Psaki told CNN on Friday that inflation is a “good thing” because it indicates that “consumers” are buying more things.
In reality, inflation is largely the result of the government itself pumping more money into the economy to cover the cost of its excess spending, thereby lowering the value of the currency.
Wealthy indivudials who have investments in non-monetary assets—be it stocks, real estate or precious metals—are the primary beneficiaries, while lower-income indivuduals may benefit from greater government spending or higher minimum wage.
For a large portion of the middle class, however, it is a defacto tax on top of the Biden administration’s plans for additional tax increases.
When pressed on the subject of extreme inflation caused largely by the Biden administration, Psaki first deflected to blame Trump, then circled back to claim that higher gas and food prices under the current administration were a sign of improvement rather than mismanagment.
“The fact is the unemployment rate is about half what it was a year ago. So a year ago, people were in their homes,” she said, ignoring recent numbers that showed abysmal job growth falling far short of projections.
“Ten percent of people were unemployed,” she continued. “Gas prices were low because nobody was driving. People weren’t buying goods because they didn’t have jobs. Now more people have jobs. More people are buying goods. That’s increasing the demand. That’s a good thing.”
Using her economic expertise to predict the future, Psaki, then suggested that we need not worry about good inflation for much longer.
“People should know that inflation is going to come down next year. Economists have said that,” Psaki claimed. “They are all projecting that. But we’re working to attack these cost issues that are impacting the American people every single day.”
Even if the rate of inflation comes down, the cost of goods is unlikely to come down with it, meaning the claim is misleading at best.
Federal Reserve chairman Jerome Powell has supplied few answers for massively increasing prices.
“As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors,” Powell said last month. “These effects have been larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run goal 2% goal.”
Yet the Democrats have responded by simply pumping more money into the economy, causing many to question what direction they have in mind for America.