Faced with the economic crisis caused by the Covid-19 pandemic, Janet Yellen, Joe Biden's future treasury secretary, calls for not watching the expense, postponing the management of the exponential deficit.
Read also: United States: Janet Yellen will tell the Senate that now is not the time to worry about the deficit
We must
"
think
big"
, pleaded Tuesday Janet Yellen, 74, during her big oral before American senators.
"The pandemic has devastated"
the American economy, she recalls.
"The damage is enormous (...), our response must be too"
.
Joe Biden, who will take office on Wednesday, presented a gigantic emergency aid plan for the economy of 1.9 trillion dollars last week, just under March's historic 2.2 trillion plan. 2020.
"There is a consensus now: without further action, we risk a longer and harder recession and long-term scars on the economy."
, explained Janet Yellen.
The former president of the Central Bank (Fed) is heard by the senators to confirm her in the key position of secretary of the Treasury, equivalent to the French Minister of the Economy and Finance.
Republicans' opposition
The role of this renowned economist, specialist in unemployment, committed to climate change and favorable to budget support, will be to enable the world's largest economy to recover from the current economic crisis.
Thousands of small businesses have had to close due to restrictions imposed to stem the spread of the pandemic, while millions of people have lost their jobs.
"I will focus from day one on helping American workers and small businesses and putting into practice as quickly and effectively as possible the bailout that was adopted recently,"
said Janet Yellen.
She intends
"in a second step to work on the second package of aid that I consider necessary to get through these dark moments",
she continued, with reference to the plan to support the economy of 900 billion dollars adopted at the end of December by Congress to prevent millions of unemployed from ending up without benefits and resuming rental evictions and foreclosures.
Without the agreement of Congress, and in particular of the Senate where the Democrats hold a narrow majority, Joe Biden's plan, which includes aid for households, businesses, local communities, is doomed to failure.
Republicans, usually reluctant to intervene too broadly by the federal state, should be all the more reluctant as they are now in opposition.
The Trump administration had, however, for four years, incurred heavy expenses.
The titanic plan of March 2020 was even adopted in record time.
Towards 50-year treasury bills
To convince to vote this new plan, Janet Yellen notes that the interest rates close to zero make it possible to borrow money without the cost of the interests further increasing the debt of the United States.
“In the long term, I think the benefits will be much greater than the financial costs of this plan,”
Janet Yellen emphasized.
The budget deficit in the United States continues to climb, under the weight of spending related to Covid-19.
It reached in 2020 (from October 2019 to September 2020) 3.132 billion dollars, a historic level, more than twice as high as the previous record.
The debt was $ 26.9 trillion at the end of September.
Asked about the possibility for the United States to issue 50-year treasury bills, Janet Yellen said she was open to this idea and that she would see if the markets were interested.
“There is an advantage in financing debt, especially when interest rates are very low, by issuing long-term bonds
,” she insisted.
She further emphasized the need to rebuild an economy that is more globally competitive and allows more Americans to enjoy prosperity.
"It's important for America to invest: investing in our infrastructure, investing in our workers, investing in research and development - the things that make our economy grow quickly and make it competitive,"
she said. added.
Regarding trade policy, Janet Yellen unsurprisingly announced that, vis-à-vis China, the United States would follow in the wake of the Trump administration by deploying a large arsenal of tools to counter
Beijing's
“abusive”,
“unfair”
and
“illegal” practices
.
It has approached Europe on the delicate issue of the taxation of digital giants.
According to observers, Ms. Yellen should pass her grand oral.
