Treasury Secretary Janet Yellen on Thursday argued in favor of $1.9 trillion in coronavirus stimulus.
Although the U.S. economy is seeing vast improvement as coronavirus restrictions are being scaled back, Yellen said on CNBC’s “Closing Bell” that President Joe Biden administration’s proposed $1.9 trillion relief package is necessary because the economy remains in a “deep hole.”
“One question, I think, that’s still out there, is whether we need $1.9 trillion of stimulus,” host Sara Eisen opened with Yellen, noting that many numbers are back to “pre-pandemic levels, if not higher.”
She then asked, “Is that an economy that screams $2 trillion needed in stimulus?”
“Well, I think it does,” Yellen replied. “We have an unemployment rate that, if properly measured in some sense, is really close to 10 percent in addition to over 9 million people unemployed, we have 4 million who dropped out of the labor force, another 2 million who have seen reduced hours. So, we are digging out of a deep hole. Last year was the worst year for economic growth since World War II.”
“The Congressional Budget Office projection recently showed it would take until 2024 in their baseline case to get back to full employment without a package like this,” she continued. “So, we think it’s very important to have a big package that addresses the pain this has caused 15 million Americans behind on their rent, 24 million adults and 12 million children who don’t have enough to eat — small businesses failing — you know, I think the price of doing too little is much higher than the price of doing something big. We think that the benefits will far outweigh the costs in the longer run.”
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