On Wednesday, January 20, the inauguration of the 46th US President, Democrat Joseph Biden, will take place in Washington.

According to experts, in the early stages of government, the new head of the White House will largely continue the economic policy of Donald Trump and focus on combating the consequences of the coronavirus pandemic and leading the country out of the crisis.

The president-elect has already announced additional economic stimulus measures totaling $ 1.9 trillion.

Of these funds, the Biden administration plans to use about $ 1 trillion to help the population.

Note that as a result of the COVID-19 pandemic and forced quarantine restrictions in 2020, the US economy contracted by 4.3%.

This is the estimate given by the International Monetary Fund.

The country's unemployment rate jumped from 3.5% to 6.7%.

At the same time, during the year, the indicator rose to double-digit values ​​and for the first time since the Great Depression approached 15%.

This is evidenced by data from the Federal Reserve Bank of St. Louis.

As the deputy director of the Institute of the USA and Canada of the Russian Academy of Sciences Viktor Supyan told RT, in 2020 the American authorities allocated about $ 4 trillion to support the economy.

A further increase in this amount will be accompanied by an increase in the national debt and budget deficit.

“According to preliminary data, the budget deficit at the end of 2020 amounted to 18% of GDP.

This is a colossal and unprecedented figure in recent US history.

The question is where to get the money for new incentives?

Probably, the FRS will continue to buy out bonds on the market and throw new dollars into the economy, ”Supyan said.

In 2020, the Federal Reserve began printing dollars in unlimited quantities and pumping money into the country's financial system by purchasing government bonds.

According to experts, an increase in the money supply in the economy should help increase the rate of GDP growth.

At the same time, the Fed's actions led to a record weakening of the American currency in the international market for two years.

  • © REUTERS / Dado Ruvic / Illustration

Donald Trump himself sought to weaken the dollar during his presidency, as such a policy created export advantages for American producers.

As expected, under Joe Biden, the US government will, on the contrary, advocate strengthening its national currency.

However, the experts consider the achievement of such a goal problematic.

“US Treasury candidate Janet Yellen will pursue a strong dollar policy.

This was her strong point when she was still the head of the Fed.

However, it will be very difficult to implement such a policy, because the support of the population and business in 2020 and 2021 has already reached a very large size, and the volume of the US national debt has exceeded the size of GDP, ”added Victor Supyan.

After the pandemic

As experts believe, after the weakening of the situation associated with the coronavirus pandemic, Joe Biden's economic policy will be radically different from the actions of Donald Trump.

Moreover, the new head of the White House may cancel a number of initiatives of his predecessor.

“The president is expected to work on the mistakes of the previous administration.

In particular, migration restrictions may be eased.

This will to a greater extent help the restoration of small and medium-sized businesses, which, under the previous administration of the White House, had a reduced base for hiring cheap workers in the form of migrants, ”said Yevgeny Mironyuk, an analyst with Finance Finance Investment Company.

At the same time, Joe Biden intends to remove Trump's tax breaks for businesses, which could put serious pressure on companies and entrepreneurs.

This point of view in a conversation with RT was expressed by Lev Sokolshchik, a researcher at the Center for Comprehensive European and International Studies at the Faculty of World Economy and International Affairs, National Research University Higher School of Economics.

Earlier, Joe Biden called for an increase in the income tax rate for citizens with high earnings - from 37 to 39.6%, as well as corporate income tax - from 21 to 28%.

In addition, Vice President-elect Kamala Harris has proposed expanding real estate taxes and capital gains when investing in securities.

  • Kamala Harris and Joe Biden

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“Initiatives like these often have a negative impact on economic dynamics.

Business seeks to minimize costs and bring production and business processes to more comfortable jurisdictions.

Households are deprived of additional financial resources that they could have spent on purchasing goods and services, ”explained Lev Sokolshchik.

According to experts, as part of his economic policy, Joe Biden intends to pay special attention to the fight against poverty in the United States.

Thus, the elected head of state announced an increase in the minimum wage in the country from $ 7.25 to $ 15 per hour by 2025.

This initiative may have an ambiguous effect on the economy, experts say.

As analysts from the US Congressional Budget Office have calculated, more than doubling the minimum wage over the next four years will reduce the number of poor Americans by 1.3 million.

At the same time, businesses will have to cut costs, as a result of which the number of unemployed in the country will increase by the same 1.3 million.

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Joe Biden is also expected to continue Barack Obama's health care reforms, which Donald Trump has actively opposed.

