Larry Kudlow — former President Donald Trump’s top economic advisor — said that President Joe Biden need look no further than his own policies to find the source of the nation’s record high inflation.
The consumer price index jumped 8.3 percent in April year-over-year, down just slightly from an 8.5 percent rise in March.
In Tuesday remarks, Biden blamed Russia’s war in Ukraine and the coronavirus pandemic as the primary causes of inflation.
He specifically dismissed the idea that his administration’s policies — including the stimulus payments, enhanced unemployment benefits and enhanced child income tax credit payments, all paid for with borrowed and printed money — have contributed to the problem.
“I think our policies help, not hurt,” he told reporters at the White House. “The vast majority of the economists think that this is going to be a real tough problem to solve. But it’s not because of spending.”
“The president played the blame game yesterday. He won’t own any of these problems, and he’s coming back with more spending,” the former director of the National Economic Council told Fox News on Wednesday.
“Look, you had prominent Democrat economists and Republican economists a year ago predict rising inflation because of huge social spending, aggregate demand increasing, deficit financing, too much borrowing and too much money printing,” Kudlow said.
“And then you had the war against fossil fuels at exactly the wrong time,” he added.
In a February 2021 Washington Post opinion piece, former Clinton Treasury Secretary Larry Summers wrote that passing the $1.9 trillion American Rescue Plan, given the economy was already well into a recovery, “will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability.”
After it passed the following month, he called it “the least responsible macroeconomic policy we’ve had in the last 40 years.”
Further, former Obama administration Treasury Department official Steven Rattner, in a November article for The New York Times, identified the American Rescue Plan, as the “original sin” leading to the current high inflation rate.
He pointed to Summers’ warning, as well as “many others.”
“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 explained.
Kudlow, who served as an economist in the Reagan administration, told Fox News that’s exactly what happened.
“The tax hikes and the environmental restrictions [under Biden] are suppressing the supply side of the economy: not enough goods. And the spending increases the demand side of the economy: too much cash,” Kudlow said.
“If you are going to spend more than you can produce, well, prices have to go up. And the obvious solution is to spend less and produce more.”