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Original title: Biden will announce “open doors and release water” 4 billion yuan, has not yet been released, has caused disagreements
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Following the 1.9 trillion yuan epidemic aid bill, the US government once again proposed a large-scale spending proposal. Biden is expected to announce a $ 2.25 trillion employment and infrastructure support package on Wednesday, and will increase taxes on businesses. The White House will issue a second set of drafts in a few weeks, which is expected to include health insurance expansion and child tax deductions. The total size of all banknotes can exceed US $ 4 trillion. This news has raised market inflation expectations and the US stock market is under pressure.
Biden to Announce $ 2 Trillion Infrastructure Plan in Pittsburgh and Raise Business Taxes
More than half a century after Johnson declared war on poverty,
US President Biden plans to respond to the persistent challenges facing the United States on the issue of inequality by massively expanding public spending and revising tax laws.
Biden will begin detailing his plan in a speech in Pittsburgh on Wednesday. There are reports that Biden is expected to announce a $ 2.25 trillion employment and infrastructure support package on Wednesday.
The package includes approximately US $ 650 billion to rebuild roads, bridges, highways and ports, approximately US $ 400 billion for the care of the elderly and disabled, US $ 300 billion for housing infrastructure and US $ 300 billion to revitalize the manufacturing industry. In addition to the $ 2.25 trillion plan, the White House will also launch a clean energy loan program of approximately $ 400 billion. Other investments include hundreds of billions of dollars for power grids, national high-speed broadband, and potable water.
Biden will describe the infrastructure part in his speech and the content of the social spending plan will be announced at the end of April. The White House will issue a second set of drafts in a few weeks, which is expected to include expanded health insurance and child tax deductions.
The total size of all banknotes can exceed US $ 4 trillion.
Brian Deese, one of Biden’s top economic advisers, said Tuesday that the infrastructure package will last eight years and be about $ 2 trillion in size. People familiar with the matter said:
This spending will be financed by raising the 15-year corporate tax rate from 21% to 28% and imposing a minimum tax rate on global corporate profits.
Although Biden’s plan includes traditional highway, bridge, and airport projects, it also includes projects like high-speed broadband, as well as long-overlooked priorities like upgrading the power grid, replacing plumbing in homes. and schools, and commercial buildings are remodeled to suit the weather conditions, etc.
The scale and breadth of the proposal is far greater than the $ 305 billion five-year ground transportation plan in 2015, the last long-term infrastructure bill in the United States. He envisions a costly attempt at political strategy in the next ten years,
Create high-paying jobs by upgrading the country’s infrastructure and preparing for future weather patterns caused by climate change, while financing the rich and businesses by increasing taxes.
Although Biden will ultimately propose two comprehensive legislative proposals with a total scale of between $ 3 trillion and $ 4 trillion, he is expected to focus on closer discussions on rebuilding roads and bridges and transitioning to clean energy on Wednesday.
The economic plan has yet to be released, prompting disagreements in political and academic circles.
However, not only members of Congress but also economists have very different views on this proposal.
Right-wing economists warned that raising taxes on America’s wealthiest groups and companies would hurt overall economic growth, but liberal economists said the “trickle-down theory” practiced in recent decades has been unsuccessful. and the strategy to change the time has come.
Heather Boushey, a member of the White House Council of Economic Advisers, said last week: “It is important to recognize that we have seen an increase in economic inequality over the decades and the ultimate measure of economic success is how well it serves. to all the American people.. “
For many people, the situation is not so good. Before the outbreak of the new corona epidemic, even during the longest sustained growth period on record in the American economy, the gap between the richest and the middle class and the lowest income class in the United States was widening. . Fed Chairman Powell and others believe that inequality will hamper economic development, which is also one of the reasons he formulated long-term monetary policy reforms. The following figure shows that the gap between rich and poor in the United States is widening. Currently, the wealth of American black families is only 1/7 that of white families. In 1967, this ratio was 1/5.
Economists generally believe that even if there are major policy changes, this trend cannot be easily or quickly stopped or reversed. Brad Delong, an economics professor at the University of California, Berkeley, said: “This is equivalent to making a supertanker change direction. It has taken us a generation and a half to reach this level. Change.”
US stocks tumble, Biden’s infrastructure investment plan sparks attention
Investors are weighing the possible consequences of the Biden administration’s implementation of more stimulus measures. The US stock market was down on Tuesday and US bond yields hit a 13-month high. Utilities, information technology and consumer staples are dragged down
S&P 500
The index fell, but financial stocks rallied, reversing the decline since the Archegos Capital Management liquidation incident.
JJ Kinahan, chief market strategist at TD Ameritrade, said:
“The market is still trying to clarify the issue of the transaction. The issue of home-based epidemic prevention stocks has basically been going on for a year. Now the number of people vaccinated is increasing, but many states have seen a increase in cases. This situation seems complicated. It is also like that. “
Investors are currently paying close attention to Biden’s speech on Wednesday, regarding the scale of spending and content related to tax increases or will it bring more volatility to the US stock market.
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