Printing money on a large scale and letting the world pay the bill? Biden announced a package of investment plans to repair and upgrade "collapsed" infrastructure
[Global Times reporter Lin Ri, Li Xue, Chen Xin, Liu Yupeng] On March 31, local time, US President Biden announced the "U.S. Employment Program" with a total value of 2.25 trillion US dollars.
This investment package is equivalent to planning to spend 1% of the US GDP each year for the next 8 years to repair and upgrade the "collapsing" infrastructure, and to ensure the United States' leadership in key technology areas.
On that day, Biden used a lot of grand rhetoric and expressions to express his ambition in his speech, saying that this would be "the moment when the United States wins the future."
Among them, he particularly emphasized that this plan will enable the United States to win the global competition with China.
This is not only Biden's real sense of anxiety—his assistant told the US media that Biden is eager to prove that democratic capitalism is effective, and it is also his attempt to play the "China card" to gain bipartisan support.
Republicans have opposed Biden's proposal for the first time, and have shown determination to prepare for a long-term quarrel, especially vehemently criticized Biden's plan to raise money by taxing companies.
The thinking within the Democratic Party is also not unified.
The BBC commented that in the United States, even non-controversial and highly publicly supported infrastructure improvement plans will be shrouded in the smoke of partisan politics.
Compared with China, this should be the real threat to Biden's political ambitions.
Republican Party: If you increase taxes, the plan is unlikely to pass
Biden announced the "U.S. Employment Program" in Pittsburgh, Pennsylvania.
The choice of location is quite meaningful.
Two years ago, he started the presidential campaign here.
At the same time, the city, once famous for the steel mills that promoted the rise of American industry, has emerged from the shadow of decline.
When he stood in Pittsburgh again on March 31, Biden declared that he would create "the most powerful, resilient and innovative economy in the world."
The Associated Press said that Biden promised to achieve results on the same scale as the "Roosevelt New Deal" and the "Great Society" plan that shaped the 20th century.
In his description, "50 years from now, when people look back, they will say that this is the moment when the United States wins the future."
According to the details released by the White House, the plan includes investing 621 billion US dollars to build and improve the transportation infrastructure of the United States, including renovating 32,000 kilometers of roads, repairing 10,000 bridges in the worst condition, upgrading and rebuilding airports, ports and other facilities. ; US$650 billion is spent on improving the infrastructure of American homes, repairing old schools, updating power grids and drinking water pipelines, etc.; US$400 billion is spent on the care of the elderly and the disabled; US$580 billion is spent on R&D, manufacturing and training expenditures, of which 50 billion US dollars will be invested in the domestic semiconductor manufacturing industry.
"Our infrastructure is collapsing." Biden said in his speech, this is not a piecemeal plan, completely different from what has been seen or done in the past, "very bold."
CNN said that Biden boasted that his infrastructure plan was "the only investment in the United States in a generation" and was the largest employment investment in the United States since World War II.
He admits that the plan is "very bold", but thinks it can be done.
"Voice of America" commented that the infrastructure plan may become one of the most important political legacy of the Biden administration.
But two of Biden's predecessors, Obama and Trump, have made major promises on this issue, but they have failed to fulfill them.
Where does the money come from for this plan that cost about 2.3 trillion US dollars in 8 years?
"The Wall Street Journal" reported that the Biden administration put forward plans on how to pay for this expenditure while launching the "U.S. Employment Program," that is, the "U.S. Manufacturing Tax Program."
The plan raises the US corporate tax rate from the current 21% to 28%, and includes a series of tax reform measures, including cracking down on corporate tax avoidance through loopholes in the tax system, and increasing the tax burden of multinational companies on overseas investments and profits.
Biden said that a single tax on global income could raise $1 trillion in the next 15 years.
The Associated Press commented that this tax reform plan means that Trump's landmark achievement-a substantial tax cut plan for companies will be wiped out.
"This is the exact opposite of the United States first, it is to put the United States last!" Trump issued a statement on the 31st, condemning Biden's plan will be one of the greatest self-economic harm in the history of the United States.
Senate Republican leader McConnell called the plan a "Trojan horse" that contained more borrowing and large-scale tax increases.
He said that if there is a substantial increase in taxes and trillions of dollars in national debt, the plan is unlikely to pass.
U.S. business groups have always supported bold investment in infrastructure, but strongly opposed tax increases.
Brandley, executive vice president of the U.S. Chamber of Commerce, the largest trade organization in the United States, said the Chamber of Commerce agrees with Biden's sense of urgency about infrastructure, but his plan "is dangerously wrong."
