During an interview with MSNBC aired on Thursday’s broadcast of “The Last Word,” President Joe Biden stated that he decided to proceed with massive stimulus spending despite warnings that it would create inflation by people like Harvard Professor Larry Summers because “I looked at the practical need for us to instill some confidence in the American people that we can grow this economy.” And argued that it made sense to spend to take care of the coronavirus pandemic.
Host Lawrence O’Donnell asked, [relevant exchange begins around 26:55] “I want to bring this down to something about your presidential decision-making in that entire range of domestic policy decisions, of which there were so many. And I’m particularly interested in Joe Biden versus Larry Summers. And here’s what I mean by that: You’re in here as the President of the United States, who we know as Joe from Scranton, and when you are creating your domestic policy response to the COVID pandemic, the stimulus that is going to be necessary for the economy, money that’s going to be necessary to ship — to put into people’s checking accounts, and then all of the domestic infrastructure spending you’re doing. Harvard Economics Professor Larry Summers, a former Treasury Secretary, a very well-regarded economist around the world, is out there arguing these policies are risky, this risks inflation, significant risk of inflation. He warned against inflation very loudly. He also then predicted, when you overruled that particular piece of advice, he then predicted that we would be in a recession eventually, which has not happened. … How do you, in the presidential position of having to make these decisions, when you’re hearing prestigious economists like him and other voices out there, and possibly people within the administration, giving you counter advice to the direction you want to go, how do you then decide to make that decision to go ahead?”
Biden responded, “Two things: One, look, I looked at the practical need for us to instill some confidence in the American people that we can grow this economy. And one of the biggest pieces of that was invest in America. Everybody thought — and I thought Barack was a great president. … I thought we didn’t do enough. I thought we didn’t invest enough, because we were doing the basic old economics from the 50s, 60s, and 70s.”
He further stated that he believed it was possible to lower inflation without killing jobs.
He added, “I had a thing called the pandemic that was so badly handled that we were still dealing with people, thousands of people a day dying in America. Well, first of all, it was [rational] to spend the money to go take care of that. That was the first big piece of legislation that got passed. And secondly, when I came along, I said, look, in addition to that, we can now change the dynamic and invest more in the things that make us who we are.” And then discussed repairing bridges.
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