Fmr. Obama Treasury Counselor Rattner: Omnibus, Like Most Fiscal Policy, ‘Going the Wrong Way’ on Inflation and Will Make It Worse

On Friday’s broadcast of MSNBC’s “Morning Joe,” Steve Rattner, who served as counselor to the Treasury Secretary in the Obama administration, stated that fiscal policy, like “the federal budget deficit, as well as various other things that the White House can do, have been mostly going the wrong way.” And the omnibus bill will lead to “more inflation, not less inflation.”

Rattner said, “Well, unfortunately, the policies outside of the Fed’s regime, which are basically what we call fiscal policy, the federal budget deficit, as well as various other things that the White House can do, have been mostly going the wrong way. This omnibus bill that will get passed presumably today, the $1.7 trillion spending bill, does increase the deficit more. It spends more, and all of that actually creates more inflation, not less inflation. The President’s student debt relief plan, whatever you think about the merits of canceling student debt, economists will tell you, it does add to inflation, because it, again, puts more money out in the economy and gives people more to spend.”

He continued, “The kinds of things that we could be doing to alleviate the inflation problem, not in the next few months, but over a slightly longer term, would be things like increasing immigration. We are really, really short of workers in this country, and we have — President Trump clamped down on immigration. It has not really been changed since the Biden administration came to office. We need more workers here. We could bring in lots of legal immigrants to help solve the wage inflation problem. So, unfortunately, I would have to say that, as many good things as the Biden administration is doing to help people, to help longer-term priorities, there’s not much that they can or even are trying to do at the moment to really alleviate the inflation problem.”

Follow Ian Hanchett on Twitter @IanHanchett