Chancellor of the Exchequer Janet Yellen He said Thursday that a major stimulus package remains necessary to bring the economy back to full strength, despite momentum indicating that growth has stalled on a faster-than-expected start in 2021.
In an interview with CNBC, the Biden administration’s chief economist said the $ 1.9 trillion bid could help the United States return to full employment within a year.
“We think it’s extremely important to have a great package [that] Addresses the pain this caused – 15 million Americans are late in paying their rents, 24 million adults and 12 million children don’t have enough food, and small businesses are failing, “Yellen told CNBC reporter Sarah Eisen duringClosing Bell” Interview.
“I think the price of doing less is much higher than the cost of doing something big. We believe the benefits will far outweigh the costs in the long run,” she added.
Yellin said she is not concerned that all government spending may cause future inflation.
“Inflation has been very low for more than a decade, and you know it is a risk, but it is dangerous that the Federal Reserve and others have tools to deal with it,” she said. “The greatest risk is to sabotage people, as the existence of this epidemic leads to life-long losses in their lives and livelihoods.”
Her comments come against the backdrop of a bright economic picture in the United States, such as The COVID-19 pandemic Recede.
Recent data showed extraordinary Power in retail salesAlbeit thanks to late 2020 stimulus checks from Congress, as well as continuing gains in real estate and manufacturing. A tracker from the Federal Reserve of Atlanta that tracks GDP growth points to a gain of 9.5% in the first quarter.
However, the employment picture remains murky, with 10 million workers still without jobs, including millions related to business closures imposed by governments in response to the pandemic. Earlier Thursday, the Labor Department reported Another 861,000 claims for unemployment benefits Last week, it’s still much higher than anything seen since the coronavirus emerged.
It is these displaced workers who Yellen feels policy must be directed. As part of the latest round of stimulus spending, Mr. President Joe Biden He wants to send $ 1,400 checks to millions of Americans.
“You know, there is a lot of pain in this economy,” Yellen said. “I think these checks will really provide relief and help revive our economy, and give people money to spend when we can get out again and go back to our previous lives. So you know, there are a lot of families who work on the sidelines. And I think these checks really help them.”
Paying for various stimulus initiatives is not something the administration and Fed officials now focus on. The Congressional Budget Office expects a budget deficit of $ 2.3 trillion in fiscal year 2021 without counting all the extra spending, and Yellen acknowledges that there are “likely” to be “tax increases to pay at least a portion of them that are likely to scale slowly over time.”