How The Biden Economy Might Change Under Janet Yellen

Published on January 28, 2021

On Monday, Vice President Kamala Harris swore in Janet Yellen as the new Secretary of the Treasury. She is the first woman to ever hold that role, and she has no easy task ahead of her. The economy is currently struggling under the weight of a global pandemic. Unemployment is high, and Americans are struggling. Here’s how the Biden economy might change under Yellen.

In 2014, Yellen became the first woman to ever run the Federal Reserve. During her time at the Fed, she gained a reputation for being a moderate centrist who can bring together opposing factions, something that will likely serve her well in a divided, fractious government. A Biden economy, with Yellen at the helm, will likely focus on gaining bipartisan support for economic policies.

She also has a reputation for fighting unemployment. We should expect someone who works tirelessly to rectify this problem for American families. Yellen is what’s known in finance circles as a “dove”, meaning she is more concerned about unemployment than inflation.

We should also expect to see Yellen working to implement some of Biden’s bold economic reform plans. These plans include upgrades to the nation’s infrastructure, a clean energy economy, providing free community college, and raising taxes on corporations and individuals making more than $400,000 a year. Without Republican support, it may be difficult to achieve all of these goals, but undoubtedly Yellen will try, and we may see compromised versions of some of these plans.

In her confirmation hearing, Yellen urged quick action on the stimulus package to avoid a longer, more painful recession. This is a campaign promise from the Biden administration, and we should expect that to take immediate priority.

In the spirit of the stimulus package, Yellen has shown she is willing to spend to stimulate the economy to avoid a devastating financial toll on household.

“Even under current conditions, I think we can afford to increase federal spending or cut taxes to stimulate the economy if there’s a downturn,” Yellen said in January at the American Economic Association annual meeting.

This means that under Yellen, the Biden economy may include an increase in the national deficit. This increase will be in the name of helping average Americans stay afloat.

Olivia Smith is a Staff Writer at Grit Daily. Based in San Francisco, she covers events, entertainment, fashion, and technology. She also serves as a Voices contributor at PopSugar.

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