Joe Biden’s Treasury Secretary Janet Yellen admitted on Wednesday that the administration’s massive spending agenda has led to the inflation plaguing the nation.
Yellen’s comments came during an interview with Wall Street Journal editor-in-chief Matt Murray. He pointed out to Yellen that a major criticism of the Biden administration and the Federal Reserve has been the “underestimation” of the damage done over the last year by federal spending that has caused inflation. He cited stimulus spending related to COVID relief as the major inflationary item.
Murray asked Yellen what her take as an economist is on how government spending has been responsible for the inflation now hammering the nation.
Yellen then admitted that inflation is a simple matter of supply and demand. She said that the spending funded by the American Rescue Demand “did feed demand.” Even so, she claimed that the spending was “justified and appropriate” because of risks faced by the economy.
In casting the blame on the Trump administration as is commonly done, she said that Biden inherited an economy where “forecasters” were predicting “very high unemployment for a very long time.”
Yellen said that when Biden assumed office, the administration saw “cars lined up for miles” to get to food banks and Americans not being able to get enough to eat or feed their children. She said that forecasts of food shortages “were really quite dire.”
In describing a food crisis in hindsight that was not part of the Biden narrative in 2021, she said that the high inflation America now faces was an unintended result. She said that the administration wanted to “avoid another recession” and promote full employment. Yellen said that effort has been a success, despite the fact that the U.S. GDP contracted by 1.4 percent in the first quarter of this year.
Yellen went on to say that she believes the American economy is strong even when considering the economic impact of the sanctions imposed on Russia after its invasion of Ukraine and the supply disruptions that are likely to occur.
Although Yellen and the White House continue to lay the blame elsewhere for high inflation, polling indicates most Americans say the administration is primarily responsible.