Over the weekend, Janet Yellen answered questions concerning the tendency for inflation in America due to the pandemic budget plans of President Joe Biden. She says the President’s spending plan will not give rise to inflation as appropriate measures have been put in place.
President Joe Biden’s Budget Plan
There has been a proposal of about $1.9 trillion by President Joe Biden for the COVID-19 pandemic recovery and stimulus program. The program is to cover expenses such as COVID-19 vaccine production and testing, increase in the minimum wage, increased unemployment benefit, and extra financial support for the state governments and the local governments, among other things.
The money will be raised from tax increments on wealthy American individuals and corporations. Despite the positives of this project, there have been concerns from some democratic lawmakers. They believe that the tax increase will decelerate the growth of the economy and such an influx of money will eventually lead to inflation.
The Measure to Prevent Inflation
In her interview with NBC on Sunday, Janet Yellen describes the proposal of the President as a “historic investment”. She said the spending was purposeful and necessary to make the American economy continuously productive and fair.
The Treasury Secretary also says that the measure taken to avoid inflation is by spreading the budget evenly for eight to ten years. She says further that should inflation still arise, they would address it with the right measures.
She also claims to agree with President Joe Biden’s initiative to raise the project money from increased taxes from corporations.