A lot of problems in America are spinning out of control but one thing that will be among the heaviest things dragging the Biden administration and the Democrat Party below the waves during the midterms is the rapidly inflating economy. Now we see that according to one former Obama economic aide, the Biden administration was warned that inflation would greatly worsen but they didn’t heed the warning in the least and, instead, made moves that only made it worse.
According to Fox News, Steven Rattner, a former economic adviser to President Barack Obama, wrote a guest essay for the New York Times where he revealed that he and a myriad of other economic experts warned the Democrats about inflation to no avail. Rattner served as counselor to the then-Treasury Secretary.
“How could an administration loaded with savvy political and economic hands have gotten this critical issue so wrong?” asked Rattner.
The former aide traced the beginning of the problem back to the “American Rescue Plan” which had no funding but threw $1.9 trillion in the wrong direction.
“The original sin was the $1.9 trillion American Rescue Plan, passed in March. The bill — almost completely unfunded — sought to counter the effects of the Covid pandemic by focusing on demand-side stimulus rather than on investment,” he wrote. “That has contributed materially to today’s inflation levels.”
“They can’t say they weren’t warned — notably by Larry Summers, a former Treasury secretary and my former boss in the Obama administration, and less notably by many others, including me. We worried that shoveling an unprecedented amount of spending into an economy already on the road to recovery would mean too much money chasing too few goods,” Rattner added.
Rattner added that Biden’s “Build Back Better” plan has too much spending and not enough tax revenue to back it since the results of that revenue only arrive over the course of a decade:
But Rattner referred to it as “a package that front-loads spending while tax revenues arrive only over a decade.” He cited research from the Committee for a Responsible Federal Budget, estimating that the plan would likely add $800 billion or more to the deficit over the next five years, “exacerbating inflationary pressures.”
The Biden administration and Democrats are trying to ram through the “Build Back Better” plan which has been stalled by moderate Democrats such as Joe Manchin and Kyrsten Sinema. Both have signaled that they have problems with the bill with Manchin not fully on board and Sinema indicating that she has a problem with the bill, namely the tax hikes.
It’s these tax hikes the Biden administration will need for this bill to remotely work, but even with these tax hikes the bill still puts an enormous amount of spending first in a time when our economy is already in massive amounts of debt and people are already spending more thanks to inflation.
Moderates were awaiting the CBO score on Biden’s plan before the vote. The claim by Democrats was that this was already all paid for, however, it’s highly likely that the CBO report will show it’s not, further putting people like Manchin in the “no” column.
All of this is a bed that Democrats made for themselves, but it’s clear they were warned and yet they didn’t listen.