Yellen Says U.S. Economy to Weather Strike, Govt. Shutdown, Student Loan Risks

September 22, 2023: On Wednesday, U.S. Treasury Secretary Janet Yellen said that the U.S. economy is strong enough to weather several near-term risks, including a strike by United Auto Workers (UAW) members, a potential government shutdown, and the resumption of student loan payments.

Yellen told reporters that the economy is “on a good track” and that she sees evidence of “continued strong growth” in the labor market and consumer spending.

“The economy is strong enough to withstand these shocks,” Yellen said. “But we need to be prepared for them. We need to make sure that we have a plan to mitigate these shocks’ impact on workers and families.”

The UAW strike at General Motors (GM) plants has already caused disruptions to production and could lead to shortages of GM vehicles if it continues. A government shutdown would also hurt the economy, leading to furloughs and layoffs of government employees.

The resumption of student loan payments could also hurt the economy, as it could lead to a decrease in consumer spending.

Yellen said the Biden administration is working with both sides in the UAW strike to resolve it. The administration is also preparing for the possibility of a government shutdown and the resumption of student loan payments.

Implications of Yellen’s Remarks

Yellen’s remarks are reassuring for the U.S. economy. They suggest that the economy is strong enough to withstand several near-term risks, including a strike, a government shutdown, and the resumption of student loan payments.

However, Yellen’s remarks also serve as a reminder that the economy is not immune to shocks. The UAW strike, a government shutdown, and the resumption of student loan payments could all harm the economy.

The Biden administration and Congress need to work together to mitigate the impact of these shocks on workers and families. The administration and Congress should also work together to address the underlying economic risks, such as inflation and supply chain disruptions.

What Can Be Done to Mitigate the Impact of Economic Shocks?

The Biden administration and Congress can do several things to mitigate the impact of economic shocks on workers and families.

The administration can provide financial assistance to workers affected by economic shocks, such as strikes and government shutdowns. The administration can also provide training and job placement assistance to help workers find new jobs.

Congress can pass legislation to provide financial assistance to workers and families affected by economic shocks. Congress can also pass legislation to support the economy, such as infrastructure spending and tax cuts.

By working together, the Biden administration and Congress can help mitigate economic shocks’ impact on workers and families. This will help to ensure that the U.S. economy continues to grow and that all Americans benefit from economic growth.

Conclusion

The U.S. economy faces several near-term risks, including a strike by UAW members, a potential government shutdown, and the resumption of student loan payments. However, U.S. Treasury Secretary Janet Yellen says the economy is strong enough to weather these shocks.

The Biden administration and Congress can work together to mitigate the impact of these shocks on workers and families. The administration and Congress can also work together to address the underlying economic risks, such as inflation and supply chain disruptions.