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Biden heads for Congress clash over how to fix Covid-era economy – National Post

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“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.

Senate Majority Leader Mitch McConnell (R-KY), delivers his victory speech at the Omni Louisville Hotel on November 3, 2020 in Louisville, Kentucky. Photo by Jon Cherry/Getty Images

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:

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Can't solve economy issue without solving COVID-19, says professor – KitchenerToday.com

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It’s a classic case of trying not to put the cart before the horse.

There’s no doubt the economic disaster is caused by the COVID-19 pandemic, but an associate political science professor at Brock University indicates you can’t solve the economic crisis without dealing with the health crisis first.

“You can’t have a strong functioning economy if you’ve got the disease running rampant in the community, it just can’t happen,” Blayne Haggart told The Mike Farwell Show on 570 NEWS.

He said economists have been clear on the issue from the beginning, advocating for financial support on the health side and figuring out later how to pay for it.

Haggart said overall, while we started off the pandemic well and saw numbers begin to drop, not enough was done to prepare for fall and winter, such as adequate investments in contact tracing and testing.

He said when it comes down to it, just the mere presence of the virus is causing the economic problem, not the restrictions related to it.

“People are not going to go into shops (as per usual), even if there’s no government intervention, because people don’t want to die,” Haggart added.

“Some people will, but a lot won’t, so businesses are going continue to be depressed up until the moment where the disease finally hits a breaking point, where we’ve got to basically close things down, or everybody gets sick.”

“That’s the kind of roller coaster that we’re on, and the key is to get off it.  The longer you wait, though, the more costlier it is to get off the roller coaster.”

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Reimagining the global economy for a post-COVID-19 world – Brookings Institution

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When the COVID-19 pandemic sent the global economy into a deep recession, it exposed structural weaknesses in economic institutions and highlighted the need for reform. The challenges countries face today are daunting, but this moment should be recognized as an opportunity to build back more sustainable and inclusive economies. David Dollar is joined by three Brookings experts—Eswar Prasad, Marcela Escobari, and Zia Qureshi—to discuss their forward-looking policy proposals for a post-COVID-19 world.

Prasad, Escobari, Qureshi, and Dollar are all contributors to a new report, “Reimagining the global economy: Building back better in a post-COVID-19 world.

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Singapore upgrades third-quarter GDP, sees economy returning to growth next year – TheChronicleHerald.ca

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SINGAPORE (Reuters) – Singapore’s economy contracted much less than initially estimated in the third quarter due to gradual easing of COVID-19 lockdown measures and authorities expect the city-state to bounce back to growth next year from its worst recession.

Gross domestic product (GDP) fell 5.8% year-on-year in the third quarter, the ministry of trade and industry said on Monday, versus the 7% drop seen in the government’s advance estimate.

Analysts expected a 5.4% contraction, according to the median of 10 forecasts.

The government said it now expects full-year GDP to contract between 6.5% and 6% versus its prior forecast for a 5% to 7% decline. The country is still facing the biggest downturn in its history.

The economy is expected to grow 4% to 6% next year.

“The recovery of the Singapore economy in the year ahead is expected to be gradual, and will depend to a large extent on how the global economy performs and whether Singapore is able to continue to keep the domestic COVID-19 situation under control,” the MTI said in a statement.

The economy grew 9.2% from the previous three months on a seasonally adjusted basis, compared with the 13.2% contraction in the second quarter. The bounce marked the end of a “technical recession”, as it followed two preceding quarterly contractions.

(Reporting by Chen Lin and Aradhana Aravindan; Editing by Sam Holmes)

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