U.S. Economy ‘Has Failed To Live Up To The Nation’s Promise Of Equal Opportunity For All’, Says U.S. Treasury Secretary Janet Yellen

Janet Yellen

A Market Watch report published on Oct. 5, 2022 (https://www.marketwatch.com/story/treasury-secretary-janet-yellen-says-u-s-economy-has-failed-to-live-up-to-the-nations-promise-of-equal-opportunity-for-all-11664975349?siteid=yhoof2) said:

The Biden administration announced a slew of new efforts to further racial economic equity during the annual Freedman’s Bank Forum in Washington, D.C. Tuesday.

The forum, acknowledging the history of the former Freedman’s Savings Bank that maintained accounts for formerly enslaved people before its ultimate collapse in 1874, served as an opportunity for government and business leaders to address a widening racial-wealth gap. And Treasury Secretary Janet Yellen, who described racial equity as being at the forefront of the administration’s agenda, said that in the years since, “our economy has failed to live up to the nation’s promise of equal opportunity for all.”

“We’re trying to invest in communities that have often been ignored or overlooked,” Yellen said. “Our economic blueprint supports our strong belief that tapping the potential of all communities is not just the morally right thing to do, it’s a promising strategy for inclusive economic growth as well.”

U.S. Debt Surpasses $31 Trillion

The U.S. national debt has officially exceeded $31 trillion for the first time in history, the Treasury Department confirmed on Tuesday.

The U.S. government owed a total of 31 trillion, 123 billion, 887 million, 781 thousand, 401 dollars and 34 cents as of October 3, according to publicly released Treasury figures.

At the moment of U.S. President Joe Biden’s inauguration, in January 2021, the debt stood at $27,75 trillion, according to the Congressional Research Service.

“It was $21 trillion just five years ago,” Congressman Chip Roy, a Texas Republican, lamented on Twitter after the news broke.

The national debt stood at $19.94 trillion when President Donald Trump took office in 2017, and exploded in the past few years as the Federal Reserve printed money to deal with the Covid-19 pandemic.

Most of the debt is held by private individuals, to the tune of $24 trillion, while debts to foreign governments amount to almost $7 trillion. Much of the world indirectly subsidizes the US dollar as the global reserve currency.

Meanwhile, the featured announcement on Treasury’s website on Tuesday concerned the establishment of a 25-member Advisory Committee on Racial Equity, which is supposed to “provide advice and recommendations to Secretary Yellen and Deputy Secretary Wally Adeyemo on efforts to advance racial equity in the economy and address acute disparities for communities of color.”

An AP report said:

The U.S.’s gross national debt has surpassed $31 trillion, according to a U.S. Treasury report released Tuesday that logs America’s daily finances.

Edging closer to the statutory ceiling of roughly $31.4 trillion — an artificial cap Congress placed on the U.S. government’s ability to borrow — the debt numbers hit an already tenuous economy facing high inflation, rising interest rates and a strong U.S. dollar.

And while President Joe Biden has touted his administration’s deficit reduction efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to tame 40-year high price increases caused by a variety of economic factors, economists say the latest debt numbers are a cause for concern.

Owen Zidar, a Princeton economist, said rising interest rates will exacerbate the nation’s growing debt issues and make the debt itself more costly. The Federal Reserve has raised rates several times this year in an effort to combat inflation.

Zidar said the debt “should encourage us to consider some tax policies that almost passed through the legislative process but didn’t get enough support,” like imposing higher taxes on the wealthy and closing the carried interest loophole, which allows money managers to treat their income as capital gains.

“I think the point here is if you weren’t worried before about the debt before, you should be — and if you were worried before, you should be even more worried,” Zidar said.

The Congressional Budget Office earlier this year released a report on America’s debt load, warning in its 30-year outlook that, if unaddressed, the debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy.

In its August Mid-Session Review, the administration forecasted that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending, and an economy that has recovered all the jobs lost during the multi-year pandemic.

In full, this year’s deficit will decline by $1.7 trillion, representing the single largest decline in the federal deficit in American history, the Office of Management and Budget said in August.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in an emailed statement Tuesday, “This is a new record no one should be proud of.”

