Treasury Secretary Janet Yellen on Friday called on governments to borrow and spend freely to reverse the economic damage of the pandemic, saying “the time to go big is now.”
Yellen was speaking in a virtual meeting with G7 finance ministers and central bank governors, the first of Yellen’s tenure as Treasury Secretary. Fed chair Jerome Powell was also expected to participate.
“Secretary Yellen also stressed the importance of providing further fiscal support to promote a robust and lasting recovery,” a spokesperson for the Treasury Department said in a statement.
The Biden administration has proposed a $1.9 trillion spending bill that would likely raise the deficit to the highest share of GDP ever, surpassing last year’s enormous debt issuance.
The Treasury noted that Yellen emphasized the commitment of the Biden Administration to “multilateralism,” stating that the United States “places a high priority on deepening our international engagement and strengthening our alliances.”
Yellen also promised “strong support: for efforts to tackle climate change, saying her department’s engagement on this issue would be dramatically different from the Trump administrations.
“We understand the crucial role that the United States must play in the global climate effort,” Yellen said,
Yellen also urged the G7 countries to “work to address the challenges facing low-income countries who are struggling to respond to the pandemic.”