[THEHILL] Last September, as the Build Back Better legislation was being considered in Congress, many members worried about the inflationary pressure of injecting an additional $2.4 trillion into the economy on top of the $4.1 trillion committed to the American Rescue Plan and the Cares Act. When it looked like the Democratic majority might include enough deficit hawks to scuttle the bill, Nobel Laureate economist Joseph Stiglitz rounded up another 16 of the 36 living American Nobel Prize economists to declare, in an open letter, that whatever upward pressure on prices all this new money might bring there was no threat of inflation.
Forget what government statistics were already signaling. Many non-Nobel economists recognized that a clear case of demand-pull inflation was already underway. The price of used cars, the vehicles people buy when new cars seem unaffordable, led a clearly rising consumer price index.
The Nobelists’ letter showed that those signing had bought Team Biden’s novel argument that its enormous expansion of social welfare programs really was just a different form of infrastructure investment, just like roads and bridges. Gary Becker, the Nobel economist recognized for developing human capital theory 50 years ago, likely would not look at spending $410 billion on “climate resilience” as being as important as providing after-school enrichment programs for poor kids.
No matter. In an act of intellectual legerdemain, the wise men said that expanding social welfare programs would operate like old-fashioned countercyclical policy — unemployment checks would support a continuing but smaller level of consumer demand. This approach, a clever idea developed by practical post-war economists, was careful not to disincentivize job searching by setting benefits too high.
Related:
Build Back Better: 2022-04-02 Romney suggests cutting retirement benefits for younger Americans
Build Back Better: 2022-03-30 Biden's $5.8T budget proposal would be laughable — if it weren't so alarming
Build Back Better: 2022-03-28 Biden to propose new 'billionaire's tax' on richest Americans
Build Back Better: 2022-04-02 Romney suggests cutting retirement benefits for younger Americans
Build Back Better: 2022-03-30 Biden's $5.8T budget proposal would be laughable — if it weren't so alarming
Build Back Better: 2022-03-28 Biden to propose new 'billionaire's tax' on richest Americans
Related:
American Rescue Plan: 2022-03-06 White House: Congress must act soon to replenish COVID funds
American Rescue Plan: 2022-02-24 Top Republican: Biden engaging in 'cover-up' of massive pandemic relief fraud
American Rescue Plan: 2022-02-15 AOC Says Congress Is a 'S--t Show,' Attributes Crime Surge to Child Tax Credit Expiration
American Rescue Plan: 2022-03-06 White House: Congress must act soon to replenish COVID funds
American Rescue Plan: 2022-02-24 Top Republican: Biden engaging in 'cover-up' of massive pandemic relief fraud
American Rescue Plan: 2022-02-15 AOC Says Congress Is a 'S--t Show,' Attributes Crime Surge to Child Tax Credit Expiration
Related:
Cares Act: 2021-02-09 Dems To Cut Off Stimulus Checks At $200K Household Income: Here's What Else Is In The Fiscal Package
Cares Act: 2020-10-10 Kimberly Guilfoyle: Dems' Rotten Stimulus 'Deal' Is a Bailout of Democrat-Run Cities and States
Cares Act: 2021-02-09 Dems To Cut Off Stimulus Checks At $200K Household Income: Here's What Else Is In The Fiscal Package
Cares Act: 2020-10-10 Kimberly Guilfoyle: Dems' Rotten Stimulus 'Deal' Is a Bailout of Democrat-Run Cities and States
Related:
Joseph Stiglitz: 2016-08-17 Inequality Is a Distraction. The Real Issue Is Growth
Joseph Stiglitz: 2014-04-23 Six Studies That Show Everything Republicans Believe is Wrong
Joseph Stiglitz: 2012-10-19 Greece, Spain 'in depression': Nobel winner Stiglitz
Joseph Stiglitz: 2016-08-17 Inequality Is a Distraction. The Real Issue Is Growth
Joseph Stiglitz: 2014-04-23 Six Studies That Show Everything Republicans Believe is Wrong
Joseph Stiglitz: 2012-10-19 Greece, Spain 'in depression': Nobel winner Stiglitz