Janet Yellen, outgoing Treasury Secretary, has admitted regret over the nation’s fiscal state, drawing criticism after presiding over a $15.2 trillion debt increase during her time in office. Yellen, speaking at a Wall Street Journal event, acknowledged concerns about fiscal sustainability while outlining challenges her successor will face.
Before Thanksgiving, Yellen spoke with Scott Bessent, President Donald Trump’s nominee to replace her, about the breadth of the role. She emphasized the department’s resilience but admitted disappointment over failing to reduce the deficit in a time of rising interest rates.
The U.S. debt ballooned during Yellen’s tenure, fueled by historically low interest rates that critics say encouraged reckless spending. The Biden administration’s policies also played a role, with trillions directed toward domestic programs and international aid, including substantial funding for Ukraine.
Interest payments on the debt now rank as the second-largest government expense at $1.2 trillion annually, trailing only Social Security. Economists warn that these rising costs could create significant challenges for the next administration, especially as deficits continue to grow.
Despite her regrets, Yellen has been accused of exacerbating the crisis. Observers argue that her policies, both as Fed Chair and Treasury Secretary, prioritized short-term stability over addressing the long-term fiscal trajectory.
As Scott Bessent steps into his new role, he inherits a dire economic landscape. Whether he can implement meaningful reforms remains to be seen, but the challenges left behind by Yellen loom large.