“In the past 18 months, we have witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions,” MacGuineas said. “We are addicted to debt.”

A representative from the Treasury Department was not immediately available for comment.

Sung Won Sohn, an economics professor at Loyola Marymount University, said “it took this nation 200 years to pile up its first trillion dollars in national debt, and since the pandemic we have been adding at the rate of 1 trillion nearly every quarter.”

Predicting high inflation for the “foreseeable future,” he said, “when you increase government spending and money supply, you will pay the price later.”

US Covid Recovery In ‘Jeopardy’ Unless Poorer Countries Helped, Warns Group

Another media report said:

U.S. recovery from the Covid pandemic is in “jeopardy” unless the Biden administration supports making treatment and testing for the disease more readily available to low-income countries, a powerful congressional group has warned Joe Biden.

In a letter to Joe Biden led by Congressman Earl Blumenauer, chairman of the subcommittee on trade, the group urged the president to extend a June World Trade Organisation (WTO) agreement aimed at easing exports of generic vaccines to treatments and therapeutics.

The letter comes ahead of what is expected to be a contentious meeting of the WTO council for trade-related aspects of intellectual property rights that starts Thursday where the proposals will be discussed.

As more contagious variants of the disease emerge it is “critically important” that the US backs the agreement to ease access to therapeutics and treatments for poorer nations, the group writes.

The proposals are being championed by South Africa and India but face stiff opposition from the pharmaceutical industry and Switzerland and the UK.

In June the WTO reached a limited agreement to facilitate exports of generic Covid vaccines made under compulsory licenses – a license issued by a government to a third party to produce a patented medicine when the patent owner has refused a voluntary license. The WTO proposed extending the agreement to treatment and testing within six months.

Critics of the original deal argued it was too little, too late and said a broad waiver for intellectual property rights on Covid vaccines and treatments was needed to stem the deadly pandemic, which has now infected more than 619 million people worldwide and caused more than 6.5 million deaths, according to John Hopkins.

Max Lawson, co-chair of the People’s Vaccine Alliance and head of inequality policy at Oxfam, called it “a technocratic fudge aimed at saving reputations, not lives”.

But some were hopeful that the US would support an extension to treatments and testing, seen as a high priority as the coronavirus continues to ravage countries where vaccination rates are still low. Just 19% of people in low-income countries are vaccinated compared to 75% in high-income countries, according to the Multilateral Leaders Taskforce on Covid-19.

“It is critically important that the United States announce support for the extension and join with our allies South Africa and India to forcefully advocate to extend the decision to diagnostics and therapeutics,” the congressional group told Biden.

“Emerging Covid-19 variants are more contagious than ever and are mutating quickly. Extending the decision to therapeutics and thus making them more available will reduce rates of serious illness, hospitalization, and death, which is especially important in low-income countries where only a small percentage of the population has been vaccinated. Likewise, more widely available diagnostics will slow the spread of new variants by alerting individuals and public health officials of outbreaks so countermeasures can be employed, and treatments can be provided within the key window.”

Industry groups have opposed any relaxation of intellectual property (IP) rights on therapeutics and testing, arguing it will disincentivize the industry and weaken IP protections overall.

The US Chamber of Commerce has been highly critical of the WTO’s original decision, calling it “a solution in search of a problem” and arguing that intellectual property rights “helped deliver Covid-19 vaccines in record time, and today the world is awash in vaccine doses”.

In a letter to the Biden administration, the US Chamber of Commerce said it also has “serious concerns” regarding any extension of the agreement, arguing it would further undermine intellectual property (IP) rights around the world.

“The proposal for an expanded waiver now under consideration by WTO members further threatens US leadership in biotechnology and other key sectors, including digital, green, and agricultural technology, by reinforcing a precedent for the ready expropriation of IP,” it wrote.

Lori Wallach, director of Rethink Trade at the American Economic Liberties Project, said: “Big pharma killed the waiver of intellectual property monopolies in the first instance and are now greedily seeking to stop the modest WTO agreement to help export generic treatment and test made in compliance with WTO rules in a way that could devastate people’s lives while increasing big pharma’s profits.”


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