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A viral video of That of President Joe Biden Chief economic adviser Jared Bernstein appears to have difficulty explaining how monetary policy works, raising new questions about the administration’s handling of the economy.
Bernstein, who chairs the White House Council of Economic Advisers, was interviewed for a new film called “Finding the Money,” a documentary made by proponents of Modern Monetary Theory (MMT) – a controversial line of economic thought. One of the central principles of MMT is that government budget deficits This doesn’t matter for countries like the United States that borrow money in their own currency. Supporters argue that this means the government should use tax and spending policies to manage the economy and combat inflation instead of central bank monetary policies.
CLICK TO WATCH BIDEN ECON MAN STRUGGLES TO EXPLAIN MONETARY POLICY
“The U.S. government can’t go bankrupt because we can print our own money,” Bernstein says in the video. The interviewer then asked him: “Like you said, they print the dollar, so why is the government borrowing?”
Bernstein’s response seems to indicate, at best, uncertainty about monetary policy.
“Again, some of this stuff gets — some of the terms and some of the concepts are confusing. The government is definitely printing money, and it’s definitely lending that money by selling bonds. Is that what What they do? They sell bonds, yeah, they sell bonds, right? Because they sell bonds, and people buy the bonds and lend them money,” Bernstein responded.
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White House Council of Economic Advisers Chairman Jared Bernstein wrestled with a monetary policy issue in a clip released by the team behind a documentary touting the controversial Modern Monetary Theory. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images / Getty Images)
“Often, at least to my ear with MMT, the language and concepts can be unnecessarily confusing, but there is no doubt that the government is printing money and then using that money to uh, uh… .I guess I’ It’s just I can’t really, I don’t understand, I don’t know what they’re talking about It’s like the government is clearly printing money, they’re doing it all the time. time. borrowing, otherwise you wouldn’t be having this conversation about the debt and the deficit, so I don’t think there’s anything confusing there.”
Bernstein’s confusing response about monetary policy sparked criticism on social media of the Biden administration’s economic policies. FOX Business spoke with federal budget and economic experts who weighed in on the exchange.
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Bernstein was asked why the United States borrows when it prints money. (Photo by Mark Wilson/Getty Images/Getty Images)
Maya MacGuineas, chair of the Committee for a Responsible Federal Budget (CRFB), told FOX Business: “What you have here is a serious, credible economist – Jared Bernstein – trying to be polite about an absurd economic fairy tale that cannot even be called a theory. MMT is constantly reinvented by its advocates who use made-up excuses to explain why you don’t have to pay anything.
“First, Jared and the MMT group are a great reminder of why limited government is so important,” Norbert Michel, vice president and director of the Center for Monetary and Financial Alternatives at the Cato Institute, told FOX Business. “Fortunately, members of the administration (and Congress) don’t ‘run’ the economy, they just enact policies that affect people, and people have the opportunity to elect new politicians every year. two years.”
“Second, MMT proponents, whatever they say, claim that the government can simply print and distribute money without consequence, but history has already proven this kind of policy. leads to inflationand, depending on how the money is distributed, massive cronyism,” Michel added. “In the real world, there are always rent seekers and resource constraints.”
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Modern Monetary Theory (MMT) lies outside the mainstream of economic thought. Federal Reserve Chairman Jerome Powell said MMT was “simply wrong.” (Photo by Mandel Ngan/AFP via Getty Images / Getty Images)
THE White House Council of Economic Advisers did not immediately respond to a request for comment.
Bernstein is a longtime economic aide to President Biden, although he does not have an academic background in economics. He holds a Bachelor of Music degree from the Manhattan School of Music, as well as a Master of Social Work degree from Hunter College and a Doctorate of Social Work degree from Columbia University.
He taught at several colleges, including Columbia University and New York University, and worked as an economist for the Department of Labor during the Clinton administration. Bernstein has also worked at liberal think tanks, including the Economic Policy Institute and the Center on Budget and Policy Priorities.
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Bernstein worked as chief economist and economic advisor to Vice President Biden from 2009 to 2011 during the Obama administration. He served as an advisor to the Biden-Harris transition team, and after President Biden’s inauguration, Bernstein was appointed to the CEA.
He was confirmed as president of the CEA by 50 votes to 49. Senate vote in June 2023. The confirmation vote fell largely along party lines, with all Democrats voting in favor except Sen. Joe Manchin, D-W.V., who joined Republican senators for s to oppose the confirmation of Bernstein to the post.
