Writer in Residence with the Omidyar Network and the Hewlett Foundation, Zach Carter, told Hill.TV that President Biden’s spending plans are contributing to the growing debate over inflation.
“Inflation has become this really big talking point and a significant issue this year,” said Carter, author of “The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes.”
He said the COVID-19 pandemic is a large part of this discussion because of its economic effects on both individuals and businesses.
“You’re seeing things move because the pandemic is a particularly odd event,” Carter said.
But he said that when it comes to inflation, the prices of some goods are rising while others are falling or staying the same.
“So, it’s important to ask yourself if you’re a policymaker, which prices matter to working people? And then what do you do about those things when those prices start to go in weird directions?” Carter said.
The Biden administration’s plans for increased government spending will likely produce demand-driven inflation in the next few years, Carter said, arguing that demand for goods and services putting pressure on supply chains is a good thing.
In late June, Biden and a group of five moderate Republicans and Democrats agreed to a framework that would spend $1.2 trillion over the next eight years on infrastructure. The proposal is expected to move through the Senate as early as this month, with Democrats seeking a larger infrastructure measure to move alongside the bipartisan bill.
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