Treasury Secretary Janet Yellen said the US can return to full employment in 2022 if it enacts a robust enough coronavirus stimulus package, but otherwise risks a much slower rebound in jobs and the economy.
She also said that American workers who earn $60,000 per year should receive stimulus cheques as part of the White House's proposed $1.9 trillion coronavirus relief package.
“The exact details of how it should be targeted are to be determined, but struggling middle class families need help,” Yellen said. Yellen said the administration was considering the risk the stimulus plan could cause inflation, but said: We have good tools to deal with that risk if it materialises. Yellen and other administration officials have warned repeatedly that the danger to the economy would be going too small with stimulus efforts, not too large.
“We need a big package, and we need to get this done quickly,” Yellen said Sunday on CNN’s “State of the Union.” Without adequate support, it could take until 2025 for the US labor market to recover, Yellen said.
There’s “no reason why we should suffer a long, slow recovery,” she said.
Separately, on CBS’s “Face the Nation,” Yellen said the job market is “in a deep hole.”
While President Joe Biden’s $1.9 trillion stimulus plan is not specifically aimed at job creation, “the spending it will generate will create demand for workers,” she said.
Yellen acknowledged that some have warned of inflation risks from Biden’s plan, in which is moving ahead in Congress without support from Republicans.
But the worries about inflation voiced recently by former Treasury Secretary Larry Summers were small compared to the “scarring” of economy particularly minorities, low-wage earners and woman, by not spending enough now on economic stimulus.
“That’s a risk that we have to consider. I’ve spent many years studying inflation,” the former Federal Reserve chair said on CNN. “I can tell you we have the tools to deal with that risk” if it happens.
“As Treasury secretary I have to worry about all of the risks to the economy,” Yellen said.