In the State Dining Room of the White House on February 5, President Biden argues that the US economy is at greater risk from doing too little to fight the recession than from doing too much. His administration had pushed a sweeping stimulus package meant to reduce unemployment, inject new firepower into the anemic labor market and grow the economy rapidly. “If we make these investments now, with interest rates at historic lows, we will generate more growth, higher incomes, a stronger economy, and our country’s finances will be in a stronger position as well.” , Biden said. “So for me the biggest risk is not if we go too big, if we go there, it’s if we go too small.”
Biden is talking about pumping nearly $2 trillion in new federal spending into the faltering economy, even as some question the total, coming so soon after previous stimulus efforts, citing the risk of inflation.
About two weeks later, Federal Reserve Chairman Jerome H. Powell said the money the government is spending on stimulus and covid relief shouldn’t be an issue. “I really don’t expect us to be in a situation where inflation is going to get to embarrassing levels,” Powell told the Senate Banking Committee, as Congress nears approval of the $1 stimulus package. $.9 trillion from Biden. “That’s no problem this time.” An “explosion” of new spending should not cause unwanted inflation, he says.