During the 2016 elections, Donald Trump bragged about how his policies would enormously benefit the US economy by decreasing the unemployment rate and boosting the GDP growth rate.
However, Biden has not made such huge promises concerning his economic policies. His manifesto includes more spending on infrastructure and clean energy, as well as education, healthcare, and social safety net.
Biden has also proposed a rise in the personal income taxes that will largely target the wealthy. Corporate profit taxes will also be increased.
Biden has also made a promise to decarbonize the economy of the country in 30 years. This means that the industries responsible for polluting the environment will be heavily regulated. He will also undo Trump’s rigid policies regarding immigration.
Prices of drugs will also be regulated. Moreover, he plans to increase the federal minimum wage two times. The protectionist trade wars with China, lasting for the previous four years, will also come to an end.
According to analysts from Berenberg, these tax and spending policies, as well as regulations, are the most extensive in US history.
However, Biden’s policies will only be implemented to their full potential if the Democrats also gain control of the House of Representatives and win a majority in the Senate.
Otherwise, Republicans may stand in the implementation of many policies. According to analysts from Moody’s project, if Biden becomes successful in executing his plans, the GDP will grow 4.2% each year until 2024.
Analysts explain that this would mean a considerable improvement in the current performance of the GDP.
Oxford Economics agrees with this forecast, stating that according to their Global Economic Model, GDP growth rate would increase by 2% to 5% whereas Trump’s projections depict the growth of less than 2%.
Unemployment rates will also decrease to 5.4% in the next four years under Biden’s presidency. Even though he has proposed high corporate taxes, the projections also show that this will result in higher corporate profits.
The analysts also believe that the US economy has been hard hit by the pandemic and to carry it out of the woods, Biden is a better option because of his expansive fiscal policies.
However, if the Democrats are not able to win the Senate, this will cause hurdles because of opposition from the Republicans and the policies will not have their full positive effect on the economy.