Economic Commentary: Biden Goes Big, U.S. Debt Ceiling, Scotland Elections


  • Will “Build Back Better” Bust the Budget?
  • The U.S. Debt Ceiling Is Back in Play
  • Scotland: Another Post-Brexit Headache

“Make no little plans. They have no magic to stir men’s blood.”

Residents of and visitors to Chicago likely know the work of the architect Daniel Burnham, even if they never learned his name. Aside from designing several landmark buildings, one of Burnham’s last works was the 1909 Plan of Chicago, his overarching view of how best to organize the fast-growing city. From individual structures to large-scale zoning, the 150-page illustrated volume lays out a well-considered vision. Following his own advice, he left behind no little plans.

Members of the Biden administration appear to have taken Burnham’s guidance to heart. In two increments, they have laid out sprawling plans that could leave a lasting imprint on the scope of federal programs and the national economy.

We have previously discussed the $2.7 trillion American Jobs Plan (AJP), which proposes funding for conventional infrastructure, schools, hospitals and elder care. The administration has since debuted the American Families Plan (AFP), which calls for more spending on early childhood and community college education, paid sick and family medical leave, and making temporary child tax credits permanent, estimated to cost another $1.8 trillion. The AJP would be paid with corporate tax increases and reforms, while the AFP includes income tax hikes on higher earners.

Weekly Economic Commentary - 05/14/21 - Chart 1

Many of these ideas are worthy of discussion. For example, starting education earlier in life has benefits to children, who gain a stronger foundation for learning, and their families, who are relieved of some of the burden of child care. The effort could be justified on that general basis. But the White House included some optimistic economics, claiming every dollar invested in early childhood education returns more than $7 in greater productivity, better health and lower crime. Even if true, those intangible future gains do not help with the high up-front costs borne by taxpayers, including larger schools and more teachers.