“Inflation is entirely due to the supply chain,” said the American president on Wednesday during his press conference.

Factories around the world have been disrupted by Covid-19, which has derailed transport, causing shortages and delays and driving up prices.

In the United States, inflation reached 7% in 2021, a rate the country had not seen for nearly 40 years.

The Republican opposition accuses Joe Biden of having caused such a surge in prices with overly broad stimulus plans and spending.

She now denounces "Bidenflation".

“To find the roots of current inflation, we would have to go back,” lamented Stephanie Bice, Republican elected to the House of Representatives, Wednesday during a round table on the subject.

"Last year, the glut of federal dollars that was pumped into our economy fueled the price spike," she said.

In the line of sight, the emergency plan of 1,900 billion dollars that Democratic President Joe Biden had adopted in March 2021, just after his arrival at the White House.

Republicans strongly opposed it.

Paved in the pond

For some economists, new aid was necessary, but less broad and more targeted.

"In my opinion, last year a bailout package was much needed but it should have been smaller," Jason Furman, a Harvard economics professor and former House economics adviser, told AFP. White under Barack Obama.

US President Joe Biden during a press conference at the White House on January 19, 2022 in Washington MANDEL NGAN AFP

“With hindsight, instead of being $2 trillion, it could have been just $1 trillion,” he added.

At the time, another Democratic economist, Larry Summers, had thrown a stone into the pond by warning that this plan, although "admirably ambitious", could trigger "inflationary pressures not seen for a generation".

Bill Clinton's former Treasury secretary and Barack Obama's main economic adviser had spoken of a risk of overheating, economic growth out of control, with demand so strong that supply no longer follows, causing price increases.

The eurozone also saw prices rise, but only 5%, according to Eurostat data released on Thursday.

“The United States and Europe are facing the same inflationary pressures around oil prices, the global supply chain and other effects of the pandemic,” according to Jason Furman.

But "the United States has done much more to give money to households, which has led to both faster GDP growth in the United States and higher inflation."

"Direct consequence"

"Inflation in the United States is, to some extent, a direct consequence of income support, combined with rigid or disrupted supply," OECD chief economist Laurence Boone said Monday. a meeting of the Eurogroup.

On the other hand, "the main driver of inflation in the euro zone is the price of energy".

Inflation in the United States Erin CONROY AFP/Archives

According to her, this is due to the differences in policy on both sides of the Atlantic from the start of the Covid-19 crisis: Europe has sought to keep employees in office despite the paralysis of activity, when the United States allowed companies to lay off workers, then distributed financial aid to households.

In one year, between March 2020 and March 2021, some 5,000 billion dollars, more than the GDP of Germany, were paid to small businesses, but also to households.

Checks and direct payments, generous unemployment benefits, tax credits for families with children, have thus come to swell the bank accounts of Americans and have enabled the world's largest economy to maintain the functioning of its economic engine, consumption.

© 2022 AFP