Economy & Politics

US election What Biden wants to do differently in economic policy

Joe Biden plans billions in investments in public goods from modern infrastructure to clean energy to education and health for a possible presidency.imago images / ZUMA Wire

Many Democrats hope that one President Joe Biden with its economic policy the country quickly out of the Corona crisis helps – and people get back to well-paid ones more quickly Jobs than in the subdued upswing after the global financial crisis more than ten years ago. But they also want a different kind of growth: a better life for low-wage earners and minorities, a greener society and a better educated workforce.

Biden’s platform “Build Back Better“- the better reconstruction – comes from his already as Vice-President under President Barack Obama represented ideas of combining overspending with modern structural policy. Are planned Investing billions in public goods from modern infrastructure and clean energy to education and health – and financing them through higher taxes on the wealthy. A Austerity is not to be expected from Biden. How much Weight left on his team is but still not clear.

Biden received a kind of economic accolade for his program from 13 Nobel Prize winners in Economics (from George Akerlof to Richard Thaler), who praised his economic policy agenda as a trailblazer for “faster, more robust and fairer economic growth”. “Despite differing opinions on details, we believe that the general agenda makes our nation healthier and fairer and creates investment, sustainability, resilience, job opportunities and employment – and is far superior to Donald Trump’s counterproductive economic policies.”

Investment climate

In any event, Biden will, should he become president, find a country in a state of emergency. The presidential candidate wants to tackle the crisis with an economic program that will create millions of jobs and give the economy a lot of momentum, so the promise. Incumbent Donald Trump condemns the plans as a destructive route into recession. In addition to Biden-friendly economists, they also gave them a positive appreciation for great economic advisors such as Moody’s Analytics and Goldman Sachs.

Moody’s expected – in the case of a Republican-dominated Senate in Congress – considerable hurdles to implement the economic agenda. Like Trump, Biden would have to govern with decrees. But at least for an anti-Corona crisis package, Congress would probably approve debt-financed spending plans, so the expectation. Biden is a reconciler and not a Splitter. Its yeartenthlong experience in the Senate and as guardian of President Barack Obama’s billion dollar relief program after the global financial crisis has earned him the reputation of a skilled negotiator.

“With the prospect of a still ailing economy and little resistance to budget deficits, there may be a way for a deal that will see higher spending on infrastructure and social affairs in exchange for tax cuts for middle-income households,” says Moody’s ahead. They see economic output growing by around 3.5 percent annually until 2024, more than below one Trump administration. The loss of around ten million jobs in the Corona crisis would more than be made up for by 2024 – with a faster return to full employment than under Trump.

Whether Biden can reverse Trump’s corporate tax deductions remains open with a Republican Senate. That he tax corporations again with 28 instead of 21 percent and also top earners over 400.Want to ask for $ 000 more to cash up, considered Moody’s as burden for investment and production growth. In Goldman Sachs’ analysis, growth gains outweigh the negative effects of tax increases.

Debt

Not only is Biden’s bailout package much larger than Trump’s, but his entire program would cost more than 7th Trillion dollars (Moody’s) In the short term, drive up budget deficits and national debt more sharply than Trump’s program. Above all, $ 2.4 trillion in public investment in transport, green energy, education and schools, welfare systems and housing, health care, research and innovation is expected to be spent swiftly. At the end of the decade, Biden and Trump’s policy preferences would mean a debt ratio of 130 percent to GDP – compared to 108 percent today.

Money well spent, as many economists believe. “In today’s world, we want governments to accumulate deficits because they value excess savings,” writes Paul Krugman in the New York Times. Productive deficits strengthened investments and would have positive long-term effects on the economy – in contrast to Trump’s budget policy, which managed to reduce taxation to entrepreneurs but failed to make the promised investments. Biden’s plans would be “a lot more Boom for every dollar ”.

sustainability

Joe Biden has already announced a big step in terms of climate policy. Wrote on twitter heto become a Biden administration on the day of inauguration rejoin the Paris Agreement on Climate Change. Trump announced the US would leave the agreement three years ago, the now also officially effective has been.

That announcement, just after the election and even before a result is determined shows: The topics of climate protection and sustainability are likely to have a significantly higher priority under President Biden than they last had under Trump. The democrat wants 2 Investing trillions of euros in climate protection, clean energy and green infrastructure. If if Biden has its way, the US should be CO2 neutral by 2050. Should be invested in clean energies and amongst other things also in a sustainable agriculture. Biden wants to accelerate the energy transition and, for example, state subsidies for charging stations for electric cars. In addition, shoulden Among other things, the electricity sector will be CO2-free by 2035, buildings will be renovated and investments will be made in innovation.

So while wind and solar companies, for example, are likely to hope for an election victory, Biden’s oil industry could face tough times. in the the second TV duel of the presidential candidates cared the statement Bidens for excitement, that the oil industry one Is discontinued. He sharply criticized the government subsidies for the industry. Biden is likely to campaign for stronger regulation of oil and gas companies.

Biden also wants to invest in streets, green spaces and broadband expansionen, emission-freen publicn Upgrade local transportn and 1.5 million sustainable homes and units let build. The aim is to create jobs in the relevant sectors, for example a million new jobs in the auto industry.

Social

But Biden is also planning massive investments in the social field. I.n the area of ​​the care economy, which also includes care and support, could be under a President Biden rand 775 Billion US dollars flow. According to the electoral program, this money will guarantee access to affordable childcare, a preschool for D.rei- and Vierjyear oldOand the profession of carers and educators are upgraded. In addition wants the democrat denr Access to care for the elderly and people with disabilities Remove.

The one passed by Obama Affordable Care Act, the Guaranteed health insurance for millions of Americans, Biden wants to defend and expand. For example, low-income Americans should have easier access to health insurance and invest in community health centers to be doubled.

Biden quit in addition, a program that should help small companies and entrepreneurs to cope with the Corona crisis. Simultaneously will he “Corporate America“To bring a fair share of taxes to pay. In addition the jobs of educators, firefighters and other important workers should be secured and the unemployment in the Corona should be secured-Krise.

Foreign trade

The hope of a change of power in the White House is often linked to the hope that the trade disputes will end. But even under Biden these should not vanish into thin air so quickly. Because even the democrat should not completely break away from the protectionist course of its predecessor, even under him, the trade imbalances between the USA and Germany, for example, would remain a point of conflict.

It is considered very insecurethat Biden would immediately lift the punitive tariffs that Trump imposed. Also gcompared to Chinan the US under Biden continues to drive a tough course. Because the Democrat also wants to reduce economic dependence on China. And also in the World Trade Organization (WTO) becomes unlikely to be restored to the pre-Trump state.

But what about Biden well changest, is the tone. Biden is expected to make trade disputes and disputes less confrontational and escalating would tackle as Trump. He is also likely to rely more on cooperation and joint solutions – for example with the EU. Biden wants to strengthen the “coalition with democracies that stand by our side” and rebuild international partnershipsen and renewn.

This also applies to the disputes surrounding the Baltic SeaNord Stream 2 pipeline. Whether Biden to the Trade penalties would hold onis still unclear. Also here will however assumed that the democrat much more on diplomacy than auf Set escalation becomes.

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