Calling More Fiscal Stimulus
On Tuesday, the United States Treasury Secretary nominee and former chair of the Federal Reserve, Janet Yellen, had her confirmation hearing.
At the hearing, Yellen emphasized the profound threat the pandemic still poses to the U.S. economy. She argued, “Without further action, we risk a longer, more painful recession now — and long-term scarring of the economy later.” Late last year, current chair of the Federal Reserve, Jerome Powell also called for more fiscal support.
When asked what would give the economy the best chance of recovering, Yellen calls for economic relief to small businesses and those adversely affected by the pandemic. The Treasury Secretary nominee also envisions more fiscal support to aid in vaccine distribution, reopening schools, and supporting government workers like firefighters and teachers.
The pandemic has dealt an enormous blow to the economy, and small businesses have especially been hurt. According to Yelp’s Economic Impact Report last year, nearly 100,000 small businesses have permanently closed since the start of the pandemic. Not to mention consistently changing state reopening plans has filled businesses recoveries with uncertainty.
It is essential to consider how this fiscal spending will affect the United States debt, and Yellen insists “right now, with interest rates at historic lows, the smartest thing we can do is act big.” Yellen is banking on short-term economic relief to lessen the long-term economic impacts of the pandemic.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.