Former Federal Reserve chairman Ben Bernanke, who served under former presidents George W. Bush and Barack Obama, says the United States is likely in for 1970s-style "stagflation" under President Joe Biden, the New York Times reported Monday.
Bernanke, the Fed's chairman during the Great Recession that began in 2008, said he hopes Chairman Jerome Powell can reduce inflation without taking the extreme measures of the 1970s or causing a recession.
"Even under the benign scenario," however, the country will probably go through "a period in the next year or two where growth is low, unemployment is at least up a little bit, and inflation is still high," Bernanke predicted. "So you could call that stagflation."
Bernanke is not the only Obama administration official to predict worsening inflation under Biden. Former Obama economic adviser Steven Rattner in March called rising costs "Biden's inflation." Former Treasury secretary Lawrence Summers, who served as Obama's director of the National Economic Council, has warned for at least a year about Biden's economic policies, blaming the president's American Rescue Plan for skyrocketing inflation and blasting Biden's plan to cancel student loans.
Bernanke also criticized Biden's plan to cancel hundreds of billions of dollars in loans, calling the idea "very unfair."
"Many of the people who have large amounts of student debt are professionals who are going to go on and make lots of money in their lifetime," Bernanke said. "So why would we be favoring them over somebody who didn’t go to college, for example?"
Biden said in April that he is considering mass student debt cancellation, though even many Democrats doubt that such a plan is legal.
While the Times wrote that he "isn't worried about a 2008-style crisis," Bernanke is "concerned about housing prices, saying they have 'risen a lot, like 30 percent in the last two years.'"
"That's something that needs to be watched," Bernanke warned.
Biden, who for months said rising prices wouldn't be here long, is facing inflation levels not seen in 40 years. Gas prices have shot back up this month to record highs. Experts predict that canceling student loans will drive up inflation even higher, the Washington Free Beacon has reported.