Inflation can be tamed by slowing the economy or slowing spending, and former Trump administration Labor Secretary Alex Acosta said on Newsmax that the Biden administration is dangerously avoiding the latter.
“The Federal Reserve’s No. 1 job is to control inflation, and right now, the only approach we’re taking is to slow down the economy, and it’s a shame that we could also control inflation by reducing government spending — but right now there’s little talk of doing that,” Acosta said Monday on “National Report.”
This is an important week for retail earnings reports, which can tell the story of the economy, which is staying afloat on growth, despite the Biden administration’s best efforts to slow the economy as the only tactic to slow massive inflation, according to Acosta.
“The bottom line is Americans are consuming, Americans are buying and, despite what the Federal Reserve is trying to do, Americans are resilient, but this is going to present a problem for the Federal Reserve,” Acosta said.
“The headline is the American economy remains resilient, despite everything the government is doing.”
The exploding debt will ultimate for a debt ceiling raise, but it has to come with a reduction on Democrats’ massive spending agenda, Acosta said.
“This is the problem that we’re facing, and will they reach a deal? Eventually they have to reach a deal,” Acosta said. “There is no choice but to reach a deal. Unfortunately, the White House is playing chicken, they’re drawing lines in the sand, and to reach a deal, they have to start saying what they will negotiate on.
“It’s getting more and more expensive for Americans. Yes, they’re consuming, but this is really hurting Americans, and the way to address this is not by slowing our economy down, but by reaching a deal that lowers government spending.”
Acosta said President Joe Biden and Senate Democrats should be listening to the Republican plan to slow spending instead of slowing the economy.
“We are about to cross the $1.5 trillion threshold for the deficit so far this year, and House Republicans are simply asking, Let’s reduce government spending,” Acosta said. “The debt ceiling right now is $31.4 trillion and before we increased that further, let’s come to a deal to reduce government spending.
“So instead of hurting Americans by increasing prices at the grocery store, by increasing the cost of mortgages, we can start to help Americans by making goods not only cheaper but by producing more, and the White House needs to start dealing with them.”
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