WASHINGTON – Treasury Secretary Janet Yellen tried 15 months ago to shut down some economists’ concerns that President Joe Biden’s $1.9 trillion economic relief package could fuel rising prices.
“Is there a risk of inflation?” Yellen said on ABC’s “This Week” in March 2021, three days after Biden signed the American Rescue Plan into law. “I think there’s a small risk. And I think it’s manageable.”
Yellen’s mea culpa was the most direct admission from the Biden administration that it failed to grasp the scale of inflation that would come as the country recovered from the coronavirus pandemic.
Even as the cost of gas, food and other consumer goods soared, the administration repeatedly assured Americans the price increases would be temporary.
Economists who sounded the alarm about rising inflation said the warning signs were there all along.
Steven Rattner, economic adviser for President Barack Obama, said much of the blame for inflation falls on Biden’s American Rescue Plan, which gave many Americans $1,400 checks, unleashed a host of social programs and pumped $350 billion into local and state governments.