A recent study by the University of Pennsylvania’s Wharton School found that President Biden’s infrastructure plan would cut the nation’s debt and slightly increase economic growth. Researchers said the additional $579 billion in new infrastructure spending would increase domestic output by 0.1% and decrease the U.S. debt by 0.9% by 2050. While Americans look at economic recovery, experts say our nation’s leaders need to stop ignoring, downplaying, or falsifying the uncomfortable truths and keep the people in the loop.
Biden’s infrastructure plan would cut U.S. debt and slightly increase economic growth, Wharton study finds
A bipartisan infrastructure deal reached by President Joe Biden and a group of senators would not only add to economic growth but also lower the national debt, according to a new study from the University of Pennsylvania’s Wharton School.
Researchers at the Wharton School said the additional $579 billion in new infrastructure spending would increase domestic output by 0.1% and decrease the U.S. debt by 0.9% by 2050.
“Over time, as the new spending declines, IRS enforcement continues, and revenue grows from higher output, the government debt declines relative to baseline by 0.4 percent and 0.9 percent in 2040 and 2050 respectively,” the Wharton team wrote.
Speaking to CNBC on Tuesday, Wharton senior economist Jon Huntley said improvements to public capital (roads, bridges and other physical infrastructure) makes private capital (trucks and trains hauling goods for companies) more productive over time.
Fewer potholes and rail service interruptions, when summed over years, increase U.S. economic activity and encourage further investment from the private sector.
You can read the full article, here.
Fox Business/Gary Shaprio
Workers, inflation, tech and three uncomfortable truths about our economy
In 1710, Jonathan Swift wrote, “Falsehood flies and truth comes limping after it.” It’s a saying that still has relevance today. When it comes to politics, false narratives and myths often come before facts, and it can be hard to break the spell of falsehood once it takes hold.
Today, America is embroiled in some pretty dangerous falsehoods about the economy. Our leaders are ignoring, downplaying, or falsifying some uncomfortable truths that we, as a nation, need to face. These truths will shape not only our lives but our children’s lives. We must confront them head-on.
So here are three uncomfortable truths about our economy and what we can do to address them.
Truth One: Our nation faces an acute shortage of workers.
To put it plainly, cash incentives from the stimulus payments Americans have received are leading to an acute shortage of workers. Our nation has more than eight million jobs open and at least ten million unemployed Americans. While some of it is a skills mismatch, childcare issues or pandemic stress disorder, the untaxed benefits give too many Americans the equivalent of six figures of pay — without working.
Almost every mid-and large-sized company CEO I know says they are short employees. Restaurants, retailers, bike shops, hotels, factories, and transportation, maintenance and landscape companies now face major worker shortages. Truck driver jobs are open, ships are piling up in ports due to an absence of dockworkers, supermarkets lack cashiers, and even the post office struggles to deliver mail.
Keep reading, here.
CNN Business/Matt Egan
America’s economy is booming, but Republicans are miserable
Unemployment is shrinking. The stock market is booming. Americans are returning to the skies and even to movie theaters. And yet Republicans are deeply worried about the state of the economy.
Even though the US economy is expected to grow this year at the fastest pace in decades, consumer sentiment among self-identified Republicans is worse today than during the height of the pandemic, according to the University of Michigan.
In fact, Republicans are more pessimistic than at any point since September 2010, when the economy was just beginning to dig out of the Great Recession.
Meanwhile, consumer sentiment among self-identified Democrats is higher than at any point during the presidency of Donald Trump — even though unemployment was far lower then than it is today.
This polarization of consumer sentiment across party lines is not entirely new, but it got significantly worse during the Trump era and continues to this day.
“It didn’t really matter who was elected, until Trump,” said Richard Curtin, who leads the University of Michigan’s closely-watched consumer sentiment surveys.
Consider what happened last fall, just before the presidential election. The University of Michigan’s consumer sentiment index among Democrats stood at 72.4 in October 2020, compared with 98 for Republicans.
By the time Joe Biden was sworn in as president, sentiment among Democrats surged to 89.5, while that of Republicans plunged to 69.8. That gap widened in the months to come.
“The overall level of consumer confidence nationally didn’t really change when Biden took office,” Curtin said. “Democrats and Republicans just switched places.”
Read the full story, here.