PRESS RELEASE: ECONOMISTS: AMERICAN RESCUE PLAN WILL BOOST GDP; CRITICS SHOULD STOP INFLATION FEAR-MONGERING

FOR IMMEDIATE RELEASE
March 17, 2021

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Maddy McDaniel, Communications Director

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ECONOMISTS: AMERICAN RESCUE PLAN WILL BOOST GDP; CRITICS SHOULD STOP INFLATION FEAR-MONGERING

Economic Policy Institute Research Director Josh Bivens: “I will start worrying about hypothetical inflation and overheating when inequality in the labor market is reversed.”

Former Federal Reserve Economist Claudia Sahm: “The risk of overheating is very low, and doing too little and not getting all of us to the finish line, would be unconscionable.”

Roosevelt Institute Fellow Mark Paul: “A tight labor market and a little bit of inflation would actually be a good thing, particularly given the horrendous inequality crisis we find ourselves in.”

The Economists On the Press Call Mirrored Recent Comments From Treasury Secretary Janet Yellen: Inflation before the pandemic “was too low rather than too high.”

OECD Says Public Investment In American Rescue Plan Will Increase Economic Growth By Nearly 4% This Year

Economic Experts With Goldman Sachs Have Raised Their GDP Growth Expectations For The U.S. Economy To 8% For 2021, A Feat That Hasn’t Been Achieved Since 1951

WASHINGTON, D.C. — During a press call hosted by Invest in America on Tuesday, economic experts discussed how the American Rescue Plan will significantly boost GDP and to debunk fear-mongering about inflation.

The economists on the call agreed with economic experts including Treasury Secretary Janet Yellen, who has said that the benefits of the American Rescue Plan far outweigh any concerns of inflation; Federal Reserve Chair Jerome Powell, who said that should inflation occur, “we have the tools for that, and we will use them;” and top economists at the conservative-leaning Mercatus Center and American Enterprise Institute, who said that “the evidence that high inflation is on the way is weak.”

Treasury Secretary Janet Yellen recently stressed that inflation before the pandemic “was too low rather than too high. If it turns out to be inflationary, there are tools to deal with that.”

Economic Policy Institute Research Director Josh Bivens, former Federal Reserve economist Claudia Sahm, and Roosevelt Institute fellow Mark Paul made the following statements on a press call hosted by Invest in America:

“Some critics of the American Rescue Plan claim we’ve done too much and they raise the specter of overheating to inflation. I think these concerns are far too overdrawn,” said Josh Bivens, research director for the Economic Policy Institute. “I will start worrying about hypothetical inflation and overheating when inequality in the labor market is reversed. For now, I’m basking in the glow of having learned from the mistakes we made in the past couple of recessions.”

“I am heartened by the historic legislation passed last week and by the administration and the Democrats in Congress stepping in and saying ‘We are not done,’” said Claudia Sahm, former Federal Reserve economist. “I have spent a lot of time in the last month thinking through the inflation risk. Inflation hawks have not learned from the Great Recession. The Democrats have. The risk of overheating is very low, and doing too little and not getting all of us to the finish line would be unconscionable.”

“The American Rescue Plan delivers sorely needed aid to fight the pandemic, support cash-strapped state and local governments, and deliver economic relief to financially struggling families across the nation,” said Mark Paul, Roosevelt Institute fellow. “A tight labor market and a little bit of inflation would actually be a good thing, particularly given the horrendous inequality crisis we find ourselves in. Running a cold economy leads to lackluster wage growth and the exclusion of millions of Americans from the labor market. Right now, we have a once in a lifetime opportunity to run a persistently hot economy to actually put the American people back to work and help them see sustained wage growth.”

About Invest in America

Invest In America is a national rapid response operation advocating for robust public investment to rescue the economy from the COVID crisis and create prosperity for the future, and to fight back against fear-mongers who use deficit concerns as a scapegoat to starve American communities and businesses of resources.

The operation consists of two components: Invest in America, the charitable and public education arm, which is a fiscally sponsored project of Economic Security Project funded by the William and Flora Hewlett Foundation and Economic Security Project co-chair Chris Hughes; and Invest in America Action, the advocacy and social welfare arm, which is a fiscally sponsored project of Economic Security Project Action funded by Chris Hughes and the Omidyar Network.

Learn more at InvestInAmericaNow.com and @InvestNowUSA, and InvestinAmericaProject.com.

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