The Associated Press commented that Biden thinks he is different from Obama and Trump and can lead the United States into the future, but this journey is unlikely to be smooth sailing.
Some plans are tailored to "Win China"
Biden's "U.S. Jobs Program" specifically mentions competition with China in several places.
"Voice of America" reported that when talking about the electric vehicle industry, the plan said that the plug-in electric vehicle market in the United States is only one-third of China's, and Biden proposed a historic investment of US$174 billion in the electric vehicle market.
When talking about investment in scientific research, the plan stated that in the past 25 years, the United States was one of the few major economies where public investment in R&D as a percentage of GDP declined, while China is investing heavily in R&D.
Biden called for an investment of 180 billion U.S. dollars to enhance the U.S. leadership in key technologies such as artificial intelligence, biotechnology, communications technology, and clean energy.
The BBC reported that Biden said these investments are necessary to maintain the growth of the U.S. economy and its competitiveness with other countries, especially China.
The White House stated more bluntly in the statement after Biden's speech that the plan will unite and mobilize the entire country to deal with "the great challenge of our time: the climate change crisis and China's ambitions."
The "Sydney Morning Herald" commented that, according to Biden, the 2 trillion plan will enable the United States to defeat China economically and make the United States a global leader in clean energy technology.
Biden even uses the choice between "democracy" and "authoritarian" to define this kind of competition.
The New York Times reported that Biden’s aides said that Biden felt anxious about competition and wanted to prove that democratic capitalism is feasible.
The newspaper commented that this view is reminiscent of the Cold War.
This time, China plays the role of a core opponent.
But in fact, Biden's plan is tantamount to acknowledging that the Chinese government supports companies such as Huawei and has invested billions of dollars in key technologies such as artificial intelligence that "is attracting imitators."
Wu Xinbo, Dean of the Institute of International Studies at Fudan University, told the Global Times reporter on April 1 that the United States wants to improve its infrastructure, which is actually an important opportunity for Sino-US cooperation.
Many Chinese private enterprises are very enthusiastic about investing in this area, and China's construction capacity and technical level in the field of infrastructure construction are also world-class.
But the problem lies in the current irrational China environment in the United States, and some politicians have become hysterical against China.
Biden wants to use to exaggerate the competition with China to gain bipartisan support.
In his speech in Pittsburgh, he stated that "China and other countries are eating our lunch, so there is no reason not to engage in bipartisan cooperation again."
But Trump on Wednesday accused Biden’s aggressive tax increase plan as a huge gift to China and many other countries. It will eventually send U.S. companies to places including China, allowing the U.S. to "lost the economic war with China again." ".
Bloomberg reported that Republicans in Congress said they were willing to work with Senate Majority Leader Schumer to counter China's economic influence, but they were on guard.
Sources said that Biden’s statement may complicate efforts to win Republican support because it intensifies concerns that the plan is that the Democratic Party disguised its domestic wish list as "competing with China."
Want to print money on a large scale and let the world pay the bill?
The "U.S. Jobs Program" is the first step in Biden's economic recovery plan.
The Wall Street Journal reported that the second step of the plan is a supporting plan of roughly the same scale, focusing on childcare, medical health and education. The specific content will be announced later this month.
The plan will be supported by tax increases for wealthy individuals and families.
According to people familiar with the matter, Biden’s economic plan is expected to cost a total of US$3 trillion to US$4 trillion in 10 years.
The New York Times said that one of the controversies facing Biden’s plan is the president’s attempt to gain bipartisan support when the federal deficit has reached its highest level since World War II.
"Where can Biden find so much money? He can only print money." The Russian Satellite News Agency quoted Krutakov, an associate professor at the Russian Government Finance University, as saying that this will cause inflation.
Wang Fan, vice president of the China Foreign Affairs University, told the Global Times reporter on the 1st that the large-scale printing of money in the United States will cause the depreciation of the US dollar, and the entire world will be negatively affected.
Biden said he hopes Congress will approve the plan this summer, but there are obstacles even within the Democratic Party.
The British "Financial Times" reported that Biden is facing two types of competing pressures within the Democratic Party.
People on the left think Biden's plan is too cautious.
New York Congressman Cortez called the $2 trillion infrastructure plan "completely not enough."
But some other lawmakers worry that the tax increase may be too large. Some people have called for the abolition of the US$10,000 limit on personal state and local tax exemptions established during the Trump era, or they will not support the plan.
This is equivalent to a tax cut.
The Wall Street Journal commented that the launch of the plan kicked off months of negotiations between the White House and Congress.