“A big stimulus package is likely off the table,” economists Aneta Markowska and Thomas Simons of Jefferies LLC said in a note Wednesday. They forecast a “skinny” aid bill worth about $500 billion, resulting in 2021 economic growth of 4 per cent, compared with 5.5 per cent under a Democratic sweep.
The biggest threat to the recovery, though, isn’t one that Biden can easily control through fiscal policy. It’s containing the virus as U.S. cases climb to new daily highs and countries including France and Germany resume lockdowns.
Biden has said he’s willing to shut down parts of the economy as warranted to stop the spread, which would risk depressing growth. But he also supports more funding to reopen schools safely, which would free up parents for work.
To fund Biden’s proposals, the administration would be adding to the national debt while taking advantage of historically low interest rates. Biden spent decades in government warning about the dangers of budget deficits. But as president he’ll take over one of the biggest in U.S. history, and has signaled he’s in no rush to pare it back.
Biden has proposed raising corporate taxes from 21 per cent to 28 per cent, increasing income taxes for those earning more than $400,000 and taxing capital gains earnings the same as regular income for top earners. A split Congress, though, would create high hurdles to such moves.
The campaign has outlined a $3.5 trillion economic program to fund his key goals:
Source:- National Post
