Biden’s economic advisor credits the “flexibility” of the US bailout, despite record inflation
President Biden’s top adviser, Jen Sperling, said Sunday that the president’s $1.9 trillion US bailout has provided “resilience” to the US economy, although some economists blame it for the current inflation crisis.
Biden used Sperling in March 2021 to oversee the implementation of the US bailout bill, which Democrats passed without any Republican support.
Democrats continue to argue that the plan saved the country from an impending economic depression and that injecting more money into the government through legislation such as Biden’s Plan to Build Back Better will eventually cut costs and ease inflation, which reached 8.3% in May.
Economists such as Stephen Ratner and Larry Summers, who both served under President Obama and donated thousands to President Biden’s 2020 presidential campaign, have repeatedly criticized the Biden administration for overheating the economy with a US bailout that sent $1,400 to most Americans.
Economics professor Ribbs Biden’s response to inflation: The president ‘mistakenly he can’t do anything’
Fox News Sunday’s John Roberts asked Sperling to respond to recent comments by JPMorgan Chase CEO Jamie Dimon that he predicted a looming economic “hurricane.”
“We don’t know if it’s a small storm or Sandy,” Damon said last week. “You’d better prepare yourself.”
It’s not all doom, Sperling said, and that the US bailout has given the economy the “flexibility” it needs to weather multiple impacts.
“I would be more reassured by this statement for a number of reasons,” Sperling said. “No. 1, one of the things we saw coming out of the US bailout is resilience in that recovery. You know, John, I had journalists call me when Delta hit, when Omicron hit, when Putin went to Ukraine, saying is that him? Is it going to derail That recovery?So far, we’ve seen resilience, and I think that has a lot to do with the American Recovery Act.
“Secondly, I mentioned the job numbers which, as I said, were very positive – 390,000 jobs were created, 3.6% unemployment,” he continued. “But there was something else there, which the Washington Post called the ‘Great Return to Work.’ We’ve now seen 4.2 million Americans go back to work — just three, four hundred thousand in the last month, and I think that gives a lot of confidence and reassurance to this economy.
Jamie Dimon warns of an economic ‘hurricane’ coming: ‘Put yourself down’
“And third, we feel that the strength in the labor market and the strength in household balance sheets — their checkbooks, the fact that they have less debt service — all put us as a country in a better position than almost any other country to move to more stable growth without giving up job gains. These are even in the face of what we know is going to be some tough medicine from the Federal Reserve to try and rein in inflation.”
Sperling went on to argue that “record job growth” should give people more confidence about the future of the economy.
“The fact that Americans are still going back to work, I think, should give us more confidence that we are in a position to make this transition without giving up on those historic gains in the labor market,” he said.
Employers added 390,000 jobs in May, the Labor Department said in its monthly payroll report released on Friday, topping the 328,000 jobs forecast by Refinitiv economists. Meanwhile, the unemployment rate held steady at 3.6%, the lowest level since February 2020.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
But a strong labor market is partly fueling record-high inflation, with millions of workers seeing the biggest wage gains in years — the result of companies competing for a limited number of employees.
Earnings were up 5.2% in May from a year earlier, well above the pre-pandemic average of 3%. There are signs that growth may be moderating, with earnings rising just 0.3% month over month, slower than Refinitiv had forecast.
Fox Business’s Megan Heaney contributed to the report.