Washington (AFP)
Faced with the economic crisis caused by the Covid-19 pandemic, Janet Yellen, Joe Biden's future treasury secretary, calls for not watching the expense, postponing the management of the exponential deficit.
We must "think big", pleaded Tuesday Ms. Yellen, 74, during her grand oral before US senators.
"The pandemic has devastated" the American economy, she recalls.
"The damage is enormous (...), our response must be too".
Joe Biden, who will take office on Wednesday, presented a gigantic emergency aid plan for the economy of 1.9 trillion dollars last week, just under March's historic 2.2 trillion plan. 2020.
"There is a consensus now: without further action, we risk a longer and harder recession and long-term scars on the economy," said Janet Yellen.
The former president of the Central Bank (Fed) was heard by the senators to confirm her in the key position of secretary of the Treasury, equivalent to the French Minister of the Economy and Finance.
- Republicans' opposition -
The role of this renowned economist, specialist in unemployment, committed to climate change and favorable to budget support, will be to enable the world's largest economy to recover from the current economic crisis.
Thousands of small businesses have had to close due to restrictions imposed to stem the spread of the pandemic, while millions of people have lost their jobs.
"I will focus from day one on helping American workers and small businesses and putting into practice as quickly and effectively as possible the bailout that was recently adopted," said Ms. Yellen.
She intends "in a second step to work on the second package of aid that I deem necessary to get through these dark moments", she continued, with reference to the plan to support the economy of 900 billion dollars adopted at the end of December by Congress to prevent millions of unemployed from ending up without benefits and resuming rental evictions and foreclosures.
Without agreement from Congress, including the Senate where Democrats hold a narrow majority, Mr. Biden's plan, which includes aid for households, businesses and local communities, is doomed to failure.
Republicans, usually reluctant to intervene too broadly by the federal state, should be all the more reluctant as they are now in opposition.
The Trump administration had, however, for four years, incurred heavy expenses.
The titanic plan of March 2020 was even adopted in record time.
- 50-year treasury bills? -
To convince to vote this new plan, Janet Yellen notes that the interest rates close to zero make it possible to borrow money without the cost of the interests further increasing the debt of the United States.
"In the long term, I think the benefits will be much greater than the financial costs of this plan," said Ms. Yellen.
The budget deficit in the United States continues to climb, under the weight of spending related to Covid-19.
It reached in 2020 (from October 2019 to September 2020) 3.132 billion dollars, a historic level, more than twice as high as the previous record.
The debt was $ 26.9 trillion at the end of September.
Asked about the possibility for the United States to issue 50-year Treasury bills, Ms. Yellen said she was open to the idea.
"There is an advantage in financing debt, especially when interest rates are very low, by issuing long-term bonds," she insisted.
Ms. Yellen further underscored the need to rebuild an economy that is more globally competitive and allows more Americans to enjoy prosperity.
"It's important for America to invest: invest in our infrastructure, invest in our workers, invest in research and development - the things that make our economy grow quickly and make it competitive," she said. added.
Regarding trade policy, Janet Yellen unsurprisingly announced that, vis-à-vis China, the United States would follow in the wake of the Trump administration by deploying a large arsenal of tools to counter Beijing's "abusive", "unjust" and "illegal" practices.
It has approached Europe on the delicate issue of the taxation of digital giants.
According to observers, Ms. Yellen should pass her grand oral.
The Senate could vote as soon as Thursday on his nomination, said Democratic Senator Ron Wyden at the end of the hearing, which lasted nearly three hours.
© 2021 AFP