The White House is putting government at the heart of the post-Covid economic bounce-back. The implications affect us all
During the pandemic, the world has been dazzled by the huge sums that governments have been willing to spend propping up their economies. Britain has spent £407bn in support measures, more than 40% of normal government spending in an entire non-Covid year. The European Union has launched an emergency new €750bn (£645bn) coronavirus recovery fund to help its 27 member states. Now the United States has topped them all, passing the $1.9tn (£1.4tn) stimulus package that President Biden signed this week. This takes pandemic-related spending by the US to around $6tn (£4.3tn) – more than it spent fighting the second world war.
The Biden package is massive. It puts up to $1,400 into the pockets of low-paid workers and members of their families. It extends a wide range of welfare payments into the autumn, boosts parental tax credits, and maintains special unemployment reliefs and health care subsidies. Much of the support is unconditional. The poorest fifth of US households will see their incomes rise by 20%. Child poverty may be cut in half. Payments began to arrive over the weekend.