In Senate testimony on Thursday, Treasury Secretary Janet Yellen tried desperately to give economists credit for President Biden’s tax-and-spend approach, which has caused historic inflation and an unaccountable national debt.
Yellen has been talking out of both sides of her mouth, arguing that inflation is the nation’s number one economic priority, while also supporting Biden’s proposed budget released last week, which would only accelerate price increases.
She began her testimony by saying, “Our banking system is healthy.” However, Americans should not be comforted by these words. Biden’s Treasury and banking regulators failed to spot this predictable crisis that resulted from the Fed’s rapid rate hikes to tackle Biden’s inflation. This smell was just the latest sign of incompetence by the Biden administration.
YELLEN SAYS US BANKING SYSTEM ‘REmains STRONG’ Amid RECENT TROUBLE
Yellen lost her remaining economic credibility in her 2021 congressional testimony when she called inflation “temporary.” Since then, the value of the dollar has fallen by almost 15%. On Tuesday, the Bureau of Labor Statistics reported that the Consumer Price Index rose 6% — three times the Fed’s target rate. Core inflation, excluding food and energy prices, actually rose on a monthly basis.
Treasury Secretary Janet Yellen is a left-wing activist in economist clothing.
However, Yellen does not seem to have learned her lesson. When asked how the Biden administration’s reckless spending has driven up prices, Sen. Ron Johnson said, “I don’t think deficit spending is one of the main causes of inflation.”
In fact, Biden’s budget implosion would fuel the inflationary fire. Biden’s budget includes $2.6 trillion in new spending that would weaken the currency and lead to more dollars chasing the same amount of goods and services.
Yellen claimed that Biden’s budget will lead to “deficit reduction.” In fact, it would increase the deficit from $1.4 trillion in 2022 to $1.6 trillion in 2023 and $1.8 trillion in 2024. The total deficit would increase by $17 trillion over ten years.
GET THE FOX BUSINESS ON THE GO BY CLICKING HERE
She has lent her support to counterproductive Biden programs, such as expanding the child tax credit, which would only exacerbate the labor shortages facing small businesses.
And he ignored how Biden’s budget would hurt the economy through $4.7 trillion in tax hikes, including painful new levies on small businesses and families that would raise the top tax rate to 45 percent.
Biden’s budget would also double the capital gains rate from 20% to 39.6%, penalizing entrepreneurs who have worked a lifetime to grow their small businesses. And it would raise the corporate tax rate from 21% to 28%, hitting more than a million small businesses structured as corporations.
No American Treasury Secretary could support such a major economic transformation of the government.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
Finally, Yellen showed no concern for the fate of community banks, whose depositors are currently flocking to the nation’s big banks. Sen. James Lankford, R-Okla., asked Yellen, “What is your plan to prevent large depositors from moving their money from community banks to large banks?” Helen had no answer.
This is a major blind spot. Community banks are hugely important to small businesses and the overall economy. They hold 15% of the banking industry’s total loans, but 36% of the industry’s small business loans. Unfortunately, they have been disproportionately affected by the flawed Dodd-Frank financial rules, which have been rapidly wound down in recent years. They need support from the Minister of Finance.
Yellen is a left-wing activist in economist clothing. The American public and their elected officials should ignore partisan political pronouncements in favor of their own common sense about how the Democrats’ deficits and tax hikes have affected and will continue to affect the economy, the federal budget condition and value of the dollar.
Alfredo Ortiz is president and CEO of the Job Creators Network and author of “The Real Rebels of Race: How Minority Entrepreneurship Can Overcome America’s Racial and Economic Divides.“