Janet Yellen, outgoing Treasury Secretary, has sparked backlash after acknowledging concerns over the U.S. debt crisis during her tenure. Speaking at a Wall Street Journal event, Yellen admitted to falling short in efforts to manage the deficit, despite overseeing the largest debt surge in U.S. history.
Yellen, who also served as Federal Reserve Chair, revealed she had spoken with Scott Bessent, President Donald Trump’s pick to succeed her, before Thanksgiving. She discussed the role’s demands and highlighted the Treasury Department’s strengths but expressed regret about the nation’s fiscal challenges.
Under her leadership, U.S. debt rose by $15.2 trillion, accounting for 42% of the total debt ever issued. Critics argue that her policies, including maintaining low interest rates for extended periods, enabled unsustainable government spending that has now come under scrutiny.
The Biden administration’s spending spree, which included significant aid to Ukraine and expanded domestic programs, contributed to this crisis. Interest expenses have climbed to $1.2 trillion annually, overtaking health and defense spending. Analysts warn that these costs could soon surpass Social Security, making them the largest federal expenditure.
The administration’s final months have seen record-breaking deficits, as tax revenues have remained flat. Yellen’s acknowledgment of these challenges has done little to assuage critics, who view her policies as a key factor in the country’s current fiscal instability.
As Yellen prepares to exit, Scott Bessent faces the daunting task of addressing a growing fiscal crisis. Many observers argue that significant reforms are necessary to avoid further economic fallout.
