US Treasury Secretary Janet Yellen denied reports that she was trying to cut spending on President Biden’s COVID-19 spending package, despite a book claiming she believed “too much government money was pouring into the economy.”
Yellen responded on Saturday to an excerpt from a biography that said she wanted a smaller package than the US $ 2 trillion rescue plan (ARP), which Biden signed into law in March 2021[ads1], pushing the government’s total pandemic aid to nearly $ 6 trillion.
“I have never called for a smaller US rescue plan package, and I believe that ARP played a key role in driving strong growth through 2021 and beyond, with US real GDP growth exceeding other advanced economies and our labor market recovering. faster than historical experience, “Yellen said in a statement on Saturday.
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An upcoming biography of Yellen says that she thought ARP represented a too large and too fast supply of state dollars to the economy.
“Privately, Yellen agreed [former Treasury Secretary Lawrence] Summers that too much government money flowed into the economy too quickly, “wrote Owen Ullmann, a longtime Washington journalist and author of” Empathy Economics, “which was due out Sept. 27. The book excerpt was first reported by Bloomberg.
Biden took office while “the nation was facing acute economic challenges”, and there was a high risk that “a downturn that could match the Great Depression”, Yellen said on Saturday.
The money given in ARP allowed the country better “weather shock for our economy like Russia’s war in Ukraine and subsequent waves of COVID-19,” Yellen said.
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According to Ullmann’s book, which according to publisher PublicAffairs had “unfiltered access” to the finance minister, Yellen’s concern about inflation “is the reason why she had unsuccessfully tried to reduce the $ 1.9 trillion aid plan by a third in early 2021 before Congress. adopted the “huge program. Yellen” would have preferred something closer to $ 1.3 trillion, according to colleagues, “Ullmann wrote.
The Ministry of Finance, which responded to Bloomberg’s report, stated that Yellen never called for a smaller package, Bloomberg reported.
“High inflation is now the administration’s top economic priority,” Yellen said on Saturday. “We are committed to addressing this by respecting the independence of the Federal Reserve and giving them room to act. We also use the political tools we have to deal with bottlenecks on the supply side and urge Congress to act to lower some of the “High costs are facing Americans in areas such as prescription drugs. We also support reducing the deficit to ease inflationary pressures.”
On Tuesday, Yellen admitted that she was wrong about the serious inflation, especially on gas and food prices.
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“I think I was wrong then regarding the path inflation would take,” Yellen said in a CNN interview. “As I mentioned, there have been unforeseen and major shocks in the economy that have increased energy and food prices and supply bottlenecks that have hit our economy hard that I did not fully understand at the time.”