If you have been following President Biden, Vice-President Harris, Press Secretary Psaki, and any other administration affiliated social media accounts, about once a week, in harmony, you’re told that the Build Back Better Act “pays for itself” and “would actually reduce inflation” according to “17 Nobel laureates”. 

President Biden also uses this “17 Nobel Laureates” sales pitch when he’s out on the road trying to sell the plan to the American people. While giving a speech in Scranton, PA on October 20, 2021, President Biden boasted, “Seventeen Nobel laureates spontaneously — Nobel laureates in economy — sent me a letter three weeks ago saying it will also reduce, not increase inflation.”  A day later, during a CNN Town Hall on October 21^st, Biden said, “I had 17 Nobel laureates in economics send me a letter recently saying my proposals would actually reduce inflation, diminish inflation.”

Who are these 17 Nobel laureates and exactly what did they say in the open letter in support of Biden’s economic recovery agenda?  Certainly, receiving the Nobel Memorial Prize in Economic Sciences is a crowning achievement and evidence of unparalleled expertise. These distinguished Nobel laureates are expert economists and social / economic theorists. Most, if not all of these men can be described as advocates of the Keynesian or Neo-Keynesian theory. The majority of celebrated economists today subscribe to Keynesianism or a variant of the theories introduced by John Maynard Keynes beginning in the 1930’s. 

In the simplest terms, Keynesians believe that markets cannot naturally restore themselves because they are not self-regulating. Especially when nearing, or in a recession, Keynesians believe market stabilization requires government intervention through fiscal and monetary (central bank) policy changes. In contrast, laissez-faire, a French term that translates to “let you do” or “leave alone” is an economic philosophy that opposes government intervention in favor of free-market capitalism.  With this understanding, it is easy to see why these 17 Nobel laureates would support Biden’s largest government intervention into the U.S. economy since Franklin D. Roosevelt’s “New Deal”.

President Biden is well known for embellishing stories and being very loose with the facts.  His entire political career is riddled with cringeworthy gaffes and embarrassing moments.  Despite his propensity to weave tangled webs, he keeps on spinning.  Claiming that 17 Nobel laureates say his proposal will “actually reduce inflation” is yet another example of the fish getting bigger and bigger each time the story is told. 

This is exactly what the “open letter” states regarding inflation. “Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy, it will ease longer-term inflationary pressures.”  For the sake of argument, let’s assume this sentence is an accurate forecaster of Biden’s Build Back Better Act. Nothing in it suggests the plan will do anything to reduce the current inflationary pressures that have touched virtually all consumer goods and services at this time. “Longer-term inflationary pressures” could be 10 years from now or longer. The 17 Nobel laureates placed a safe bet. They might as well have said that there’s a 50/50 chance, as a result of more Americans being able to participate in the economy, that longer-term inflationary pressures will ease.

Nothing in the open letter in support of the Biden Administration’s economic recovery plan suggests that the Build Back Better Act will reduce or diminish inflation any time soon.  The President should stop talking as if his plan would have an immediate, positive impact on inflation if it becomes law. It will not. In fact, inflation may get worse in the short-term.

Another $2 trillion pumped into the economy will not reduce inflation. According to the U.S. Bureau of Statistics Consumer Price Index, the “all items” index rose 6.2 percent for the 12 months ending October 2021, the largest 12-month increase since the period ending November 1990. Inflation is at a 31-year high and President Biden wants you to believe putting trillions of more dollars into the money supply is going to somehow “actually reduce inflation”. You don’t need to be a Nobel Laureate in the economic sciences to know that math doesn’t add up.

The 17 recipients of the Nobel Memorial Prize in Economic Sciences the signed the Open letter from Nobel Laureates in support of economic recovery agenda:

• George A. Akerlof, Professor, Georgetown University
• Sir Angus Deaton, Professor, Princeton University
• Peter Diamond, Professor, Massachusetts Institute of Technology
• Robert Engle, Professor Emeritus and Co-Director of the Volatility and Risk Institute, New York University
• Oliver Hart, Professor, Harvard University
• Daniel Kahneman, Professor, Princeton University
• Eric S. Maskin, Professor, Harvard University
• Daniel McFadden, Professor, University of California, Berkley
• Paul Milgrom, Professor, Stanford University
• Roger Myerson, Professor, University of Chicago
• Edmund S. Phelps, Professor and Director of the Center on Capitalism and Society, Columbia University
• Paul Romer, Professor, New York University
• William Sharpe, Professor Emeritus, Stanford University
• Robert Shiller, Professor, Yale University
• Christopher Sims, Professor, Princeton University
• Robert Solow, Professor Emeritus, Massachusetts Institute of Technology
• Joseph Stiglitz, Professor, Columbia University