Fetterman Says Tax Cuts Are Real Cause Of Inflation

[Screenshot CNN]

Brianna Lyman News and Commentary Writer
Font Size:

Democratic Pennsylvania Lt. Gov. and Senate candidate John Fetterman said Tuesday on CNN that tax cuts are the real cause of inflation.

CNN’s Don Lemon questioned Fetterman on what he believes is the biggest driver of inflation.

“What do you think the biggest cause of inflation is, and should the Biden administration be doing more?” Lemon asked. (RELATED: Psaki Says There Was ‘Not A Lot Democrats Could Have Done’ With Inflation)

“Well, I just do. I think that simply is — also, let’s talk about the trillions in massive tax — tax cuts to the corporate — tax structure is well true. You know, trillions of dollars that have added to the deficit, and now they still want to support those is well true. I think in terms of being very serious about addressing inflation is making sure that those rates are brought back in to align with what they should have been, where they’re able to fight that deficit,” Fetterman said.

Inflation increased at 0.4% in September from August while “core” inflation, which measures the price of goods excluding food and energy, hit a 40-year-high. Core inflation rose 6.6% year-over-year. The cost of food at home rose 13% year-over-year, while the cost of food away from home rose 8.5% year-over-year.

President Joe Biden signed the nearly-$2 trillion American Rescue Plan in March 2021, which included sending $1,400 stimulus checks to some Americans. Several economists, however, say while inflation would’ve likely risen given other factors such as the pandemic, the so-called rescue plan made things worse, The Washington Post reported. Francesco Bianchi of Johns Hopkins University co-authored a paper that attributed nearly half of inflation to the American Rescue Plan, according to The Post.

Economist Dean Baker, who works with the left-leaning Center for Economic and Policy Research, estimated the plan increased inflation by about two percentage points, PolitiFact reported.

“My main basis for saying this is that other wealthy countries, without remotely comparable stimulus packages, have seen comparable jumps in their inflation rates,” Baker said, according to PolitiFact.

Four economists at the Federal Reserve Bank of San Francisco said the fiscal policies enacted throughout 2020 and 2021 contributed to increasing inflation by three percentage points, according to The Post.

Former President Barack Obama’s top economic adviser Lawrence Summers criticized the American Rescue Plan as driving up inflation, according to The Post.

“We certainly could have had a world in which we had protected the economy and generated far less inflation. The likely consequence of the inflation we have run — in addition to substantial reductions in the real wages of workers — is going to be to bring on the next recession sooner than we otherwise would have had it,” Summers said, the outlet reported.