Treasury Secretary Janet Yellen believes that the Biden administration’s spending agenda is worthwhile, despite potential spikes in inflation.
In an interview with Bloomberg News on Sunday, Yellen — who served as Chair of the Federal Reserve from 2014 to 2018 — affirmed that “if we ended up with a slightly higher interest rate environment” as a result of President Biden’s proposed outlays, it would “actually be a plus for society’s point of view and the Fed’s point of view.”
In the first months of his administration, President Biden has proposed trillions of dollars in new spending — including the American Jobs Plan, the American Families Plan, and a $6 trillion federal budget that incorporates both pieces of legislation.
Economists, however, are skeptical about the omnibus packages’ ability to encourage long-term economic growth. For instance, analysis from the University of Pennsylvania’s Wharton School shows that the American Jobs Plan, American Families Plan, and already-passed American Rescue Plan would create government debt that would