Biden Infrastructure Plan Will Hurt, Not Help, Economy
IN THIS ISSUE:
1. Overview – President Biden’s Enormous Infrastructure Bill
2. What Biden Says His Massive Infrastructure Plan Will Do
3. What Not to Like in President Biden’s Infrastructure Bill
4. Biden’s Infrastructure Plan is Bad For Markets & Investors
Overview – President Biden’s Enormous Infrastructure Bill
President Biden’s massive $2.25 trillion infrastructure bill is on the tracks, rolling toward what many in Washington believe will be speedy passage in the House and Senate. There are many problems with this historically large spending bill, as I will discuss below, but chief among them is the fact that less than 6% of the $2.25 trillion will actually be spent on roads and bridges. If we include all spending related to transportation, the amount only increases to just over one-third of the total.
Much of the so-called “infrastructure” spending will fund some liberal pork barrel spending projects which are loaded up in this Trojan Horse of a bill – including direct government giveaways, Green New Deal-style initiatives and programs to improve racial inequality, just to name a few. The president says his new bill will create millions of new jobs and will be a boon for the economy when it is enacted.
I and others argue just the opposite – that the massive bill will be bad for the economy, jobs and quite likely for the stock markets as well. Here’s why: Biden’s “American Jobs Plan” would hike America’s corporate tax rate to 28% from 21%, thus giving us what will be the highest corporate tax rate in the developed world. The repercussions will likely be severe.
Worse still is the likelihood the infrastructure bill may cost substantially more than $2.25 trillion. Initially, President Biden said he wanted $4 trillion for his infrastructure bill, then he trimmed it to $3 trillion, now it’s $2.25 trillion. I and others expect he will be back for more in the next year.