing yesterday titled “Inflation: A Preventable Crisis.” At the hearing, subcommittee members told expert witnesses how the fiscal policies pursued by President Biden, including the American Rescue Plan (ARP) and the Inflation Reduction Act (IRA), overstimulated the economy and hurt the United States. I asked him if he provided a slush fund to the Democrats by increasing human inflation. Radical agenda.
Republicans on the subcommittee warned Americans still face high costs due to historically high inflation and the risk of a recession, but the Biden administration is pushing for more damaging tax increases and spending. , ignoring the damage done to the economy.
Important points:
Despite warnings from Republicans and even former President Obama’s own economic adviser, Larry Summers, that America’s rescue plan will cause inflation, the Biden administration and Congressional Democrats are rushing to spend trillions of dollars, It accelerated inflation to the highest level in more than half a century.
- President Biden has rushed spending on America’s bailout plan, ignoring both inflation warnings and data that the economy is growing.
- Dr. Douglas Holtz Eakin, president of the American Action Forum, testified at the hearing:The US bailout plan, a $1.9 trillion stimulus package, was enacted in March 2021, when the US economy was growing at 6.5%. Data such as the Atlanta Fed’s GDPNow clearly show that. ” he continued, “that [the ARP] It was too big and destined for macroeconomic chaos. ”
The Biden administration recklessly doubled down on spending with a misnamed inflation cut bill.
- In her opening remarks, subcommittee chair Rep. Lisa McClain (R-Michigan) argued that Democrats would invest billions in the IRA, even though there was still money left over from previous bailout bills. I pointed out that I spent As a result, grocery prices have risen more than 11% for her.
Inflation has caused huge increases in food and energy prices, causing extreme stress to hard-working Americans and American families.
- Dr. Douglas Holtz Eakin testified: “This episode is almost over. […] Food, energy and housing are still growing at 8.5% year-on-year. Go to the gas station, go to the supermarket, go home, Recall that your salary is worth almost 10% less than it was last year”
The Biden administration has ignored, denied and shifted responsibility for the damage it has done to the economy for too long. It’s time they were held accountable.
- Dr. John Taylor, an economics professor at Stanford University, warned in his testimony:“Unless monetary policy is taken, we are still living in an era of high inflation.”
Member highlights:
Chairman Lisa McClain (Republican, Michigan) Asked Democrats knew, or witnessed how America’s bailout plan would increase inflation before passing the bill.
Congressman McClane: “Could you have predicted that the US rescue plan would push inflation up so high?”
Dr. Doug Holz Eakin: “Yes,” said Larry Summers, a prominent economist and former Treasury secretary at the time. History has given us examples such as the American Rescue Plan. was growing very fast, 10.5%, federal spending increased about 50%, which is about the same as the American relief program, 2 trillion on a 4 trillion base, inflation that year The rate has increased by 6%.”
Chairman McClane (R, Michigan) also argued that the Biden administration has irresponsibly distorted inflation as an “upper-class problem,” even though it disproportionately affects middle- and low-income Americans. said he tried.
Dr. Doug Holz Eakin: “If you look at the median income in the United States and 50% of it goes to food energy and shelter.which is a tax of $3,000 on food, energy and housing at the current rate of inflation.It is a substantial loss of purchasing power for other purposes. Because you have to apply it to those core elements. ”
Rep. Virginia Fox (Republican) discussed steps Congress could take to limit inflation spending.
Congressman Fox: “Last Congress, I introduced the Spending Protection Act, which curbs compulsory spending increases by setting program-specific caps on new or reapproved programs. What effect would such a law have on inflation in the United States?”
Dr. Taylor: “I think it’s a step in the right direction.”
Eyewitnesses told Rep. Fox that it will likely take longer than expected for inflation to return to normal levels.
Congressman Fox: “When do you expect inflation to return to pre-COVID levels? What actions should the Biden administration, Congress and the Federal Reserve take to meet that timeline? “
Dr. Doug Holz Eakin: “…Chairman Powell, speaking to the National Association of Business Economics, said it would take three years to get back to the 2% target. have to achieve a higher terminal rate than they expected, It will probably take longer than expected”
Congressman Russell Fry (R.
representative fly: “Dr. Holz Eakin, you previously testified in February 2021 that the American bailout plan injected too much stimulus into the American economy. Can you elaborate on that?”
Dr. Doug Holz Eakin: “Yes. The proposed bill came at a time when the weekly and monthly data we received suggested the economy was growing very rapidly. Good summary of this. produced by the Atlanta Fed, known as GDPNow, shows an estimate of the current quarter’s growth in GDP, which was 6.5 percent, compared to the economic downturn in March 2020 and eventual Unlike when we were down nearly 10% in a quarter, it was extraordinary.
“So we’re in a completely different situation. We’re growing very fast, we’re close to full employment. We’re close to potential GDP. There is no reason for a nearly $2 trillion stimulus package.Whatever problems you might have imagined remain, it’s too big”
Congressman Nick Langworthy (RN. Vehicle.
Senator Langworthy: “Do you think President Biden’s recommendation to Americans that one way to bring down energy prices is to buy electric cars? Do you think that is the right solution for most Americans?”
Dr. Doug Holz Eakin: “Again, the inflation phenomenon is the price of the economy as a whole, and all goods and services are rising at the same time. But you miss the more important point: Prices are going up everywhere.”
Oversight and Accountability Committee Chairman James Comer (R-Kentucky) said now is not the time for the Fed to take a wait-and-see approach to dealing with inflation. said there were steps Congress could take to ease inflation and help the economy recover faster.
Chairman Comer: “What do you think is the most important way to combat inflation? What’s the silver bullet out there?”
Dr. Taylor: “I think the problem is the Federal Reserve. Globally, we have the European Central Bank, we have other central banks around the world, and they tend to follow the Fed to some extent, as they have in the past. That’s the important thing. So the focus is on the Fed, as I said earlier, this Congress had policies that required more reporting, so the Federal Reserve is reporting a little more. It could go further.
Read more: McClane: President Biden doubled reckless spending despite warnings, exacerbating inflation in American families
Click here to view the hearing.
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