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Trump is history. America’s future is now in Biden’s hands

Robert Reich, professor of public policy | February 14, 2021

While most of official Washington has been focused on the Senate impeachment trial, another part of Washington is preparing the most far-ranging changes in American social policy in a generation.Joe biden speaks at a lecturn

Congress is moving ahead with Joe Biden’s American Rescue Plan, which expands healthcare and unemployment benefits and contains one of the most ambitious efforts to reduce child poverty since the New Deal. Right behind it is Biden’s plan for infrastructure and jobs.

The juxtaposition of Trump’s impeachment trial and Biden’s ambitious plans is no coincidence.

Trump has left Republicans badly fractured and on the defensive. The party is imploding. Since the Capitol attack on Jan.6, growing numbers of voters have deserted it. State and county committees are becoming wackier by the day. Big business no longer has a home in the crackpot GOP.

This political void is allowing Biden and the Democrats, who control the White House and both houses of Congress, to respond boldly to the largest social and economic crisis since the Great Depression.

Importantly, they are now free to disregard conservative canards that have hobbled America’s ability to respond to public needs ever since Ronald Reagan convinced the nation big government was the problem.

The first is the supposed omnipresent danger of inflation and the accompanying worry that public spending can easily overheat the economy.

Rubbish. Inflation hasn’t reared its head in years, not even during the roaring job market of 2018 and 2019. “Overheating” may no longer even be a problem for globalized, high-tech economies whose goods and services are so easily replaceable.

Biden’s ambitious plans are worth the small risk, in any event. If you hadn’t noticed, the American economy is becoming more unequal by the day. Bringing it to a boil may be the only way to lift the wages of the bottom half. The hope is that record low interest rates and vast public spending generate enough demand that employers will need to raise wages to find the workers they need.

A few Democratic economists who should know better are sounding the false alarm about inflation, but Biden is wisely ignoring them. So should Democrats in Congress.

Another conservative bromide is that a larger national debt crowds out private investment and slows growth. This view hamstrung the Clinton and Obama administrations as deficit hawks warned against public spending unaccompanied by tax increases to pay for it. (I still have some old injuries inflicted by those hawks.)

Fortunately, Biden isn’t buying this, either.

Four decades of chronic underemployment and stagnant wages have shown how important public spending is for sustained growth. Not incidentally, growth reduces the debt as a share of the overall economy. The real danger is the opposite: fiscal austerity shrinks economies and causes national debts to grow in proportion.

The third canard is that generous safety nets discourage work.

Democratic presidents from Franklin D Roosevelt to Lyndon Johnson sought to alleviate poverty and economic insecurity with broad-based relief. But after Reagan tied public assistance to racism – deriding single-mother “welfare queens” – conservatives began demanding stringent work requirements so that only the “truly deserving” received help. Bill Clinton and Barack Obama acquiesced to this nonsense.

Not Biden. His proposal would not only expand jobless benefits but also provide assistance to parents who are not working, thereby extending relief to 27 million children, including about half of all Black and Latino children. Republican senator Mitt Romney of Utah has put forward a similar plan.

This is just common sense. Tens of millions are hurting. A record number of American children are impoverished, according to the most recent census data.

The pandemic has also caused a large number of women to drop out of the labor force in order to care for children. With financial help, some will be able to pay for childcare and move back into paid work. After Canada enacted a national child allowance in 2006, employment rates for mothers increased. A decade later, when Canada increased its annual child allowance, its economy added jobs.

It’s still unclear exactly what form Biden’s final plans will take as they work their way through Congress. He has razor-thin majorities in both chambers. In addition, most of his proposals are designed for the current emergency; they would need to be made permanent.

But the stars are now better aligned for fundamental reform than they have been since Reagan.

It’s no small irony that a half-century after Reagan persuaded Americans big government was the problem, Trump’s demise is finally liberating America from Reaganism – and letting the richest nation on earth give its people the social support they desperately need.

Cross-posted from The Guardian

Comments to “Trump is history. America’s future is now in Biden’s hands

  1. In the 1980s, as a UK resident, I enjoyed many very strong business connections with financially successful US residents
    The general opinion I heard was that Reagan did not have the education to understand the motives of the people who had his ear and who wanted the government to de-regulate the traditional financial controls and then, when Thatcher came to power in UK, she and Reagan did, in tandem yet each within their own economical structure, introduce de-regulation of the banks
    It was the impact of this de-regulation of the banking industry that has led to what facilitated Trump’s rhetoric
    Whatever Biden does he can not undo what Reagan and Thatcher did. Following the crisis from 9/11, and relating to matters connected with that, some essential financial reporting requirements were implemented – this does not, and can not, shut the door
    Our Worldwide collective values have accentuated a near universal focus on the frivolous aspects of entertainment as against personal attainment. Personal attainment facilitates personal self sufficiency
    There has developed an alarmingly common mindset in the West for people to insist they be provided for
    Without a radical change to this mindset so that there is a widespread search for self sufficiency, the now clearly obvious economic divides will only get wider in which case no government intervention can ensure peaceful co-existence between these so very deeply entrenched factions

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