Washington's economic blame game has fully kicked off! Kevin Hassett is going all out, pointing the finger at the massive fiscal stimulus of the Biden era as the main cause of high inflation.
National Economic Council Director Kevin Hassett said the US economy is still digesting the impact of pandemic-related fiscal stimulus during former President Biden's term, and attributed part of the pressure from the high inflation period to subsequent large-scale spending policies.
Hassett said Tuesday on a program that the US is "still struggling to get out from under" the effects of pandemic-era spending. He argued that while the original goal of pandemic fiscal support was to fill the economic gap, the subsequent spending scale exceeded what the economy actually needed.
"We wanted to fill the gap, but not do more," Hassett said, referring to pandemic stimulus policies during Trump's first term. He then said the Biden administration continued to maintain pandemic-era spending levels and directed funds to other areas, which was one of the important factors leading to subsequent problems.
These remarks came as the US enters the later stages of the midterm election cycle, with inflation, cost of living, and economic performance becoming key issues of debate between the two parties. Trump administration officials have recently repeatedly emphasized the connection between current economic problems and the policies of the previous administration.
The Impact of Pandemic Stimulus on Inflation Remains Controversial
Biden signed the $1.9 trillion American Rescue Plan in March 2021, one of the largest fiscal stimulus measures in the US after the pandemic. Some economists believe the plan expanded demand and further pushed up inflation pressure during a period of supply chain constraints; however, the economics community remains divided on the specific degree of its impact.
Hassett's remarks continued the long-standing view of the Trump administration that additional fiscal spending after the pandemic was one of the important reasons for rising US inflation. However, inflation changes are also affected by multiple factors, including supply chain disruptions, energy price fluctuations, labor market changes, and global geopolitical conflicts.
The US Consumer Price Index (CPI) rose significantly in the first two years of Biden's term and peaked at about 9% in the summer of 2022. Inflation then gradually fell back, and by the time Trump took office again as president in January 2025, CPI growth had dropped to about 3%.
Current Energy Shocks Are Pushing Price Pressures Back Up
Although post-pandemic inflation has cooled significantly, a new round of pressure in energy markets this year is once again affecting US price trends. The conflict between the US and Iran and the ongoing Russia-Ukraine war continue to affect global energy supply, driving up oil and fuel prices and increasing uncertainty about the path of inflation.
Recently, the market has simultaneously faced multiple factors including high energy costs, high interest rates, and fiscal deficits. The Federal Reserve launched its rate hike cycle in September, and policymakers continue to watch whether inflation will come under renewed pressure due to rising energy prices.
Hassett said the Trump administration is responding to current challenges through its own economic policies, and emphasized that the scale of stimulus taken during the early stages of the pandemic in Trump's first term was reasonable.
Economic Policy Debate Enters Election Cycle
Hassett's statement also reflects the policy debate between the two parties in the US over economic performance. Trump administration officials typically link high prices, housing costs, and some economic pressures to Biden-era policies; Democrats emphasize that current price pressures are affected by multiple factors including global energy markets, corporate pricing, and supply chain changes.
As the midterm elections approach, economic affordability has become an important issue for voters. Hassett's remarks mainly focused on the relationship between fiscal spending and inflation, but the specific degree of impact of pandemic stimulus policies on price increases remains a question of ongoing discussion in the economics community.
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