During the campaign and after his election, Biden has always emphasized that the restoration of economic growth is his priority in governing. Now that he has been in power for 100 days, he can make an initial assessment of “Biden Economics.”
From the perspective of economic policy, Biden’s economic policy strongly supports economic recovery. On the 50th day of his coming to power, he proposed and successfully passed the new crown epidemic relief bill with a total amount of 1.9 trillion US dollars, and subsequently launched the “U.S. Employment Plan” with a total amount of more than 2 trillion US dollars to be approved by Congress. According to economic data, Biden has been in power for more than three months, and the unemployment rate has continued to drop below 6%. The economic growth rate in the first quarter is expected to reach 10%. The stock market has performed well. The Dow Jones Industrial Index has repeatedly increased from 30,930 on January 19. A record high climbed to 33985 points on April 27. Of course, after a hundred days, Biden’s economics also contains huge problems. The most serious of these is the continuous expansion of the debt scale of the US federal government in order to stimulate economic growth. In just one hundred days, the US federal fiscal deficit exceeded $1.4 trillion.
Compared with Trump and other predecessors, within a hundred days, Biden’s economics fully embodies Biden’s economic thoughts and is branded with distinctive Biden characteristics. These characteristics can be summarized as the four pillars of Biden’s economics, which will profoundly shape the development direction of the US economy for a long period of time in the future.
One of the pillars is the economics of the epidemic. Biden is well aware that epidemic control and economic development are highly related. If, like Trump, only stimulates the economy and does not pay attention to controlling the epidemic, economic growth will only be a mirage in the end. For this reason, Biden regards the control of the epidemic as a prerequisite for economic development. For Biden, speeding up vaccination is the most effective means of controlling the epidemic. Biden did not hesitate to be criticized for “vaccine nationalism”, hoarding as many vaccines as possible in the country, and at the same time calling on the American people to vaccinate as soon as possible. Up to now, the American people have received more than 220 million doses of vaccine. Thanks to the rapid progress of vaccine injections, the overall situation in the United States has been steadily decreasing. The better performance of the epidemic prevention and control will help eliminate the biggest uncertainty in the development of the US economy, increase the confidence of the American people in economic development, expand consumption, and promote the strong recovery of the US economy. From the perspective of restoring global economic leadership, if the United States is ahead of other major countries in controlling the epidemic, the U.S. economy will gain a greater competitive advantage.
The second pillar is alliance economics. Starting from the current realities of US economic development and diplomatic goals, Biden returned to multilateralism and attached great importance to the key role of alliances in reshaping the US economic system. Therefore, he deliberately deepened coordination with allies in the formulation of economic policies. The starting point of alliance economics is the relative decline of the United States in the global economy, so alliances must be used to maintain American economic influence. Its core is to coordinate the economic factors between the United States and its allies, strengthen economic policy coordination with allies, consolidate the superimposed advantages of the United States and its allies in economic power, and further expand its rule-making power in the global economic system. Judging from the economic policies of the Biden administration, alliance economics mainly manifests itself in the strengthening of communication with allies on economic and trade rules, the relative relaxation of allies in the review of supply chain security, and the consensus with allies on, for example, global multinational corporation income tax collection. In order to expand the role of alliance economics, the United States has also highlighted the importance of economic cooperation in new innovative mechanisms such as the United States, Japan, India, and Australia. In order to better attract allies to identify with the economics of alliances, Biden also changed the Trump administration’s “America First” concept, and appropriately responded to allies’ demands for the United States in a number of economic policies. In general, although the economics of the Biden alliance has not yet reached the standard of coordination between the United States and its allies during the Cold War, it has made great progress compared to the Trump administration.
The third pillar is deficit economics. From a financial point of view, Biden’s term may be the most difficult financial situation in the United States after the end of the Cold War or even after the end of World War II. The super-large-scale bailout bill and infrastructure plan will help to consolidate the foundation of US economic growth in the long run, but it will lead to a huge increase in government spending in the short term. Even if the tax plan that is under consideration can be passed, it will be difficult to match the huge expenditure in time, resulting in huge debts during the Biden administration. Biden’s deficit economics is also in line with the Democrats’ concept of “big government”. The government must play a greater role in national economic activities through tax increases and other means, and promote economic development through “tangible hands”. But the question is, in the face of the existing and newly added huge deficits and debts, has Biden prepared an exit strategy to reduce debt? If Biden borrows arbitrarily for short-term economic growth goals, and eventually uses the US financial hegemony to technically reckless, Biden’s deficit economics will become a gray rhino event in the history of the world economy.
The fourth pillar is the economics of climate change. Biden is extremely concerned about global climate change. He views global climate change not only from an environmental perspective, but also from an economic perspective. Biden regards tackling climate change as an important opportunity to promote the growth of the US economy. He focused on combining the formulation of economic policies with the response to climate change to create the economics of climate change. Biden plans to invest trillions of dollars in climate change in infrastructure construction, scientific and technological R&D investment, taxation support, and industrial development, in an effort to create a multi-trillion-scale market and create millions of jobs. It should be said that the economics of climate change is the highlight of Biden’s economics. If Biden can achieve the mutual promotion of environmental protection goals and economic growth goals in the economic policy of climate change through top-level policy design and specific policy promotion, the economics of climate change will become an important part of its policy heritage.
But just as before, the previous American presidents were full of ambitions and formulated various grand plans when they took office. However, in the face of America’s increasingly polarizing political reality, increasingly turbulent social environment, and declining international status, there are serious uncertainties about whether the plan can achieve the expected goals, or even whether it can be implemented as desired. We still need to continue to observe.