The Biden administration is waging a wave of growing optimism over the recovery from the COVID-19 recession, with the president and top surrogates on the verge of selling their relief plan.
Economists believe the US is ready for a quick setback, thanks in part to the $ 1.9 billion bill signed on Thursday, which again sends out round stimulus checks, extends extended unemployment benefits and offers hundreds of billions of dollars in authorization for local governments, small businesses and hard-hit industries.
The White House hopes to send momentum out of the bill President Biden
Joe BidenPentagon is very excited to extend Guard’s time at Capitol Booker to try to make the expansion of child tax credits permanent. Sullivan says tariffs will no longer be the focus of talks with China.The other initiatives, such as a faster vaccination campaign, a package to rebuild the country’s infrastructure and additional measures that the government and some economists consider necessary to improve the long – term trajectory of the economy.
“After long, dark years – one whole year – there is light and hope for better days ahead when we all do our part,” Biden said in a speech to the country on Thursday night. “This country will be vaccinated soon. Our economy will recover, our children will be back in school. ‘
“No one could have imagined what we were going to go through more than a year ago. But now we get through it. ”
Analysts predict growth in gross domestic product (GDP) to between 5 and 7 percent in 2021, after a decline of 3.5 percent in 2020. The unemployment rate of 6.2 percent, which is already much lower than the crisis peak of 14 , 7 percent, may fall below 4.1 percent. according to Goldman Sachs by the end of the year.
The new injection of aid is also coming amid signs of a rapid economic recovery. The US added a strong 379,000 jobs in February, consumer and corporate sentiment rose, unemployment fell below expectations this week and inflation remained below the 2% target of the Federal Reserve.
The US has another steep climb ahead. About 9.5 million jobs lost to COVID-19 have not yet been replaced, millions of households are still struggling with food and housing insecurity, and large sections of the U.S. workforce will have to find new jobs as the entire industries of the trying to build up ground down. .
Nevertheless, many economists are confident that Biden’s bill has launched the process, with significant lifelines for families that have sunk, help for states to fund essential services and enough support to go beyond the direct payments to Americans coming from will be shipped this weekend.
“The White House and the Democrats on the hill have done an excellent job of ensuring that the combination of immediate assistance and additional assistance … will combine with plenty of household savings to strengthen the economy over the next three years,” he said. Joe Brusuelas said. , chief economist at the audit and tax firm RSM.
Biden is eager to show how he has kept his promise to live up to a major emergency relief plan, which according to polls is supported by about 75 percent of Americans. Biden is on its way to key swing states to sell the package, which Congress passed without a single GOP vote.
The president travels to Pennsylvania on Tuesday and holds an event with Vice President Harris in Atlanta on Friday. First lady Jill Biden
Jill BidenOvernight Health Care: White House plans PR blitz to sell coronavirus relief bill US passes 100 million COVID-19 vaccine shots | Extensive ObamaCare will be available on April 1st. The White House plans PR blitz to sell coronavirus relief bill The Hill’s 12:30 Report – Presented by Johns Hopkins University – Biden gives optimistic tone for summer MORE will also hold an event in Concord, NH, where Sen. Maggie Hassan
Margaret (Maggie) HassanSenate approves the comprehensive coronavirus measure in biased mood. Senate rejects Cruz’s attempt to block stimulus tests for undocumented immigrants. The eight Democrats who voted MORE ‘no’ to minimum wage (D) is expected to face a tough re-election campaign in 2022.
However, Republicans say the huge rise in debt, inflation potential and higher taxes will haunt Biden again – especially as he tries to take on a massive infrastructure bill.
“There is no country that sees this growth in debt and does not end up with high interest rates and inflation,” Senator Rick Scott (R-Fla.), A potential contender for the 2024 GOP presidential nomination, told The Hill said.
‘If you look at history, you will not have a growing economy if you have an administration that raises taxes. The only way out of this is to choose someone who knows how to grow the economy, ‘he said, setting aside predictions that the 2021 economy could grow at its fastest pace in almost 40 years.
While both deficits and debt soared above the previous President Trump
Donald Trump Pentagon takes heat for extending Guard’s time at Capitol Fundraising spitting points after Trump GOP gaps Trump rally organizer claims Alex Jones threatened to throw her off stage: reports MORE, including $ 1.9 billion in tax cuts and significant increases in domestic spending, Republicans struggled with Biden’s $ 1.9 billion bailout plan, saying it was poorly targeted and far too large.
They got some support from Larry Summers, who served as treasury secretary under President Clinton, arguing that the massive bill could overheat the economy.
With fresh pockets, consumers will scramble for goods and services from businesses that do not have enough capacity, leading to price increases and eventual interest rate hikes, which could slow the economy down.
In the past, established expectations that prices would continue to rise have kept borrowing costs for homeowners, car owners and businesses high.
Inflation refers to the yields of bonds on Friday to their highest point in a year.
But many experts, including Jerome Powell, chairman of the Federal Reserve, have maintained that fears are being overshadowed.
“The economy is far from our employment and inflation targets, and it is likely to take some time before significant further progress can be made,” Powell told the Senate Banking Committee last month.
He added that two decades of low inflation and a weaker ratio between government debt, low unemployment and price increases mean that the risks of overheating are now low.
The February inflation figures were just 0.4 per cent, and surveys of March’s consumer sentiment found that people were only expecting a temporary price increase.
Lindsey M. Piegza, chief economist at Stifel, says a little inflation will not be the end of the world.
“With an average inflation rate of 1.3 percent over the past five years, there is a potential for inflation to be close to 3 percent for the next five years, without exceeding the longer-term average of 2 percent,” he said. she said.
Scott says, however, that Powell’s assessment misses the point.
“He does not look at history. “He clearly does not look at what has happened in the past,” he said.
The debt may still haunt Biden.
Even before the COVID-19 bill was signed, debt levels were already on track by the end of the decade to surpass their World War II peak. The cost of the service alone is about $ 300 billion a year, about 9 percent of annual revenue.
“We have to start paying for new priorities in the future with new income and budget savings. And finally, if the economy recovers, we will have to reduce our deficits to more sustainable levels, ”said Maya MacGuineas, chair of the committee responsible for a responsible federal budget.
It could reduce the appetite for infrastructure financed by deficits by the centrist Democrats and Republicans.
‘They have already maximized the credit card. It’s going to make it very difficult for them to spend on things we care about, ‘Scott said, adding that taxpayers do not have the appetite for increased taxes.
Biden is expected to continue with an infrastructure bill this year, and ideologues across the ideological spectrum have long considered these upgrades necessary to accelerate the economy for years to come.
Brusuelas said without a significant infrastructure package, the US growth rate could fall back to the long-term trend of 1.8 percent per year.
“This is something I would think is unacceptable to most Americans,” he said. “The interest here is very high that we benefit from a number of good years of growth, but it must follow and leave a legacy.”