Thursday, June 17

The Guardian’s Take on Biden’s 100 Days: Going Big, But Not Big Enough | Editorial


JBiden’s first 100 days in office signaled that the future doesn’t have to be a repeat of the past. The President of the USA speech to Congress this week he made it clear that Trumpism was a warning from history, a reminder that no republic is guaranteed to last. The United States remains in danger: its decline accelerated by a wicked economic model and by leaders who are unable or unwilling to remedy it. It is a relief to find a president in the White House who wants to bridge divisions rather than widen them. Biden is to be commended for saying he will stop the rot and for acknowledging the challenge to democracy he poses. autocracy. But your answer runs the risk of being ruined by an obsession with containing nonexistent tax risks.

The Biden White House proposes spending $ 4 trillion, with about half of the money used for write again the social contract. The rest will create jobs, with investments in infrastructure to reuse the post-Covid economy for a carbon-free world. The problem is not that money is spent to fix a broken society. It is also not wrong to ask the rich to pay their fair share of taxes. The problem is, Biden says that spending should be balanced for tax increases or savings from other government programs.

This is a self-imposed and self-defeating restriction. It seems like a bad economy to pay for every dollar invested in early childhood education when every dollar pays off. $ 7.30 in benefits. Several Center Democrats have already voiced their opposition to the proposed tax increases. If Mr. Biden wanted cash, he could back the Internal Revenue Service to pursue the $ 1 trillion in unpaid taxes each year. With a very slim Democratic majority in the US Senate, risk that privileging arbitrary tax limits will lead to no laws being enacted or spending cuts to match reduced revenues.

Biden’s intention to break a failed economic paradigm is a good one. It would be a scandal if it were sacrificed on the altar of budget neutrality. The threat to liberal democracy does not come from fiscal incontinence but from political polarization. The United States has spent decades running large deficits without adverse macroeconomic consequences. In Washington, a debt crisis forever seems to be coming. However, it never comes. The nation is increasingly threatened by increasing levels of inequality, financial instability, and ecological calamity. The golden age is seen egalitarian compared to the emerging concentration of wealth. Either democracy must be renewed by freeing the state from ideological constraints or wealth is likely to cement a less democratic regime.

It doesn’t make much sense for Biden to raise balanced budgets when the country faces existential options, a point recently. done for two Economic advisers to the Obama-era White House. No one doubts the sincerity of Biden’s team. The question is whether they have subordinated the scale of the crises to the politicking of Congress. Adam Tooze of Columbia University pointed that the president’s climate spending amounts to about 0.5% of America’s GDP, an amount 10 times less than that required to decarbonize the economy. Economist Stephanie Kelton wrote that to accommodate such large expenditures, the Biden administration “would have to develop a solid plan with a focus on containing inflationary pressures.” These are the arguments that Mr. Biden should have with his party, not if the richest should pay for the fight against poverty programs.

It is best to let the government’s fiscal balance stabilize at the level necessary to cope with the multiple emergencies facing the United States, given the spending and portfolio decisions of the private sector. It is not the case that the government ability to spend it is limited by budget accounting or temporary, while interest rates remain low. US Federal Reserve bond purchase programs can control returns. Biden’s economic team understands that a strong economy benefits the bottom half of America the most. Yet his spending plans threaten to focus the debate on reducing the deficit rather than bailing out the country.




www.theguardian.com

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