White House economic advisor Brian Deese called for more government spending Wednesday in the aftermath of a Department of Labor report that inflation had hit a four decade high.
The Consumer Price Index has climbed 9.1% in the last year, the highest increase in a twelve-month period since December 1981. During a CNBC appearance, Deese called the report “backward looking” and encouraged Congress to spend more on semiconductors to restore the economy.
“I just want to underscore if there’s one thing to take away from this report it’s that there is more urgency now than ever in Congress moving to pass a bill to try to build more domestic semiconductors, to try to bring down the price of those goods,” Deese said. (RELATED: ANALYSIS: Five Signs Biden’s Economic Disaster Is About To Get Worse)
Deese also touted the slight decrease in gas prices which has occurred over the past month.
“You know, it’s backward looking,” Deese said of the report, “and it doesn’t reflect what we’ve seen over the last 30 days, which is a significant decline in gas prices, down about 40 cents.”
The price for a gallon of gas is down about 38 cents from the price last month, according to AAA.
CNBC host Carl Quintanilla pushed back on Deese’s claim that more government spending would solve the inflation crisis.
“Although that brings us right back to the circular argument, Brian, that more spending is not what you typically do in the face of high inflation. How do we break out of that circle?” Quintanilla asked.
“No, look, I think you have to look at the unique situation that we’re in as an economy and think about how do we build more supply, how do we increase the productive capacity of our economy, so that we actually can supply more goods, bring prices down,” Deese responded. “We know the answer on semiconductors exactly. We need more supply of those goods.”
House Democrats introduced a bill in January which included $52 billion aimed to boost domestic semiconductor manufacturing. The Senate version of this bill passed in June 2021, and the two chambers are currently negotiating a compromise package.
“We have inflation now because of lack of supply. And let’s increase supply,” Raimondo said.