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Clive Crook

Build Back Better Would Make It Harder to Fight Inflation

As the Fed struggles to get monetary policy back on track, the last thing it needs is fiscal policy that pushes the other way.

Questionable timing.

Questionable timing.

Photographer: Paul Morigi/Getty Images North America

President Joe Biden’s Build Back Better plan is stalled, and the next steps are unclear. Some Democrats are talking about the need for new pandemic-relief measures, even as the White House is reportedly looking at a stripped-down version of the original proposal. Meanwhile, most analysts are giving short shrift to an issue that deserves more thought: how Build Back Better would make it harder to fight inflation. 

True, some of the same economists who (presciently, as it turns out) warned last year that the $1.9 trillion American Rescue Plan Act would increase inflation remain worried about inflation. But economists such as Larry Summers and Jason Furman also support Build Back Better.