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| Economy |
| Biden's COVID relief plan could shrink economic growth over long-term, study shows |
| 2021-02-04 |
| [FOX] Democratic lawmakers are poised to plow ahead with passing President Biden's $1.9 trillion coronavirus relief package, a measure that will provide an immediate burst to the U.S. economy but that could drag on growth in years to come. That's according to a new analysis published Wednesday by a nonpartisan group at the University of Pennsylvania's Wharton School, which found that Biden's proposal could increase the nation's GDP by 0.6% in 2021. But the additional public debt resulting from his measure would decrease GDP, the broadest measure of goods and services produced in a nation, by 0.2% in 2022 and 0.3% in 2040. "The Biden relief plan leads to an increase in output in 2021 as the plan's expenditures stimulate the economy, but GDP declines in subsequent years as the additional public debt crowds-out investment in productive capital," the report said. "The increase in output 2021 is due to the immediate stimulative effect of the economic recovery plan." Unlike the $2.2 trillion CARES Act, which Congress passed last March at the beginning of the pandemic, the U.S. economy is much closer to its pre-crisis output. As a result, Biden's $1.9 trillion plan "would generate less additional output in 2021 than it did in spring or summer of 2020 when the U.S. economy was further from potential," the analysts said. For instance, Biden has made a third stimulus check — worth $1,400 — an integral part of the emergency aid package. But the Penn Wharton Budget Model estimated that 73% of check recipients would stash the money away in household savings rather than spend it. Just 27% would go to increased consumption, the analysts projected. |
| Posted by:Besoeker |
| #1 Hyperinflation, here we come This doofus will make Jimmy Carter happy: "See? There was a postwar president whose economic record was even worse than mine!" |
| Posted by: Gromble Wholutle2119 2021-02-04 13:44 |