Treasury Secretary Janet Yellen, who famously claimed during the summer of 2022 that inflation was transitory as she pushed for even more federal spending- including the later Joe-Manchin-defeated $6 trillion boondoggle known as Build Back Better- appeared more in touch with reality at the Wall Street Journal's CEO Summit on Tuesday.
As reported by The Hill, Yellen said: "Well, I am concerned about fiscal sustainability, and I am sorry that we haven't made more progress. I believe that the deficit needs to be brought down, especially now that we're in an environment of higher interest rates."
Welcome to the world of reality, Dr. Yellen. We have been warning on these pages about each of these issues for years. With just about five weeks left before you finally end your government career, we find your realization to be remarkably unprofessional and incompetent.
Under your stewardship, inflation and interest rates skyrocketed to the highest in decades, and federal deficits ballooned. The federal debt became so large that servicing it as a budget line item cost more than $1 trillion, larger than the DOD budget. For the over $200 billion committed to foreign wars, something that you have tirelessly championed, Ukraine is losing.
You stood with President Biden on March 9, 2023, when he fired the first salvo in releasing your budget for the balance of 2023. At the time, America's debt stood at a whopping $31 trillion. You advocated spending $530 billion more than Fiscal 2022 to bring the budget to $6.8 trillion. Your defense spending line item was the biggest in history, at $886 billion, compared to $767 billion in 2022. If Congress had blessed Biden's budget request as he proposed it, the federal deficit would have reached nearly $2 trillion. Yes, an annual deficit of $2 trillion.
As was typical with the Biden White House, the official statement was full of lies, and the media lapped it all up without questioning the assertions. The narrative was that Biden was reducing the deficit when it was actually increasing at an alarming rate. The claim that costs were being lowered for families was false because Bidenflation, running at 20% until recently, has continued to stretch thin American household budgets.
For the ten-year period of 2023-2032, the Congressional Budget Office (CBO) estimated that the Biden budget would result in an additional $18.8 trillion in deficits, bringing America to nearly $50 trillion in total debt by 2032. Then-Speaker McCarthy's budget lowered this by about $4.6 trillion, but would still leave America with $45 trillion in debt in 2032.
With the Senate in Democratic control, even this watered-down GOP budget had little chance of passing Congress. Even if it passed, the legislation risked a presidential veto. However, McCarthy had one tool to use as a lever to get free-spending Democrats (led by you) to negotiate. America's rapid borrowing had again brought it close to the debt ceiling, and unless Congress raised it, the Treasury would run out of money to pay the government's bills. As Treasury Secretary, you said that this day would occur on June 5, 2023.
And what did you do? You worked behind the scenes with President Biden and McCarthy, and after weeks of drama, you stood with them when the two so-called leaders agreed on a 99-page budget outline, which was supposed to be a compromise. In the compromise, you engineered a provision allowing Congress to unconditionally raise the debt ceiling to whatever amount the Treasury needs and not address the issue until January 2025, after the 2024 general election. In fewer than 21 months, you have run up America's debt from $31 trillion to $36.2 trillion.
Meanwhile, Americans continue to pay more for everything.
Consider YouTube TV from Google, which reported a net income of $74 billion in 2023. The service first debuted in 2017 at $35 a month. After the latest 14 percent hike, the service will cost $82.99 a month.
It is not that the price of everything continues to rise - it is that Americans are getting less for what they pay. Sam's Club, from Walmart, offered "a Plus" service for customers of the discount club. For spending $99/year, customers would get free delivery of various products to their homes. Starting in 2024, Sam's Club raised the price to $110/year but imposed a minimum $50 order total before items could be delivered for free.
Frequent flier programs at the big airlines are also undergoing significant changes, and each change puts the paying traveler at a disadvantage. These programs, which initially focused on distance traveled as long as someone bought a ticket, have become more complex. Today, most programs require you to spend money with the airline rather than fly miles. Many basic economy or discounted tickets no longer earn frequent flier points. The price for claiming a reward flight keeps going up.
Selecting a window or aisle seat, which used to be complimentary for decades, now costs extra. On December 5, at the Senate Permanent Subcommittee on Investigations, Sen. Richard Blumenthal (D-CT) said, "Our investigation found that in 2023 alone, American, Delta, United, Frontier, and Spirit collected more than $3 billion in seat fees—only seat fees. That's not airfare; that's just fees for booking a specific seat in advance or selecting a slightly better seat."
So, Dr. Yellen, not only are you accountable for America's dire financial situation today and the associated higher costs to consumers, but you are also leaving the Trump administration with its hands tied even as foreign wars rage.
Sorry. Your Mea Culpa at this late stage of the game won't cut it.
