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Treasury Secretary Janet Yellen said on Monday that the stimulus package recently approved by the Senate will spur “a very strong economic recovery” and get the country back to full employment by 2022.
“We expect that the resources in the package will really drive a very strong economic recovery,” Yellen said in an interview on MSNBC.
“I’m anticipating, if all goes well, that our economy will be back to full employment, where we were before the pandemic, by next year,” she added.
The unemployment rate soared from 3.5% in February 2020 to 14.7% in April, when the implementation of mobility restrictions and business closures to contain the spread of the virus had the biggest impact, and currently stands at 6.2%.
Yellen, the first woman to lead the Treasury in the country’s history, distanced herself from ongoing warnings of possible inflationary pressures in the economy given the magnitude of the fiscal stimulus.
“I really don’t think that’s going to happen. We had a 3.5% unemployment rate before the pandemic and there was no sign of rising inflation. It was too low rather than too high,” Yellen said.
The U.S. Senate on Saturday approved President Joe Biden’s proposed bailout plan, a $1.9 trillion injection into the economy to supposedly mitigate the effects of the pandemic, but it includes a lot of spending unrelated to the coronavirus crisis, and is intended to boost the Democrats’ progressive agenda.
The so-called “Bailout Plan” includes new direct payments of $1,400 to taxpayers with incomes of less than $80,000 per year, up from checks of $600 and $1,200 in previous bailouts.
This bailout will be the third approved in the United States since the pandemic began a year ago, following the $900 billion bailout Congress pushed through in December and the $2.2 trillion bailout endorsed in March 2020, which was the largest in the country’s history.
The package has been questioned by analysts and economists who warn about inflation and the destruction of American citizens’ savings that this package will cause.