Sen. Tim Scott Argues Biden Spending Is Contributing to Inflation Sen. Tim Scott, R-S.C., is seen in the senate subway during a vote on Tuesday, May 25, 2021. (Tom Williams/CQ Roll Call via AP Images)
By Nick Koutsobinas | Wednesday, 26 May 2021 06:07 AM
Sen. Tim Scott, R-S.C., warned that the Biden administration's massive spending due to the COVID-19 pandemic has resulted in inflation. In other words, all the money the Biden administration is spending to get the economy moving again may actually be doing more harm than good.
"The Biden's administration's approach to throwing tons and tons and tons into the marketplace has led to inflation. And inflation is a tax on every American family," Scott said on Tuesday, according to FOX Business.
"Therefore, every American family is paying higher gas prices, milk is up, eggs are up. Your staples are up. That means the good that you think you're doing by putting more cash into the economy is actually resulting in more inflation," he said. "We're slowing our own economic recovery because small businesses have said without question that they can't find people to go back to work."
However, massive economic spending is only one piece of the puzzle. According to a tweet on Tuesday from Peter Schiff, a former stockbroker for Shearson Lehman Brothers, "Our economic dependence on ultra-low interest rates prevents the Fed from using the monetary tools that finally brought the runaway inflation of the 1970's under control. We are sailing into these waters without the ability to change course or speed."
In April, the Labor Department reported United States consumer prices rose .8%, which would be the most significant monthly increase in a decade.
Scott derided his Democrat colleagues, saying, "connecting the dots should be easy but sometimes when you're lost in a philosophical discussion, you forget practical reality.
"That's part of the challenge in Washington, Washington is like a bubble, and people within that bubble don't necessarily understand and appreciate what's happening outside that bubble – one of the most important things is to spend as much time in your home state as possible and talking to your folks to remember why you are doing what you hope that it is to be accomplishing.
"Everyday folks – I consider myself one of them – who are putting gas in their car, you're looking at the gas price and it's 70 or 80% higher than what it was at the beginning of the year," Scott said. "You go to the store and try to find your normal groceries and you're stunned at it. And, frankly, if you're in the housing market, the lumber prices are up because of the transportation costs."
Scott said he expects the economy to go into recovery during the third and fourth quarter, but the grace period would only last for a moment. After which, "what will lag behind that recovery will be long-term effects of this cash infusion into the economy" as well as inflationary effects.