On The Move with Trillions of Dollars
Democrat Joe Biden, the 46th President of the USA, draws parallels and comparisons with FDR and his 'New Deal' in the early last century and with ambitions to rival.
Extravagant and costly spending plans with Big Government at the helm that opponents describe as a colossal mistake of 'socialist dreams,' adding that the address was high on emotion but light on policy. Perhaps the best aspect of Biden's speech was general relief that he managed a competent and persuasive delivery with 100 days in office now accomplished.
He used his first joint address to a masked and sparsely attended Congress on Wednesday, April 28th to pitch an estimated $4+ & $6 trillion of stimulus investment in the USA that would fundamentally transform the State's role in directing the nation's affairs both economic and societal.
Below we approximate the allocations and objectives:
Climate change: $1.7 trillion to achieve net-zero carbon emissions by 2050, through regulatory efforts and new spending.
Infrastructure: $1.3 trillion to repair existing infrastructure, high-speed rail on selected routes and green electric vehicle subsidies.
Healthcare: $750 billion to increase and improve healthcare subsidies and insurance.
Preschool: $750 billion to massively increase funding for public schools, providing more nutritious food at mealtimes for students and enhanced benefits to teachers.
Post School: $750 billion to provide free 2-year community college or training education, appropriate student aid and 'targeted' rather than general loan forgiveness.
Housing: $640 billion to provide more affordable housing and assistance/subsidizing to buying or renting homes.
Opioids: $135 billion to promote massive federal investment in prevention, treatment, rehabilitation and recovery from the nationwide crisis.
The speech headlined as 'Once in a Lifetime Opportunity' and lasting around one hour, attempted to unify but struck a stoic tone. A nation that remains divided on many issues but hopefully emerging from unprecedented economic upset amid deeply divisive health issues with concomitant protocols. He glossed over policy detail but instead focused on broad convictions and personal experiences.
The core of Biden’s policy would appear to be the 'American Families Plan' as he stressed 'jobs creation' [blue collar] and pleaded with Congress to support increased taxes on those earning over $450,000 to subsidize child care, guaranteed paid family leave, and free community college.
In paying for all this, he reiterated that GOP trickle-down economics had not worked, but rather by raising Capital Gains taxes to just short of 40% [from 20%] for the wealthiest Americans earning over $1 million. He attempted to justify this by saying, “I'm not looking to punish anyone. What I have proposed is fair and fiscally responsible" and will bring about the requisite equitable solutions and rewards.
Upgrading technology at the Internal Revenue Service [IRS] to better increase audits and collections is expected to bring in an additional $700 billion in tax revenues while also requiring banks to co-operate on client account inflows.
On China, he struck a defiant note describing President XI as an 'autocrat' who does not believe democracy can survive the 21st century, adding " he's deadly earnest about becoming the most significant and consequential nation [China] in the World."
We can draw from that uncompromising statement little prospect for tariff and trade wars ending anytime soon and guard raised concerning Taiwan.
Since Biden’s January inauguration, US markets have enjoyed the best performance since the 1950s and the election of Dwight Eisenhower.
The US commerce department reported that 1st quarter growth in 2021 soared 6.4%.
Following the speech to Congress, markets opened nearly 200 points higher, then went negative before closing at a new record of 34060. For the moment, markets seem not to be discouraged.