Sometimes the president calls his next proposed spending blowout an “infrastructure” bill and sometimes he calls it a “jobs” program. The Biden Plan could end up destroying many of both. A new analysis According to the President of the University of Pennsylvania’s Wharton School’s American Jobs Plan, the Biden program would reduce US economic growth, capital stock, wages and hours worked over the next decade. But there’s something the plan would add – the federal debt. In short, it is a disaster for US investors, workers, and taxpayers.
The Wharton crew doesn’t think the results would get much better in the years to come, with one major exception. The analysis sees positive effects on the federal budget after 2031, as the plan’s spending is expected to end while the new taxes are set to apply forever. But how often are massive Washington subsidy programs not renewed by Congress?
Regardless of whether or not Washington is expected to suddenly adopt spending discipline in 2031, the Wharton projection suggests that the private sector will continue to suffer. The authors note that tax rules discourage investment and therefore offer the following forecast:
The decline in capital makes the workforce less productive, despite the increase in productivity due to the larger infrastructure, and lowers hourly wages by 0.7 percent in 2031 and 0.8 percent in 2050. Overall, GDP will be 0.9 percent lower in 2031 and 0.8 percent lower in 2050.
This could be the end of the short and bizarre argument that the Biden waste of spending would be a job maker. The problem appears to have started with a suspect last week claim from the President:
Independent analysis shows that if we pass this plan, the economy will create 19 million jobs – good jobs, blue-collar jobs, well-paying jobs.
The boast was very misleading because even when you buy The analysis The source cited by the White House – a report by pro-government economist Mark Zandi and a colleague at Moody’s Analytics – also found in their report that if the plan were not passed and Mr Biden just went, more than 16 million jobs would be created Economy alone.