The Biden administration and Democrats are working overtime to promote the American Rescue Plan. Biden, Harris, and other top Democrats laud this package as necessary for providing coronavirus relief to the families in need of it; they also claim the American Rescue Plan will help the U.S. economy get back on track.
There are some issues, though. While Democrats profess to be the fighters of the working class and the poor, their policies don’t bear this out. For instance, Biden promised to send “out the door” $2,000 direct payments to Americans; yet, his stimulus package only contains $1,400 checks.
Biden wants the people of the country to view the American Rescue Plan as the end-all, but reality doesn’t bear this out. In fact, Breitbart News reports that a leading liberal economist is sounding the alarm on the Democrat president’s relief package.
The Truth About Biden’s American Rescue Plan
Olivier Blanchard, a well-established and liberal economist, warns that Biden’s coronavirus relief package, if passed, will trigger a $900 billion shortfall and a multiplier effect caused by spending. Blanchard additionally maintains that as the U.S. economy gradually reopens, spending surges will trigger price increases, hence inflation.
Let’s look at the numbers. Size does matter and can be assessed.
If the economy had continued on its pre-covid trend, it would be about 900 billion dollars larger. This suggests an output gap of less than 900 billion as some sectors will not operate at full speed for some time.— Olivier Blanchard (@ojblanchard1) February 6, 2021
The U.S. economy that Americans lived through during the 1960s speaks very clearly to the dangers of inflation. Based on what Blanchard is saying, Biden’s American Rescue Plan could very well plunge this nation into a recession if Congress approves it. This is especially troubling since the Democrat Party is currently in control of both congressional bodies.
The Economy Under the Biden Administration
Biden’s refusal to end his attack against energy jobs is already hurting the economy and devastating American jobs. His support for increasing the federal minimum wage is also documented as a measure that will put millions of business owners and their staffers out of work.
Based on the findings from the aforementioned economist, Biden’s American Rescue Plan could place the U.S. economy on life support. Democrats have already taken to social media to dismantle and challenge the assertions of Blanchard, but none of these critics are economic specialists.
How this number translates into an increase in demand this year depends on multipliers. If the average multiplier is 1 (which I think of as a conservative assumption), this implies that demand would increase by 4 times the output gap.
— Olivier Blanchard (@ojblanchard1) February 6, 2021
Given that Blanchard is a known liberal, rather than a conservative, the left will be hard-pressed to credibly assert that his findings are politically-motivated or biased.
What do you think about this leading, liberal economist’s take on the American Rescue Plan? Let us know your thoughts, concerns, and viewpoints down below in the comments section.
