The passage of the Biden administration’s $1.9 trn stimulus bill marks a watershed in the global pandemic. The sheer scale of the intervention represents a decisive departure from the miserliness of the Clinton and Obama presidencies. Moreover, unlike deficit-busting Republican budgets since the 1980s, Joe Biden’s stimulus is heavily focused not on tax cuts for the richest but handouts for the lowest income groups, and is forecast to raise 13 million Americans out of poverty.
This is a sharply redistributive programme, comparable to Lyndon Johnson’s Great Society or Franklin D Roosevelt’s New Deal. It paves the way for a coalition of political support for macroeconomic policy which, instead of defaulting to government penny-pinching and monetary tightening, offers broad support to ordinary Americans.
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