Janet Yellen says the United States needs an ambitious fiscal policy

Janet Yellen Economy

The economist has defended that the pandemic is not the only economic problem in the country.

The Secretary of the Treasury of the United States, Janet Yellen, has defended before the House of Representatives that the world’s largest economy needs to implement “an ambitious fiscal policy” to promote recovery from the crisis and alleviate the deficit in public investment accumulated for decades.

In her speech, the economist has defended that the pandemic is not the only economic problem in the US, since “long before a single American was infected with Covid-19“, millions of people faced a series of structural economic challenges in the long run that undermined their ability to earn a living.

In this sense, Yellen has recognized the impact of wage inequality between the highest and lowest income scales, as well as between different regions of the country, the persistence of wage differences based on gender and race, the fall in participation of the workforce, in addition to new challenges such as climate change.

“There are clear reasons why these destructive forces have festered. The private sector does not make enough investments to reverse them. For 40 years we have not done so,” she acknowledged.

In this way, Yellen has pointed out the need to remedy this lack of investment. “We need an ambitious fiscal policy to begin to reverse these trends,” he assured, noting that the Budget proposed by the Biden Administration “is both fiscally strategic and fiscally responsible” and will be amortized through a tax reform that will not affect the majority. of citizens.

DISCARD THE RISK OF HYPERINFLATION

During question time, the US Treasury secretary pointed out that “the deficit and the debt matter”, while she reduced fears about the evolution of prices, underlining that the country does not face the risk of hyperinflation.

“We have had several months of high inflation, something that many economists, including myself, believe will be transitory as the economy fully recovers,” she said.

On the other hand, Yellen has expressed optimism regarding an upcoming agreement to set a global minimum corporate tax, after consensus within the G7 to promote a universal tax of at least 15%.

On this issue, he recalled that US companies will not be penalized in their competitiveness, since the gap with respect to jurisdictions that apply a lower tax on corporate profits will be reduced to about six percentage points from the current ten.