Joe Biden wins the US elections: 6 keys to his plan to "save" the country's economy
In the midst of the worst economic crisis since World War II and a rampant pandemic, Joe Biden proposed during his campaign to "save" the US economy.
"You cannot handle an economic crisis until you have defeated the pandemic," he said during a speech in Delaware.
That is why its economic program proposes measures for immediate application to face the emergency and a plan focused on job creation and fiscal investment in national manufacturing, technological development and renewable energy.
How do you pay for all that? Biden's plan is to do it with a reform that raises taxes on large companies and higher-income individuals to increase tax revenue.
But while it is not defined whether Biden will govern with a Senate with a Democratic or Republican majority, something that will be known after Georgia's two-seat runoff on January 5.
And that is key because the Senate can depend on the depth of its economic reforms and whether they can advance quickly or be partially paralyzed.
In an economy plunged into the black hole of the pandemic - which ended the largest expansionary cycle in the country's history - and unemployment of 6.9%, the future scenario casts more shadows than certainties.
From Wall Street, many of the big investors are hoping that if the Republicans finally get control of the Senate, there will be no big changes in tax issues or a sharp increase in regulations that affect large corporations.
This political battle is still pending, but what is clear is that the country is going through a deep recession and although in the third quarter the Gross Domestic Product, GDP, had a recovery, it is still 3.5% below the pre-crisis level.
Under his slogan "Buy American", Biden seeks to protect the domestic industry to create new jobs.
But his opponents believe that his measures will produce exactly the opposite effect.
"The Biden plan would eliminate about five million jobs over the next decade," wrote Nikki Haley, the former ambassador of the Donald Trump administration to the UN.
"By increasing taxes and regulatory burdens for job creators, companies of all sizes will have a harder time expanding or staying in business."
In a deeply polarized country, where the construction of agreements will require a great negotiating effort and a lot of political will, we present you 6 keys to Joe Biden's economic plan:
1. A new stimulus package
Biden proposes to obtain the approval of a new fiscal stimulus package that allows to provide financial aid to families and companies, in addition to extending unemployment insurance.
But the road is not easy.
The current Congress has not approved new relief measures against the effects of the pandemic since March, when it allocated US $ 3 trillion to a fiscal package that included the delivery of a check for US $ 1,200 to citizens for one time and the payment of US $ 600 per week for the unemployed.
The current problem is that most of that aid has run out and the parties have not been able to agree to extend the assistance.
2. Job creation boosting the national industry
In Biden's plan, the creation of five million jobs plays a central role, promoting the development of the national industry.
His proposal is to encourage the purchase of products made in the United States. And for that, it has promoted the concept of "Buy American", which includes that all purchases made by the government and its contractors are American products.
This idea is part of a broader plan called "Rebuild Better", which involves a fiscal investment of US $ 400,000 million in the purchase of national goods and services, and an additional investment of US $ 300,000 million in research and technological development.
Those resources would be destined mainly to the development of clean energies, biotechnology, telecommunications and artificial intelligence.
As these are gigantic investments, some economists have doubted that they can be financed only with a tax increase and project that, to meet the goal, the State would have to increase its indebtedness.
3. Increase in social security and minimum wage
A priority goal of his program is to increase the national minimum wage from $ 7.25 to $ 15 an hour by 2026.
"There are people who make six, seven, eight dollars an hour," Biden said during the latest debate.
"They deserve a minimum of US $ 15. What is below that level, leaves you below the poverty level," he added.
Opponents of the initiative argue that with this salary increase, many businesses will have to close their doors because they will not be able to assume this increase in costs.
Other measures aim to expand Social Security benefits for those over 78, people with low incomes and those who have been widowed.
Additionally, it proposes an increase of US $ 200 in the check that beneficiaries currently receive.
4. Tax hike
Biden proposed during his campaign a tax increase on corporations, returning to the 28% that existed before the Trump administration lowered it to 21% in 2017.
That Trump tax cut "allowed the biggest tax cut for multinationals without even requiring them to invest in the US or hire domestic workers," Biden said.
His plan proposes avoiding a higher tax burden for those who earn less than US $ 400,000 a year, with the idea of "protecting the middle class" and those with low incomes.
Biden has also proposed taxing capital gains and an income tax hike from 37% to 39.6%, for those who earn more than $ 1 million a year.
These measures are part of a reform that seeks to raise close to US $ 4 billion.
However, some economists estimate that Biden's proposal would only raise about $ 3.4 billion over 10 years, while the cost of his plans could exceed $ 5 billion, an estimate supported by studies published by researchers from The Wharton School of the University of Pennsylvania and other institutions.
5. Trade war with China
After the Donald Trump government started a long trade dispute with China that involved raising tariffs by both countries, Biden has not said so far that he wants to turn that relationship around.
On the contrary, his campaign website indicates that the Democrat "will take aggressive action" to ensure that the measures established against China are carried out.
The idea is to continue fighting what the US considers unfair competition and exchange manipulation, among other "abuses" by the Asian power, although no further details are known about the plan.
And although at some point he suggested that he would eliminate the tariffs imposed by Trump, sources in his campaign indicated that he will reassess them, according to The Washington Post.
Regarding the strategy, what he has said is that he will coordinate with allied countries to confront China, instead of doing it unilaterally.
6. Reduce the cost of healthcare
Biden has said that one of his goals as president is to ensure that no American who purchases health insurance pays more than 8.5% of his or her annual income on health care.
That could save people thousands of dollars, but it could also increase the share that employers pay for that insurance.
In the case of those who cannot afford private health insurance, he proposed lowering the age of eligibility from 60 to 65 for people who enter the Medicare health program, adding that it will include coverage of dental, vision and hearing services in the Program.
On the list of health benefits, Biden also wants to reduce the cost of prescription drugs to Medicare beneficiaries, for example by allowing the government to negotiate those prices, something that is currently prohibited by law.
And it also proposes to eliminate the rule that establishes that most drug prices rise faster than inflation.
Biden's economic plan is based on the use of fiscal policy to stimulate growth, protect national manufacturing and "rebuild the middle class" with a tax hike that, in theory, will only affect the wealthiest.
The great challenge is that the application of these measures will not only depend on the political composition of Congress, but also on the evolution of the pandemic, a factor of uncertainty that weighs on global economic reconstruction and the fate of the world's largest economy. .
