A top Biden administration economist was pressured by CNN host Jim Sciutto to explain during a Friday interview why a new massive spending bill for infrastructure is needed with the economy bouncing back in a big way as more states reopen from the pandemic.
Chief economist Cecilia Rouse, head of the White House Council of Economic Advisers, responded after Sciutto noted that more than 950,000 new jobs were created in March as the unemployment rate fell to 6 percent, which is still nearly double the lowest rate of 3.4 percent in February 2020, right before the country began shutting down.
“So these numbers are good. They’re above forecast. I know that there’s still about an $8.4 million job deficit,” Sciutto said. “But economists are forecasting continued growth, even a boom going into the summer. And I wonder, if the economy is set to boom, why the need to inject another $2 trillion in via this large infrastructure proposal?”
“Yes, these were encouraging numbers. It suggests that the speed with which we have accelerated the vaccination rollout and getting shots into arms and just the confident economic structure that the Biden administration has put in place has really provided the confidence that the economy needs to start to get going again,” Rouse responded.
“But we still have more work to do. So, yes, the American Rescue Plan was designed to help get us past this pandemic to ensure that people could get to the other side safely,” she continued.
She went on to claim that in the Trump economy, when the county was essentially at full employment right before the pandemic hit, there were still “structural inequalities.”
“However, we do know that even this time last year, well maybe a little bit before this time last year, when the economy — when the unemployment rate was relatively low, there were some structural inequalities that this — that we had been not making the kinds of important infrastructure investments in our roads and our bridges,” Rouse said.
“We had not been investing in research and development, which we know is so critical for generating innovation that helps us get to the next level. And that our workers, many of whom are caring for our most important loved ones, have not been earning very good salaries,” she added.
“So the rescue plan is designed to get past the pandemic. The American Jobs Plan is meant to invest in our future. And so they’re quite distinct. The rescue plan is supposed to be short. The investment is — will take longer, it’s more foundational,” said Rouse.
Earlier, Sciutto noted that Republicans are generally opposed to new spending, but that some moderate Democrats are also becoming increasingly concerned about the massive spending and high debt of the United States.
“I’m concerned about it in terms of generational equity, the long-term implications for your generation and the generation that comes after,” Maine Independent Sen. Angus King, a member of the Senate Budget Committee who caucuses with Democrats, told a forum hosted by the Millennial Debt Foundation.
“And it bothers me from a, sort of, ethical point of view that where my generation is spending the money, spending your money,” he said.
“It’s a cheap time to borrow and some people are using that as a reason to borrow. The problem that comes is our interest rates flow. The U.S. has the ultimate adjustable-rate mortgage, which is the rates can change,” he added, noting that the U.S. will be in “a heap of trouble” if rates go back up to 4 or 5 percent, where they’ve historically been.
Rep. Dean Phillips (D-Minn.) agreed.
“I read recently that John D. Rockefeller, in his era, could have paid off the entire United States federal debt with his wealth. Turn up the clock now to 2021, America’s wealthiest man, Jeff Bezos, with about $180 billion in net worth, he could pay six months of our debt service; think about that,” he said. “We will be in a boatload of trouble when we see interest rate spikes.”
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