Recall that the Republican President tried to repeal the Patient Protection and Affordable Care Act, also called Obamacare.

The Trump administration was unhappy with this legal act, as it allegedly increases the burden on the economy.

“Health issues in the United States are now especially relevant, as the country is among the leaders in the anti-ranking for morbidity and mortality from COVID-19.

Biden proposes expanding Obamacare subsidies for health insurance, increasing health care coverage to 97% of the population, lowering the age for old-age care to 60, and introducing government price controls on prescription drugs.

By the way, now almost 30 million people in the United States do not have health insurance, ”said Lev Sokolschik.

External course

With the coming of Joe Biden to power, experts interviewed by RT expect the state's role in the US economy to increase, as well as a decrease in protectionism.

So, under the new head of the White House, the States can end the policy of trade wars launched by Trump.

Recall that he actively advocated the return of American companies to the United States from abroad, and also tried to stimulate domestic production and achieve a reduction in the trade deficit.

As part of this course, Trump imposed protective import duties on foreign goods, primarily Chinese and European.

“In the external economic sphere, Biden will seek a warmer cooperation with traditional US allies.

First of all, we are talking about Canada and Europe, with which Trump managed to spoil relations quite a lot.

Meanwhile, the United States will continue to pursue a policy of containment with regard to China, although not as tough as before, ”said Viktor Supyan.

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The expert clarified that the containment of the PRC will remain one of the main strategic lines of the American authorities in the coming years.

According to him, the United States will continue to strive to prevent the transfer of its latest technologies to China.

In this way, Washington will try to avoid Beijing's intellectual and economic superiority.

“It is clear that if in previous years there was fruitful cooperation, and China became the" assembly shop "of the States, now this" assembly shop "has turned into a very serious and dangerous competitor, primarily in the scientific and technical field.

The fact that some measures will be taken to contain China is undoubtedly, but whether it will have the character of trade wars is a big question, "Supyan added.

Nevertheless, in the event of another round of tensions in relations with the United States, the PRC authorities may again weaken the yuan exchange rate, the expert said.

This policy helps to limit the effect of trade duties on Chinese exporters.

Moreover, at the moment, Beijing is still one of the largest holders of the US national debt and can use this as a counter-lever of pressure on Washington.

This opinion was shared with RT by the head of the laboratory for the analysis of institutions and financial markets at the Institute for Applied Economic Research, RANEPA, Alexander Abramov.

“In general, China will strive to mitigate the existing contradictions as much as possible, but in which case it could theoretically begin to withdraw its investments from the US national debt.

However, this will be a very tough move that will ultimately hit both economies.

Therefore, the countries will try to ensure that the confrontation proceeds in peaceful forms, ”Abramov explained.

Energy renewal

Unlike his predecessor, Joe Biden will pay more attention to environmental issues, experts say.

In particular, economists do not exclude that the United States will return to the Paris climate agreement, from which it left at the initiative of Trump.

“Donald Trump was more of a supporter of traditional energy industries, namely hydrocarbons.

Biden will focus on green technology.

In this area, the United States is lagging behind many European countries today, therefore, it is likely that certain preferences will be given to non-traditional energy, ”explained Viktor Supyan.

At the same time, Joe Biden's policies in the long term will negatively affect the traditional sectors of the American energy.

This opinion was expressed in a conversation with RT by an expert from BCS Investment World, Albert Koroev.

"Biden's initiatives will mainly affect oil producers and, accordingly, related industries related to drilling and transportation of energy raw materials," the expert explained.

In particular, the new head of the White House may stop issuing permits for the development of shale deposits in federal lands.

In addition, we can talk about stricter regulation of associated petroleum gas (APG) during production.

This risks turning into the closure of a number of wells of enterprises that are already going through difficult times, experts say.

  • © REUTERS / Carlos Barria

Note that in 2020, against the backdrop of a sharp drop in quotations, shale oil production in the United States became unprofitable.

As a result, many US producers of raw materials faced bankruptcy and were forced to leave the market.

As prices recover above $ 50 a barrel, shale oil production has become profitable again, but companies are in no hurry to increase production.

As follows from the report of the International Energy Agency (IEA), at the moment oil shale enterprises direct their profits not to the creation of new industries, but to pay off debts and pay funds to investors.

This state of affairs may lead to the fact that in the near future the United States will somewhat cede its share of the world oil market to the countries participating in the OPEC + deal, including Russia.