Wednesday open thread: The coming of Infrastructure Week
The White House on Wednesday is expected to unveil a plan to spend $2.25 trillion on a jobs and infrastructure package that could form a cornerstone of President Biden’s economic agenda, two people familiar with the matter said.
Biden’s plan will include approximately $650 billion to rebuild the country’s infrastructure, such as its roads, bridges, highways and ports, the people said. The plan will also include in the range of $400 billion toward home care for the elderly and the disabled, $300 billion for housing infrastructure and $300 billion to revive U.S. manufacturing. And it will include hundreds of billions of dollars to bolster the nation’s electric grid, enact nationwide high-speed broadband and revamp the nation’s water systems to ensure clean drinking water, among other major investments, the people said.
This is the first part of Pres. Biden's Build Back Better plan. The second package would involve expanding healthcare access and the child tax credit, as well as instituting paid family and medical leave. The total spending on both packages could top $4 trillion.
This is on top of economists like Joseph Stiglitz saying that his plan could reshape the American economy, and end twenty years of low growth and artificially low interest rates, allowing the markets to operate more normally. (Low interest rates are a result of the 2008 crash, where central banks around the world flooded their economies with money to keep at bay a depression.)
This plan would serve to prime the pump, creating new jobs and new industries. From the Axios piece:
Where it stands: If Biden's infrastructure proposal becomes law, "We’re going to heat up the economy," said Stiglitz, who was awarded the 2001 Nobel Prize in Economics.
- "We're going to be investing, spending money on education, child care, a whole variety of expenditures across the spectrum and not just giving money to the very rich but giving money to people who actually spend it.
- "That will create more demand and that should give people more confidence to invest."
The siren song of the laissez faire free marketeers has been: Get out of the way of business. Keep taxes low on corporations. Cut spending. However, this has not brought about vibrant economies. In the US, inequality is rampant. In the EU, you have huge unemployment figures due to sclerotic labor laws. This lack of industrial policy stands in sharp contrast to those of nations like China, where governments shepherd strong growth economies, working to overtake the positions of the US and EU.
Pres. Biden and Democrats are throwing out that playbook. Their plans will be funded by dreaded tax hikes, on those very corporations out of whose way we're supposed to stay from. As the Trump tax giveaway demonstrated, giving corporations a windfall doesn't mean they'll reinvest and expand opportunity; they'll just pocket the money and wallow in gold coins like human Scrooge McDucks. The US Chamber of Commerce hasn't responded yet to this report as of this writing; however, it was supportive of the American Rescue Plan, and these new packages will increase their profits in the aggregate, even if they have to pay more in taxation.
Former president Barack Obama began moving that infamous Overton Window to the left during his eight years in office. Now his one-time wingman is sending waves of dive bombers after the vestiges of Ronald Reagan's voodoo economics. The economic doldrums in which the US and the West have been mired for going on four decades, where inequality widens and social services contract, will hopefully be lifted by these new proposals. It certainly puts paid to the notion that Pres. Biden was pushed left during the campaign by the likes of Senator Bernie Sanders, but would revert to austerity once he was in office. Once again, all his detractors deal in is malarkey.