Pat Toomey: Massive Excess Spending Could Cause Long-Lasting Severe Inflation | Video | RealClearPolitics

Pat Toomey: Massive Excess Spending Could Cause Long-Lasting Severe Inflation

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GOP Sen. Pat Toomey warned Sunday on CNN that more inflation will be the result of Democrats' "massive" spending plans.


SEN. PAT TOOMEY: So, let me -- so, first of all, I'm not -- I don't want to negotiate the numbers here. I'm not a negotiator. I have been advising and discussing with the Republican negotiators how they might think about this category.

But I will tell you, a very, very important category for me is how all this is going to get paid for. We just spent $1.9 trillion that had -- there was absolutely no need for. A lot of that money hasn't been spent yet, but it will.

And now we're talking about another $600 billion on top of the ordinary spending. And we know, in a couple of months, the Democrats are going to pass what they call a $3.5 trillion bill, but, really, over 10 years, it's over $5 trillion.

This is completely out of hand. There are people who think this is Monopoly money, but it's not, Jake. And so I'm concerned. I think the way we should pay for this increase in infrastructure spending is by repurposing money we already approved, but hasn't yet gone out the door.

But that's a point of great contention with the Democrats. So it's not, to me, just the top line that matters. It's also how we're funding it.

JAKE TAPPER: At a CNN town hall this week, President Biden dismissed concerns of Republicans and some economists that all this increased federal spending is going to cause long-term inflation.

The president argued that the price increases what we're seeing now are a result of the economy picking up again after the pandemic. Do you think he's wrong?

TOOMEY: Well -- well, certainly, he's factually wrong on that last point you just made.

If you look at the price level of -- in our economy today, and compare it not to a year ago, when we had a big decline in prices, but rather to two years ago, before COVID ever hit, before we had the decline and then the recovery, we're running at a 25-year high rate of inflation.

And it's not got a mystery as to why. A big part of the reason is a massive expansion of the money supply. We have expanded the money supply the most since World War II. And the Fed continues to buy $120 billion worth of securities, pumping that money into the economy, despite the fact that we have strong growth.

So there's no question we have serious inflation right now. There is a question about how long it lasts. And I'm just worried that the risk is high that this is going to be with us for a while. And the Fed has put it put itself in a position where it's going to be behind the curve.

You combine that with massively excess spending, and it is a recipe for serious problems. That's one of the things I'm worried about.
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