What lies behind Joe Biden’s ambitious plan to revive the economy and deal with China’s boom

President Joe Biden has a plan to emerge from the pandemic crisis and face increasing competition from China. It is a two-part program, from about four trillion dollars, to rebuild the economy. The first installment, the US Jobs Plan, includes a $ 1.9 trillion stimulus package that has already been approved by Congress. The second, Biden presented Wednesday in a speech at a Carpenters Union training facility outside of Pittsburgh, largest modernization offer since Roosevelt’s New Deal and the largest infrastructure reconstruction since Eisenhower built the nationwide highway system in the 1950s.

Son 32,000 kilometers of roads and highways, the repair of some 10,000 bridges and the construction of 500,000 charging stations for electric cars. All of this will happen over the next eight years and will create millions of jobs. “It’s not a plan that goes with little girls,” Biden said in his speech. “Is it big? Yes, is it bold? Yes, and can we get it? Yes”. Well, it will all depend on the Republican opposition in Congress who will make his life impossible before releasing such a sum of money. In Washington, they say it will be one of the most controversial projects in history.

Although no one can say it is not necessary. According to the Association of Civil Engineers, 43% of highways are in poor condition, while 42% of the 617,000 bridges are at least 50 years old. 7.5% of them are structurally deficient. Public investment has fallen by 40% since the 1960s and the richest country in the world ranks 13th when the quality of its infrastructure is assessed. “We will invest in the country in a way that has never been seen since we built the interstate highways and won the space race,” said the White House. In his speech, Biden called it “the biggest investment plan since WWII, which will create millions of well-paying jobs; a generation’s plan ”.

In addition to the road network, it plans to modernize the electricity network, water supply and access to High speed internet with new 5G technology. Two million houses and buildings, schools and kindergartens also need to be rebuilt. And all with a considerable work of innovation in design and technology. Perhaps the most ambitious initiative is one that would end gasoline-powered cars and America’s historic dependence on oil. The “electric car revolution” plans to replace at least 20% of school transport buses. Something essential to support the total renewal of the vehicle fleet with cars that do not produce greenhouse gases.

Biden assures him that he will finance it all with a tax increase for large companies which will drop from the current 21% to 28%. Obviously, this will have a lot of opposition that will test your negotiating skills. “Raise taxes” are very bad words for centrist Republicans and Democrats. He will have to settle the conflict between the left wing of his party which proposes a Green New Deal, with an economic revitalization taking care of the environment, and the conservatives and Trumpists who will not oppose a dollar that goes from private activity to condition. .

Anyway, four trillion dollars is an incredible amount, roughly one fifth of US GDP. This is the type of expense that has the potential for transformation. But you have to create a national consensus to deal with it the way the White House wants. Since giving a campaign speech last October near the famous Franklin Delano Roosevelt complex in Warm Springs, Ga., “Biden has made the late emergency and the warmth of FDR his personal touchstone, as has Obama did. Lincoln’s emotional abduction ”. The political benchmark of Biden’s plan is the New Deal. “But the New Deal worked in a different economic universe: unemployment was around 25% and working hours had fallen so far that about half of the country’s human capital was unused. The public works program represented two-thirds of the New Deal budget; it was designed to meet the expenses that the market economy could not afford and to put this human capital to profit, ”wrote Benjamin Wallace-Wells in The New Yorker. Now, unemployment is around 6% and the recovery is well advanced; Goldman Sachs economists have announced a dizzying forecast of the kind of growth not seen since the early 1980s. The scene is very different.

And concrete measures for the chapter that will rebuild have not yet been presented “Human infrastructure”. In the White House newsroom, they say the package will include funding for universal preschool education, a free community college, and a larger family license. This is the most recent part of the proposal. Part of it was already in “21st century liberalism” that Hillary Clinton presented in her presidential campaign before losing to Donald Trump. A plan which was then defined as “The belief that the way to fix what afflicts America is to unleash its talent, to make opportunities more accessible and fairer.”

“If we look over our shoulder, which Americans don’t often do, we’ll see what other countries with advanced education have been doing for a long time: They have programs that proclaim that “We are a country”, that “we are a community”, that “our children are the children of others”Harvard economist Claudia Goldin commented in the same New York note. “And in the United States, honestly, for a country that pioneered mass education and free education, we forgot this concept for a long time. We have been divided over who determines what happens to children, and your children are your children, and my children are my children.“. America’s educational advantage over other countries eroded in the latter part of the 20th century and was overtaken not only by the Scandinavian countries – traditionally more advanced – but by China, a power with which the United States contests leadership. of the scientific revolution. of the second half of the 21st century.

China to overtake the United States as the world’s largest economy in 2028, five years earlier than expected, according to the Center for Economic and Commercial Research (CEBR). This, thanks to his skillful management of the pandemic. China was the only major global economy to avoid recession in 2020, and overtook the United States as the top foreign direct investment destination last year. Washington’s strategic dependence on Beijing was evident during the pandemic, as happened with the assembly line disruption at auto factories due to shortages of critical components, all from manufacturers. Chinese. The extraordinary plan launched by Biden aims to address these shortcomings and weaknesses. It’s in the interests of the Americans, but he has his eye on the Chinese. It’s a good argument for winning battles with Republicans and getting the funding you need.

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