In new research, Joint Economic Committee Republicans, led by Ranking Member Sen. Mike Lee (R-UT), present evidence that rising prices have resulted from both transitory inflation and more lasting inflation caused by government stimulus. If Congress continues to push government spending to new heights, inflation likely worsens.
Prices today are rising at their fastest pace in decades and American concern about inflation is growing. Yet over a year after the recession officially ended, Congress continues to pursue massive new government spending measures—including a $3.5 trillion budget resolution, the single largest spending package in history.
Of the report, Sen. Lee said, “Inflation is rising at its fastest pace in three decades, and it’s gnawing away at Americans’ wages, savings, and aspirations. It’s making it harder for families to afford gas and groceries and make ends meet. In our research released today, the Joint Economic Committee found that these rising prices for everyday goods are being turbocharged by Congress spending money it simply doesn’t have. If we don’t stop this runaway train, inflation could get worse. The best way to strengthen our shared prosperity is to rein in spending and return to the pro-growth policies that made the pre-pandemic economy so successful.”
We urge Congress to consider the inflationary risks of new stimulus. Rising prices are harming American families by reducing their earnings and undercutting their purchasing power. The American people would be better served by policies geared toward returning Americans to work.
The Joint Economic Committee is Congress’s bicameral economic research center and home of Sen. Lee’s Social Capital Project.