Democrats Throw Cold Water On Inflation Worries -- With A Little Help From Wall Street
Republicans’ concerns about inflation are “misplaced” and “overdone,” economist says
As the cost of a gallon of gasoline topped $3 a gallon — and other consumer prices also have risen recently — Republicans have grabbed ahold and have been using those price increases as the new inflation with which to attack President Biden and his Democratic allies.
Since their complaints about rising federal budget deficits didn't seem to gain much traction, Republicans have been using inflation as the cudgel with which to beat Biden with for his plans to boost spending on an array of Democratic priorities.
Democrats came out Wednesday to counterattack, however, including Biden himself during a town hall-style meeting at Mount St. Joseph University in Cincinnati, Ohio, sponsored by CNN.
And, as it happened, they got a definite assist from a prominent Wall Street economist who long has been cited by politicians of both political parties to support their policies.
Biden began by talking up the state of the US economy on his watch, including the number of jobs created since he took office, and the president noted that the economy is expected to grow at an amazingly strong 7 percent.
“No administration has ever created as many jobs,” he said.
Biden then turned to take on the threat of inflation, head-on.
“The vast majority of the experts, including Wall Street, are suggesting that it’s highly unlikely that it’s going to be long-term inflation that’s going to get out of hand,” he said. “There will be near-term inflation because everything is now trying to be picked back up.”
The opinion from Wall Street referenced by Biden came in the form of a new report, available here, published by Mark Zandi, chief economist at Moody's.
Inflation fears “misplaced” and “overdone”
Zandi, a former economic adviser to the late Republican John McCain, endorsed both the bipartisan infrastructure plan which Biden's worked to put together with Senate Republicans, as well as the larger, $3.5 trillion spending package which congressional Democrats plan to approve to fund efforts against climate change, improve access to childcare and more.
Zandi’s report concluded that the two bills will “lift productivity and labor force growth” and “address the long running skewing of the income and wealth distribution.”
He also concluded that Republicans’ stated concerns about inflation are “misplaced” and “overdone.”
Senate Majority Leader Chuck Schumer (D-NY) touted Zandi's conclusions in remarks on the Senate floor.
“Having analyzed both the bipartisan bill and the agreement by Senate Democrats on the Budget Committee, Mark Zandi concludes that the twin legislative packages will provide a massive boost to the economy and that both, both are essential,” Schumer said. “Specifically, his report says that the two bills are ‘designed to lift the economy’s longer-term growth potentials and ease inflation pressures.’
“Again, despite the sometimes hysterical warnings about inflation from Republicans, the chief economist at Moody’s concludes that those concerns are ‘misplaced,’ ‘overdone,’ and that our two infrastructure bills are designed to ‘ease’— his words—inflation pressures,” Schumer added.
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