Biden’s Massive $6T Budget To Cut Economic Growth


FILE - This May 4, 2021, photo shows the Treasury Building in Washington. The U.S. budget deficit hit a record $2.06 trillion through the first eight months of this budget year as coronavirus relief programs drove spending to all-time highs. The shortfall this year is 9.7% higher than the $1.88 trillion deficit run up over the same period a year ago, the Treasury Department said Wednesday, June 9, 2021 in its monthly budget report. (AP Photo/Patrick Semansky, file)

FILE – This May 4, 2021, photo shows the Treasury Building in Washington. The U.S. budget deficit hit a record $2.06 trillion through the first eight months of this budget year as coronavirus relief programs drove spending to all-time highs. (AP Photo/Patrick Semansky, file)


A group of analysts fear Joe Biden’s $6 trillion proposed budget will have massive consequences on the nation’s long term economic success. In fact, researchers at the Tax Foundation, a nonprofit seeking to inform smarter tax policy at all levels of government, reported Wednesday that Biden’s proposed budget will actually cut economic growth.

The foundation concluded the budget will cut long-term economic growth by 1 percent in the next decade and will eliminate 165,000 full time jobs. While the non-partisan report claims long term GDP will increase by 0.3 percent, presumably due to enhanced public infrastructure, the “positive economic effect is entirely offset by the increase in corporate and individual taxation.”

The increase in taxes are expected to result in less work and investment, which combined with increased spending under the Biden administration’s budget will reduce GDP by nearly 1 percent and also leads to lower wages.

The report highlights increasing the corporate tax from 21 percent to 28 percent will have a severe consequence on the nation’s gross domestic product. While increasing taxes imposes risks on the nation’s economy, many fear lavish spending programs will also cause harm.

In a PBS interview, economist and former Treasury Secretary Lawrence Summers highlighted an alarming reality. Heavy government spending can create inflation and cause collateral damage on the economy.

“A recession’s not the main risk; the main risk is that our economy’s going to overheat and then once it overheats, it’s going to be hard to put out the fire without doing a lot of damage and causing a lot of problems,” Summers explained. “And so, I’d like to see us shift towards a policy concern.”

In the meantime, Federal Reserve officials project that interest rates will hike earlier than expected in 2023, which will be a result of inflation caused by government spending.

Comments

Popular posts from this blog

Dr. Vladimir Zelenko has now treated 699 coronavirus patients with 100% success

ORIGIN OF THE AKAN

GARDEN OF EDEN FOUND IN WEST AFRICA

STEP FOUR: LEARN TO PACKAGE YOURSELF

FIVE WAYS A WIFE CAN REST HER HUSBAND ON HER

THE HISTORY AND ORIGIN OF THE ZULU PEOPLE

BRIEF HISTORY OF NKALAHA.

MYSTERY OF IGBO COSMOLOGY

THE ORIGIN AND HISTORY OF UDI by Onyeji Nnaji

THE ORIGIN AND HISTORY OF NSUKKA by Onyeji Nnaji