There is still more to come

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Over the past year, one central bank or government agency after another has come up with an aid programme to help the economy through the prevailing pandemic. Thousands of billions in euros, dollars, yen, and yuan have been printed or borrowed. The most recent aid dates from the beginning of this month when President Biden’s coronas package worth 1900 billion dollars was passed by the US Congress. Cheques for $1,400 for Joe Sixpack are already out the door.

But there is still more to come. Yesterday, during a speech in Pittsburgh, Biden unfolded his plans to spend another 2 000 billion. This time on the infrastructure of the United States. With this, the president wants to fight the climate crisis and prepare his country for the competition with China. The plan covers an 8-year period and this time the Americans will have to bear the costs themselves. Biden intends to pay for his plans in 15 years by raising taxes. For example, companies will have to pay 28 percent on their profits. In 2017, previous President Trump had lowered this ‘corporate tax’ from 35 to 21 percent. And US multinationals will again have to pay more tax on their foreign profits. This tax had also just been lowered by Trump, which meant that a lot of capital from American multinationals was being brought ‘home’, giving a major boost to US stock markets.

The plan, called the ‘American Jobs Plan’, is already seen as the biggest jobs plan in years. The plan consists of two phases. During the first phase, American bridges, roads, ports, railways, and airports, which are in a bad state of repair, are to be renovated. But money is also being invested in leaking sewage systems and the often still leaded water supply, as public transport and the Internet must become faster and more powerful. There is also a lot of investment in electric vehicles. The number of charging stations will be greatly expanded and there will be tax incentives for the purchase of electric cars. These cars must, of course, be manufactured in the United States. With these and other measures, as well as investments in clean energy sources such as sun and wind, Biden wants to achieve his goal of the United States becoming completely climate-neutral by 2050.

Biden was less concrete about the second phase. He will provide more details in a fortnight. The intention is to invest more money in education, childcare, and care for poor families in order to reduce social inequality in the United States. The funds for this will come on top of the 2 000 billion that is now being released for the plans in the first phase. The plans will still have to be discussed at length in the US Congress.

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