Joe Biden’s huge bet: the economic consequences of ‘acting big’
For decades, governments have feared inflation and ’70s-style stagnation. The US president is hoping they were wrong
US President Joe Biden’s strategy for the country’s economy is the most radical departure from prevailing policies since president Ronald Reagan’s free market reforms 40 years ago. With plans for public borrowing and spending on a scale not seen since World War 2, the administration is undertaking a huge fiscal experiment. The whole world is watching.
If Biden’s coronavirus recovery plans are vindicated, they will demonstrate it is possible to “build back better” from the pandemic and that advanced economies have been overly obsessed with inflation for the past 30 years. It will put government back at the heart of day-to-day economic management.
If the plan comes off, it will show that unnecessary timidity in recent decades has let millions suffer unnecessary unemployment, starved many areas of opportunities for improved living standards and widened inequalities...