President Elect Joe Biden’s Plans For The US Economy
The new US President, Joe Biden, will have a big job to restart the stalled American economy, but has already voiced some plans he intends to implement from day one of his leadership. These include:
Reinstatement Of The Defense Production Act
The Defense Production Act (DFA) will force US businesses to make whatever is required to tackle the coronavirus pandemic.
The DFA is based on forcing big business to come in to aid the country at times of need and is a hangover from wartime legislation.
Biden also plans to increase levels of unemployment insurance and help out struggling US citizens
These include increasing the levels of unemployment insurance and sending more direct payments to citizens in need. This will include cancelling some student loans and also offering aid to smaller businesses.
Biden also plans to crack down on big tech companies and tax avoidance and will lead a push to claw back taxes and income given by President Trump to some of the country’s corporate giants.
This will include raising corporate tax rates from 21% to 28%, and penalising businesses with overseas workers. The biggest earners in the US will also face higher taxes and increased individual income rates.
Biden will need Republican support for any stimulus plans he makes, and at this moment the US deficit stands at $3.3tn which is its highest level since World War 2.
Clean Energy And A Green Deal
Biden has also pledged to help stimulate the clean energy sector as he appreciates that climate change is “the number one issue facing humanity” at this moment in time.
He intends to set the wheels in motion for a 100% clean energy economy by the year 2035 and hit net zero emissions by the year 2050 at the latest.
Global leaders will be watching with bated breath as this could be a real opportunity for the US to rejoin the Paris Accord on Climate Change.
The US has been withdrawing from its global centre stage role when it comes to world initiatives, such as climate change, but the new US president will have a tough job persuading his colleagues to reinstate funding and sign up to agreements again.
No matter, it’s certainly going to be a volatile time for world markets as the financial world gets to grip with this switch in leadership and policies.
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