‘Democrats spent 2021 trying to respond to inflation with even more reckless spending, and now they are spending 2022 trying to respond to a looming recession with gigantic tax hikes… Democrats have quite likely inflated their way into a recession and now they want to pile on historic tax hikes to make it worse.’
WASHINGTON, D.C. – U.S. Senate Republican Leader Mitch McConnell (R-KY) delivered the following remarks Thursday, June 16, 2022 on the Senate floor regarding stagflation:
“Before Democrats dumped $2 trillion on the economy last year, experts warned that such reckless spending would not just raise prices for working families, but could also trigger a full-on recession.
“In February of 2021, for example, a prominent economist testified right here on Capitol Hill that Democrats’ runaway spending might back the Federal Reserve into a corner. It might leave the Fed no choice but to sharply raise interest rates. And that would not just slow down our economic recovery, but potentially shift it into reverse.
“Sound familiar? That is exactly what’s happening before our eyes.
“Yesterday, a few days after a far worse than expected inflation report for the month of May, the Fed announced the biggest interest rate hike in 28 years. And they signaled more big increases may be on deck soon.
“The Fed had acted too slowly on the incorrect presumption that inflation would fade away. Now that it hasn’t, they have to make up for lost time.
“The stock markets that carry Americans’ retirement savings have been in free fall. The S&P 500 has lost a full fifth of its value in just six months.
“Americans’ consumer confidence just nosedived to its lowest point ever recorded — worse than at any point during the 2008 recession, worse than the early panic over COVID.
“The percentage of small-business owners who say they’re optimistic about the near future has never been this low in the entire 48-year history of that survey.
“And signs suggest this may be just the beginning of the pain for the American people.
“Just three months ago, the Fed predicted we would not have to see rising unemployment until 2024. Yesterday, they announced they now see unemployment increasing this year, next year, and the year after that.
“Just between March and May, their official estimate for our country’s economic growth in 2022 plummeted by 40%.
“It looks increasingly like Democrats may have driven America towards a full-on recession.
“The term ‘stagflation’ was invented to describe the most painful economic condition for workers and families. It means the worst of three worlds at once: High inflation, slow growth, and rising unemployment.
“Unless something changes, and we all hope it does, this appears to be exactly the trajectory on which Democrats’ policies have put our country.
“The last time we had a unified Republican government, our policies created low inflation, robust growth, and record low unemployment. Sole Democratic Party control has produced something very different.
“But unbelievably, the same Washington Democrats who dug this hole seem unwilling to put away their shovels. They want to keep digging. With our economy trending towards a possible recession, some of our colleagues are trying to restart discussions about massive trillion-dollar-plus tax hikes.
“It beggars belief, Madam President. Democrats spent 2021 trying to respond to inflation with even more reckless spending, and now they are spending 2022 trying to respond to a looming recession with gigantic tax hikes.
“Democrats have quite likely inflated their way into a recession and now they want to pile on historic tax hikes to make it worse.
“In every poll, in every survey, the American people make their views of the Democrats’ economic policies crystal clear.
“For the sake of the country, let’s hope our colleagues remember the first rule of holes — and stop digging.”