Janet Yellen disagreed in the government on the size of the economic aid package during the pandemic
US Treasury Secretary Janet Yellen admitted that President Joe Biden was wrong to inject $1.9 trillion into the economy in 2021. According to her biographer, journalist Owen Ullmann, Yellen feared that the size of the aid package during the pandemic raises prices.
Ullmann will release the book “Empathy Economics” about Yellen’s career on September 27. Excerpts from the work were published by the Bloomberg on Friday (June 3, 2022). In one of them, the journalist states that, in 2021, the Secretary of the Treasury tried to reduce the contribution from US$ 1.9 trillion to something around US$ 1.3 trillion.
“She was worried that so much money in the pockets of consumers and businesses could drive prices up at a time when the pandemic had caused a severe shortage of goods with unprecedented demand.”, wrote Ulmann.
In a note to Bloomberg This Saturday (June 4, 2022), Yellen denied that she had acted to reduce the ARP economic aid package (American Rescue Plan or, in free translation, North American Rescue Plan).
“I believe ARP played a pivotal role in driving strong growth through 2021 and beyond, with US real GDP growth outpacing other advanced economies and our labor market recovering faster relative to historical experience.”, declared.
The measure was approved in Congress in March 2021. It was the 3rd aid package because of the pandemic. The other 2 were approved during Donald Trump’s administration. They totaled US$ 3 trillion.
Faced with the possibility that aid would be less than $1 trillion, Yellen supported the proposal.
According to Ulmann, the secretary believed that the increase in inflation would be transitory. Yellen admitted the mistake in an interview with CNN on May 31, although he said that the new variants of covid-19 and the war in Ukraine were unforeseen events that contributed to the rise.
US inflation reached 8.5% in the 12 months ending in March. It is the highest level for the US consumer price index since the period ending December 1981. The data is from the CPI (US Consumer Price Index) and was released in April.
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