“My predecessor indicated that there is a chance that this will cause inflation to rise. And this is also a risk that we must consider, ”said Yellen of Summers. “I spent many years studying inflation and worrying about it. And I can say that we have the tools to deal with this risk if it materializes, but we face an enormous economic challenge here and enormous suffering in the country. “
Yellen said Biden’s $ 1.9 trillion American Rescue Plan was “ready for work” to address the myriad challenges posed by the country’s pandemic.
She cited a recent analysis by the Congressional Budget Office indicating that it may take until 2025 for the unemployment rate to reach pre-pandemic levels without additional support.
“We would have a long and slow recovery like the one we had after the financial crisis, but this package will really accelerate the recovery and analysis from Moody’s and economists from the Brookings Institution shows that we will very clearly get people back to work much earlier with this package ”Said Yellen.
She added: “There is absolutely no reason for us to experience a long, slow recovery.”
Shortly after she spoke, Senator Pat Toomey (R-Pa.) Sided with Summers.
“What you hear are these generalizations about, well, people are suffering, so let’s spend another $ 2 trillion,” he told host Jake Tapper. “It is not the right solution. Larry Summers is a Keynesian liberal Democrat, in favor of large government spending, and he said that this is too much.”