ECONOMY

Biden’s $6 Trillion Spending Program Isn’t Welfare

More than 40 years have passed since Ronald Reagan ascended to the White House with a powerful and simple message: Government is the problem, not the solution. Republicans, and many Democrats, bought into that credo, and it has held enormous sway in policy discussions ever since.

President Joe Biden — battling a pandemic that has unraveled public health and the economy — has offered policy prescriptions meant to blunt Covid-19’s impact. But the White House is also seeking to remedy ills such as fraying infrastructure and growing income inequality that sideswiped the middle and working classes long before Covid-19 arrived. Biden is reaffirming the idea that government can be a constructive economic and social force, and he’s offering a historic counterargument to Reagan’s orthodoxy.

Biden’s ambitions have inspired passionate critiques about the necessity of his programs and whether the federal government can fund them properly. We’ll address both of those topics in a pair of related columns. This one looks at the efficacy of Biden’s agenda.

The three pillars of Biden’s $6 trillion program are the $1.9 trillion American Rescue Plan, the $2.3 trillion American Jobs Plan and the $1.8 trillion American Families Plan. The Rescue Plan, a public health and vaccination effort introduced the day Biden was inaugurated, has already been enacted. The latter two plans face uncertain futures in a sharply divided Congress with a narrow Democratic majority.

The Jobs Plan and the Families Plan should be enacted. They would stimulate an economy that hasn’t fully regained its footing, modernize digital and traditional infrastructure and shore up the livelihoods of struggling Americans who can become more independent, productive workers. They would also expand and solidify the foundation of U.S. prosperity — an empowered and well-trained population of middle-class consumers.

Infrastructure spending is the core of the Jobs Plan. It envisions outlays on highways, bridges, the power grid, high-speed broadband, airports, renewable energy, manufacturing, mass transit, smarter commercial and residential buildings and more. China, which has built the first economic competitor to the U.S. in the modern era on the back of such spending, forks over about 8% of its annual gross domestic product on infrastructure. The U.S. spends only 2.4% of GDP on infrastructure.

“The $20 trillion U.S. economy relies on a vast network of infrastructure from roads and bridges to freight rail and ports to electrical grids and internet provision,” the Council on Foreign Relations noted in a recent report. “But the systems currently in place were built decades ago, and economists say that delays and rising maintenance costs are holding economic performance back.”

Infrastructure spending was at the heart of the post-World War II economic boom in the U.S., and a bipartisan coalition that pushed Dwight D. Eisenhower’s legislation along understood that. While it is difficult to quantify public sector returns, analysts have pointed to benefits that span generations, increase productivity, create jobs and stabilize the economy. Private-sector investments in infrastructure have also outperformed stocks and bonds since at least the mid-1970s.

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