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.
The
economic impact will also be massive. In particular, it lays the ground for a US economic bounce-back that would have seemed unthinkable last year, but which will now be felt around the planet. Personal spending of accumulated savings is likely to accelerate quickly too. According to the intergovernmental
Organisation for Economic Co-operation and Development, America is set to be the only one of its member states whose economy will be larger at the end of 2022 than the OECD was predicting before the pandemic. For a time this year, the US is expected to grow faster even than China, which has not happened for years. This involves some economic risk – though
slack in the US economy ought to restrain inflation.