Home Business U.S. GDP growth negative Will Biden’s “rescue plan” save the United States?
U.S. GDP growth negative Will Biden's "rescue plan" save the United States?

U.S. GDP growth negative Will Biden’s “rescue plan” save the United States?

by YCPress

January 28, the U.S. Department of Commerce released the latest report: the U.S. GDP contracted by 3.5% in 2020.

This is the largest decline in U.S. GDP since World War II and the first negative growth since the 2009 financial crisis.

From this data, it can be seen that the United States is facing a thorny problem. How can pandemic prevention and restart the economy be balanced?

The “ultimate contradiction” of American society: pandemic prevention vs restart

On January 28, the latest data released by the U.S. Department of Labor showed that the number of Americans who applied for unemployment benefits that week remained at a high of more than 800,000, and the total number of unemployed Americans is currently about 18 million.

At this time, Biden stepped forward and said that he would boost the economy and employment through two measures.

Shortly, Biden proposed a $1.9 trillion economic stimulus plan: “American Rescue Plan”.

Half of them are used to help American families, and half are used to help small and medium-sized enterprises and carry out pandemic prevention.

How much can each American get? $1,400.

If you have children in the family, you can apply for another $1,400.

But $1,400 is a drop in the bucket for many American families, or even less than a month’s rent.

In addition, Biden needs to get the budget through Congress as soon as possible.

In the United States, an important indicator to test the ability of a new president is whether he has done anything in the first 100 days of his term, which is often referred to as “First 100 Days in Office” in American politics.

To achieve this goal, Pelosi and Schumer led congressional Democrats to launch a program called “budget reconciliation”.

In this procedure, it involves urgent issues related to people’s livelihood, such as the budget, which can be passed by obtaining a simple majority of 50 votes in the Senate, instead of 60 votes with an absolute majority.

Even so, the Republican Party still has a trick to strongly interfere with Biden’s stimulus plan: repeatedly modify the budget (Vote-a-Rama) to shrink the bill.” After the budget settlement process is launched, parliamentarians can make up to 1,000 amendments to the bill.

Biden had previously said he hoped to distribute $1.9 trillion in March this year.

But bipartisan confrontation, lobbying and exchange of interests are indispensable.

The specific plot is believed to be more wonderful than the American drama House of Cards.

Biden to launch Build Back Better Plan, mid- and long term The plan covers infrastructure, manufacturing, innovation, research and development and clean energy, hitting some key points of the U.S. economy, but also facing more political obstacles.

In addition to these stimulus plans, the top priority of the Biden administration is pandemic prevention and control.

If the pandemic cannot be controlled, it will be difficult to fundamentally reverse the economic downturn.

At present, there is no turning point in the pandemic in the United States.

The pandemic has not yet been controlled, and the tearing of American society has intensified.

The last three weeks of January were described by The New York Times as “the deadliest three weeks of the pandemic in the United States”.

Since January 7, the number of COVID-19 deaths reported in the United States has exceeded 4,000 times a day. On January 20, the cumulative number of COVID-19 deaths in the United States exceeded 400,000.

There is another set of data worth paying attention to.

44 days after the first death in the United States, the number of deaths in the United States reached 25,000.

As the pandemic situation in the United States is getting worse, less and less time is spent for every 25,000 additional deaths.

After taking office, Biden said that he would inject 100 million doses of coronavirus vaccine to the American people within 100 days, but it was not easy to implement this goal.

Vaccination inequality is happening between the poor and rich in the United States, social elites and ordinary people.

Many American media commented that this is a “hunger game” about vaccines. Even Hollywood elites have done everything they can to find a coronavirus vaccine, even bribing doctors.

The pandemic is not over yet. Can the economic emergency of the United States be solved?

In fact, there is a longer-term problem hidden behind Biden’s massive stimulus package: debt.

Since last year, the United States has introduced five rounds of fiscal relief bills. Biden’s introduction of a large-scale stimulus bill means that federal spending will increase significantly.

This will lead to a further expansion of the U.S. deficit in the future, and the huge debt may threaten the long-term economic growth of the United States.

Affected by the pandemic, the budget deficit of the United States has hit a new high again.

Data released by the U.S. Treasury Department on January 13 showed that during the pandemic, federal government spending increased significantly, tax revenue fell sharply, and the U.S. budget deficit in fiscal year 2020 rose 200% year-on-year, reaching a record high of $3.1 trillion.

Meanwhile, the federal debt of the United States has reached nearly $28 trillion, about 134% of GDP in 2020, and for the first time in more than 70 years, the federal debt has exceeded the size of the economy for the whole fiscal year.

In response, Stanford economist Michael Boskin said, “The huge debt cannot last indefinitely.

At present, this kind of near-zero interest rate is bound to rise, and the United States will pay a high price for these debts in the future.”

The Associated Press predicts that the economic expectations of the United States in 2021 will remain relatively confused.

Experts warn that unless vaccines are distributed throughout the United States and federally led anti-pandemic efforts are carried out throughout the United States, the economic recovery of the United States will be difficult to achieve.

However, this process may take months. During this time, millions of Americans will continue to struggle to survive.