Yellen rebrands Biden agenda as ‘modern supply-side economics’

Yellen rebrands Biden agenda as ‘modern supply-side economics’

Reuters / Washington

US Treasury Secretary Janet Yellen on Friday rebranded the Biden administration’s economic agenda as “modern supply-side economics,” using a Reagan-era phrase favoured by Republicans to assert that Democrats’ spending plans will boost the US economy’s productive capacity.

Yellen said in a speech to the World Economic Forum that rather than tax cuts and deregulation, her modernised version seeks to increase labour supply and improve infrastructure, education and research to boost potential US growth and ease inflationary pressures.

“Our new approach is far more promising than the old supply- side economics, which I see as having been a failed strategy for increasing growth,” Yellen said. “Significant tax cuts on capital have not achieved their promised gains.

And deregulation has a similarly poor track record in general and with respect to environmental policies — especially so with respect to curbing CO2 emissions.”

Yellen did not announce any policy shifts as she introduced the concept, which suggests it may be a new tactic to persuade Americans and moderate Democrats in Congress to support the “Build Back Better” social spending and climate investment plan, which stalled in December.

The new nomenclature emphasises the administration’s efforts to expand the US workforce — a sentiment echoed