(MT Newswires) -- Janet Yellen, the US Treasury Secretary, points out that despite the increase in the ratio of the national debt to GDP, the costs associated with this debt remain low. Although the $34 trillion public debt may seem worrying, she insists on the need to focus on real interest costs, which remain manageable.
With interest rates likely to remain high and an ageing population, Yellen reiterated the importance of reducing deficits to keep them at reasonable levels. She called for Congress and the administration to work together to achieve this. In her view, investing in the economy is crucial, and borrowing to finance promising projects that can boost growth and increase tax revenues is justified.
The Secretary cites the President's efforts to reduce the deficit, including legislation to lower the deficit by $1 trillion over the next ten years, and a budget for 2024 that calls for a further $2.5 trillion reduction.
Finally, Yellen believes that the IRS, the body responsible for collecting taxes, is underfunded. This lack of resources hampers the agency's ability to collect all the taxes owed. The tax gap, i.e. the difference between the sums owed and those actually collected, is estimated at 7 trillion dollars over the next decade.
