Outgoing Treasury Secretary Janet Yellen expressed regret over the U.S. fiscal situation this week, citing concerns about sustainability as the nation’s debt reached an all-time high. Critics, however, argue that her policies directly fueled the $15.2 trillion debt increase during her tenure.
Yellen, who also served as Federal Reserve Chair, made the remarks during a Wall Street Journal event and noted her conversation with Scott Bessent, President Donald Trump’s nominee for Treasury Secretary. She highlighted the department’s strengths but acknowledged the difficulty of narrowing the deficit amid rising interest rates.
Under Yellen’s watch, U.S. debt surged, representing 42% of the total debt in U.S. history. Critics have long argued that her policies—particularly maintaining low interest rates—enabled unchecked government spending. This approach, they say, prioritized short-term stability over addressing long-term economic risks.
The fiscal crisis has been compounded by the Biden administration’s spending policies, which included historic expenditures on domestic programs and international aid. Government interest payments now rank as one of the largest federal outlays, surpassed only by Social Security.
In its final months, the administration saw record-breaking deficits as revenues remained flat. Economists warn that rolling over existing debt at higher interest rates could lead to a significant financial crisis. Yellen’s apology, critics argue, does little to address the scale of the problem created during her tenure.
As Bessent prepares to take over, he inherits a challenging fiscal environment shaped by years of aggressive borrowing. Observers question whether Yellen’s successor can implement meaningful reforms or if the nation will continue down an unsustainable path.
