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PolitiFact spanks Psaki over Biden inflation claim

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Fact-checker PolitiFact gave its first-ever “false” rating to White House press secretary Jen Psaki for outrageously claiming during a press briefing that “no economist” believes that Biden’s $1.75 trillion Build Back Better bill will fuel inflation.

“Why should Americans not be concerned that injecting another $1.75 trillion or more would further raise inflation?” an NBC News correspondent asked Psaki.

“Because no economist out there is projecting that this will have a negative impact on inflation,” she jaw-droppingly replied. “And actually, what it will help do is it will help increase economic productivity. It will help economic growth in this country. That, and the Build Back Better Agenda will help reduce inflation, will help cut costs for the American people over the long term.”

“Is it really true that there’s not a single economist who thinks the bill will boost inflation? No,” PolitiFact emphatically stated in an article published on Thursday. “Many economists have stated for the record that they think the inflationary impact of the bill will be small and brief. But we found lots of economists who say they expect modest inflationary pressure, at least initially.”

The piece quotes a number of economists who contradict Psaki’s inflation claim as well as former Obama economic adviser Larry Summers who has been very vocal over the Biden administration’s policies when it comes to inflation concerns.

“I’m an economist, and I disagree,” Douglas Holtz-Eakin, who is the president of the center-right American Action Forum, told PolitiFact.

“We know there’s lots of spending in the bill, and that it’s front-loaded” into the earlier years, he claimed. “If you cut taxes and increase spending, financed by debt, that will put upward pressure on inflation.”

“You should wind up with primarily a deficit-financed spending bill that is going to be rolled out in an economy near full employment… It will make the labor market even hotter and create even more price pressure,” declared Ethan Harris, who is the head of global economics research at Bank of America.

Michael Feroli, the chief U.S. economist for JPMorgan Chase, also agreed, “Right now, anything that expands aggregate demand is not warranted, not advisable. … The economy seems to be operating pretty close to its capacity constraints.”

“Inflation is the result of too much demand chasing too little supply,” asserted John Leahy, who is a professor of macroeconomics and public policy at the University of Michigan. “Anyone arguing that the bill is inflationary can point to any standard economic textbook: An increase in government spending should increase demand and thereby increase inflation. This will happen even if the spending is fully paid for through taxes since the government spending increases demand one for one and the taxes reduce demand only to the extent that firms or consumers reduce their spending as a result, and this reduction is typically less than one for one.”

PolitiFact ruled that Psaki was “wrong” to claim that “no economist foresees inflation” due to Biden’s spending bill being signed into law.

“Numerous economists, including some allies of the White House, have gone on the record saying there probably will be inflationary effects, especially in the near term, if the bill is passed,” PolitiFact commented. “However, the broad consensus among analysts has been that the bill’s inflationary impact will be modest and brief.”

“We rate the statement False.”

PolitiFact has been previously excoriated for its take on the Kyle Rittenhouse case. The fact-checker has ruled that it was “false” to claim Rittenhouse’s gun possession was “perfectly legal.” The outlet stood behind that assessment even after the judge dismissed a gun charge in the case that indicated otherwise.

In September of 2020, PolitiFact also contended that former President Trump’s description of what happened in the shooting incidents that involved Rittenhouse was “false.” It claimed that he painted a “false picture” of what happened that night and that he omitted key information.

Psaki was dragged on social media for her claim:

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