Janet Yellen admits government is failing on deficit progress

In recent comments, Janet Yellen, the outgoing U.S. Treasury Secretary, expressed her concerns regarding fiscal sustainability and the growing national deficit. Speaking at the Wall Street Journal's CEO Council Summit, she acknowledged that the deficit remains a significant issue as the Biden administration comes to an end. Yellen, who will be leaving her post next month, reiterated the importance of addressing the deficit, particularly given the current environment of rising interest rates. This statement comes at a time when the national debt has surpassed $36 trillion, raising alarms over the country’s financial health. During her tenure in office, Yellen has witnessed the national debt increase substantially, driven by various factors, including pandemic relief measures and recent economic policies instituted by the Biden administration. While she highlighted some economic achievements -- such as a robust labor market and solid economic growth -- her sentiments reflect a recognition of the challenges that lie ahead for federal finances. Yellen's remarks underscore a critical point: while there have been strides in certain areas of the economy, the persistent budget deficit poses risks to fiscal stability. This acknowledgment is crucial as the incoming administration will need to grapple with these ongoing financial issues. Furthermore, such concerns are compounded by the increased costs associated with servicing the national debt in a high-interest-rate environment, further emphasizing the urgency needed in implementing effective fiscal policies. In her previous role as the chair of the Federal Reserve Board from 2014 to 2018, Yellen had to navigate complex economic landscapes, and her recent comments signal a continued awareness of the broader financial picture. As she prepares to step down, the Treasury Department faces the critical task of addressing these pressing deficit challenges to ensure long-term economic sustainability.