“Interest rates are at historical lows. The smartest thing you can do now is act big.”
The next US administration’s nominee for Treasury Secretary Janet Yellen will make a statement in the US Congress on the 19th. This means that Congress must quickly pass an additional $1.9 trillion in economic stimulus packaged by Biden-elect.
On the 18th (local time), the Wall Street Journal (WSJ) and other US media reported that the nominee Yellen got all the comments to be made at the approval hearing of the Senate Financial Committee on the 19th. “Without further action, we are at risk of getting into a longer and more painful recession, which will damage the economy in the long run,” said Yellen.
On the 14th, Biden-elect unveiled an additional support plan, the American Rescue Plan (ARP). The stimulus bill, which is worth $1.9 trillion (approximately 2082 trillion won), △A check for an additional stimulus package of $1400 per person ($600 is added at the end of December, which is $2000) △The federal government’s additional unemployment benefit was raised to $400 a week and in September The benefits were extended by the end of the year, △The federal government’s minimum wage was raised to $15 per hour, △deferred for eviction and foreclosure by the end of September △$35 billion in support to state and local governments △$70 billion in support for corona tests and dissemination.
The Republican Party is criticizing it as’expenditure beyond what the economy needs. Goldman Sachs expects $1.1 trillion worth of stimulus packages to pass through Congress after parliamentary discussions, and JPMorgan expects around $1 trillion to pass stimulus.
Nominee Yellen responded to the criticism of excessive increase in national debt, “I did not announce this stimulus without concerns about the increase in national debt, neither for Biden nor myself,” he said. “At a historically low level, the wisest thing to do is take’big action’. I plan to explain. “The benefits of large-scale stimulus will significantly exceed the cost,” he said. “If no further action is taken, the economy will be endangered and long-term growth potential will be undermined.” In other words, when interest rates and conditions are low, stimulating the economy is more important than when worrying about debt expansion.
The New York Times (NYT) assessed that Nominee Yellen took a markedly different approach to the role of finance minister from his predecessor, Secretary Steven Manusin. NYT predicted that the nominee Yellen would actively regulate financial institutions in line with the demands of the left in the Democratic Party.
Reporter Kim Hyun-seok [email protected]
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