Joe Biden has recently been announced as the next US President. With this, Biden is inheriting an economy that has been destroyed throughout 2020. Therefore, Biden will have to come up with an economic recovery plan at the forefront of his presidency. 2020 has seen high unemployment, bankruptcy, and eviction rates. Additionally, the winter months are approaching, which is when Covid has been predicted to be more prevalent and deadly. Therefore, his economic policy will also need to be a pandemic policy.
Biden plans to start with another stimulus bill. While this requires a lot of spending, this is only the start. Afterwards, he plans to spend over $7 trillion on initiatives such as infrastructure, housing, education, economic fairness, and healthcare. His economic policy has been given the title Build Back Better.
Do you think this plan will work? What short term and long term effects will come out of his $7 trillion spending on initiatives?
I think after what we have learned in class, increased government spending will only increase income and output in the short run. We have learned that prices will increase and stay high in the long run, while GDP will return to the neutral level. We know stimulus will help for now, but what we need to keep our eyes on are how his other policies will benefit the economy and country as a whole in the long run because stimulus doesn't solve long run issues.
ReplyDeleteI agree with Libby. Due to the current, extenuating circumstances I think this spending will be beneficial for now but we need to be careful about what it means for the future. It is important to ensure everyone is able to get back on their feet as the world continues to battle the coronavirus but this may be too much government spending all at once and may be more beneficial to the long run if it is slowly implemented and allows time for the economy to readjust.
ReplyDeleteGovernment spending will certainly help our economy grow back and hopefully keep us from falling into a recession. I think many of his initiatives for investing in infrastructure and education will likely help our economy in the long run. However, most of his plan will benefit us more in short run,
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