Cecilia Rouse, the top economic adviser to President Joe Biden, suggested this week that Americans are facing an economic crisis because Biden expertly handled the COVID-19 pandemic.
What are the details?
Americans are battling skyrocketing prices across the market in the face of record levels of inflation. But Rouse claimed on CNN’s “New Day” Tuesday that the crisis is a net positive because adequately addressing the pandemic resulted in these economic woes.
The remarks came after CNN host Brianna Keilar asked Rouse about concerns from some Democrats about Biden’s policies. Specifically, Sen. Joe Manchin (D-W.Va.) and Larry Summers, a top economic adviser to Barack Obama and treasury secretary under Bill Clinton, have attributed the inflation crisis to Biden’s spending.
“I wonder, looking back, were Larry Summers and Joe Manchin right about spending and inflation?” Keilar asked.
Rouse responded that she was “not sure what the right is” and charged that economic problems facing Americans today are directly caused by the pandemic. When Keilar asked again, Rouse blamed an “effective” pandemic response.
“What we’ve seen is that all advanced countries are trying to address inflation, and they have historic levels of inflation. That has been the consequence of mounting an effective response to the pandemic,” Rouse said, “because while we supported households and businesses, got shots into arms, which allowed people to start to come out of their homes and regain their lives, our supply chains could not support that demand.”
“We are not alone; all advanced countries are addressing with this,” she reiterated. “So this is a consequence of having an effective strategy against the pandemic.”
With each passing month, inflation has trended in the wrong direction.
The Bureau of Labor Statistics revealed Wednesday the consumer price index rose 8.3% last month compared to April 2021, which means inflation remains at a near 40-year high. The increase of inflation surpassed the Dow Jones prediction of 8.1%, CNBC reported, and was slightly less than the 8.5% seen in March.
The San Francisco Federal Reserve published a study in late March attributing the inflation crisis, in part, to Biden’s spending policies.
“Estimates suggest that 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,” the study said.
The study also found that inflation is a problem in many developed nations. But the rate of inflation in the U.S. is significantly higher than in those countries.
Because of inflation, Americans should expect to spend an “extra $5,200 this year ($433 per month) compared to last year for the same consumption basket,” Bloomberg reported.