Americans may be confronting the hottest inflation numbers since 1981, but Treasury Secretary Janet Yellen is standing behind her claim that President Joe Biden’s nearly $2 trillion American Rescue Plan indeed helped the country avoid a massive economic downturn that “could match the Great Depression.”

“These responses played major roles in igniting a robust recovery,” Yellen noted in a speech on Thursday in Washington, per Fox Business.

“Notably, the American Rescue Plan played a central role in driving strong growth throughout 2021, with the United States real GDP growth outpacing other advanced economies and our labor market recovering faster relative to historical experience,” she continued. “The recovery packages sought to protect against tail risk. They were not just tailored to address the median outcome.”

Yellen’s statements come as there is now increasing talk surrounding the fact that government-issued direct payments from previous stimulus bills should, in fact, be blamed for the current high-inflationary pressures that are being felt across the country. The latest consumer price index (CPI) was found to have surged 8.5 percent year-over-year, hitting the fastest inflation rate in more than four decades, according to Labor Department data.

Seemingly sharing Yellen’s stance is former Democratic presidential and New York mayoral candidate Andrew Yang, who long has been a strong proponent of universal basic income (UBI). During his presidential campaign, he called for issuing $1,000 to all American adults on a monthly basis.

“Money in people’s hands for a couple of months last year—in my mind—was a very, very minor factor, in that most of that money has long since been spent and yet you see inflation continue to rise,” Yang told CNBC on the sidelines of the Bitcoin Miami conference.

He contended that stimulus checks comprised “maybe 17 percent” of all the money issued via the CARES Act, adding that before the pandemic and direct payments the chief drivers of inflation were staples such as education, health care, and housing.

The current inflationary pressures, according to Yang, have more to do with pent-up demand and not enough inventory. “Everyone is concerned about inflation,” he said. “I’m concerned about the fact that it’s making a lot of Americans’ lives miserable.”

Still, a recent analysis released by the Federal Reserve Bank of San Francisco has pointed to increased government spending over the course of the last two years as the reason for today’s red-hot inflation.

“Fiscal support measures designed to counteract the severity of the pandemic’s economic effect may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021,” researchers wrote in the San Francisco Fed’s weekly Economic Letter.

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.