On Tuesday, Janet Yellen will perform at hearings in the Senate Finance Committee, which will consider its candidacy for the post of Minister of Finance of the United States. If the administration of Joe Bayden, who will come to the position of President, "will not act quickly and will not increase government spending on the economy," there is a risk of a "longer and painful recession", and on the economy there may be "for a long time scars".
This is stated in the text of the speech of Yiellen, which has at the disposal of FINANCIAL TIMES. In it, she explains the need for a $ 1.9 trillion and subsequent budget injections to the economy as proposed by the Biden's package of anti-crisis measures.
According to the former chairman of the federal reserve system, concerns about the growth of the budget deficit so far should be moved to the background. "Neither the elected president nor I propose this package of stimulating measures without assessing the consequences for the country's debt burden, the Yellen states. "But right now, when interest rates are in historically low levels, the smartest thing we can do is to act in a large one. I am confident that in the long run, the benefits will greatly exceed the costs, especially if we take care of helping people who have experienced difficulties for a very long time. "
US public debt reached $ 21.6 trillion, exceeding GDP size.
The Iellen position should provide additional support for the implementation of the measures proposed by Biden, which he introduced last week. Biden wants Congress to approve them immediately after its inauguration. His plan provides for the provision of financial assistance to states, direct payments to citizens, the extension of additional federal payments to the unemployed, an increase in tax deductions for children and financing measures to combat the coronavirus pandemic.
All this is in addition to the inhibited spring first package of anti-crisis measures for $ 2.2 trillion and the second package of $ 900 billion, approved by Congress and the Donald Trump administration in December.
Yelevlen, judging by the text of her performance, wants not just to help the economy with money, but to rebalacent it, so that during the exit of the crisis try to solve the problems that prevent its development associated with deeply rooted property and racial inequality. "People worry that recovery [Economics] will be to-shaped. But even before the first American was infected with Cake, we lived in an embedded economy - where wealth increased wealth, and the standard of living of working families decreased more and more. This is especially true of people with a different skin color, "says Yellen. "We have to restore our economy so that it provides greater prosperity for more people, and ensure that American workers can successfully compete in an increasingly competitive world economy."
The adoption of the anti-crisis package is the priority of the Biden team. But it also prepares another multi-billion dollar plan, which must maintain economic development through state investment in infrastructure, green energy, health care and education. At least partially, these expenses will be financed by increasing taxes on rich people and companies.
A number of high-ranking Republicans have already made criticized some aspects of the Bayden fiscal plan, but others hope that it will be possible to achieve compromises. Yellen promises to strive to implement the goals of Byyden "on a bipartisan basis."
Futures for US indices rose by 15.00 Moscow time on the eve of the performance of Janet Yellen and reporting a number of companies, including Bank of America, Goldman Sachs and Netflix: Futures on S & P 500 - by 0.7%, on NASDAQ 100 - by 0.9%. Yellen "holds keys to the keys to unprecedented budget financing in his hands," said Louis San, chief economist Allianz: "People will cope with her exclusively pragmatic approach to the fight against the crisis, similar to how it acted at the Fed Chapter."
Yelevlen also jokes, a family life helped to prepare for hearings in the Senate. In the speech, she calls her husband, the Nobel Prize laureate in George Akerlof's economy and the Son of Robert "not only with wonderful people, but also beautiful - and self-confident - economists." Therefore, Yelevlen "accustomed to home to argue about these things." "Let's argue in the Senate," she offers.
Translated Mikhail Overchenko