Biden learned from the Great Recession, will roll out a multi-trillion stimulus to save the nation

The old strategists who cautioned about deficits and the markets aren’t the same people Biden is listening to now, and what that means is everything to the nation rebounding from this. It means Trump’s corporate tax cuts gone. It means higher taxes for the very rich. It means, Politico is hearing from campaign advisors, “a multitrillion-dollar stimulus spending package aimed at fighting the Covid-19 virus, sending cash directly into people’s pockets, renewing enhanced unemployment benefits, rescuing struggling state budgets and investing in new infrastructure projects.” Let’s all hope Politico is hearing right, because that is precisely what has to happen if we’re all going to make it out of this on the other side.

It sounds really good so far. Here’s Biden’s senior policy adviser Jake Sullivan: “The magnitude of the crisis in 2008 was enormous, but this time we’ve got multiple overlapping crises. […] As a result, the sense of possibility in both policy terms and political terms is big both in the scope of the agenda and the size of the investments the vice president wants to make.” And boy, howdy, do we have overlapping crises thank-you-very-much-Donald-Trump-and-Mitch-McConnell.

The climate crisis. The pandemic. Obscene economic inequality. Corruption at every level of government. A hijacked federal judiciary.

And an economic crisis. The Congressional Budget Office estimated months ago that the hit the national economic output for the nation over the next ten years—just from coronavirus—will be $16 trillion. That was in May, and since then the nation has done pretty much nothing to improve the situation, either with the pandemic itself or keeping the economy afloat. The nation’s leading economists, more than 140 of them including former Federal Reserve chairs Ben Bernanke and Janet Yellen as well as a raft of former Council of Economic Advisers and Nobel laureates, have all argued for what the Biden team is now embracing.

“Given current projections of economic need, this new bill should provide, at a minimum, continued support for the unemployed, new assistance to states and localities, investments in programs that preserve the employer-employee relationship, and additional aid to stabilize aggregate demand,” they wrote in June. “While the signers of this letter have different views on the optimal size and composition of the package, we all agree that an adequate response must be large, commensurate with the nearly $16 trillion nominal output gap our economy faces over the next decade, according to CBO estimates.”

One of Biden’s advisers—along with Sen. Elizabeth Warren and left-leaning economists Heather Boushey, Lisa Cook, Raj Chetty, William Spriggs—is Jared Bernstein. He told Politico that Biden expects the economy still in need of massive federal intervention after he presumably takes office in January. “Every forecast I’ve seen, including my own, suggests that the output gap and the unemployment rate will be very high at the beginning of next year,” he said. “I’m not going to give a number in terms of trillions, but it would need to be definitely very significant in the spirit of the magnitudes of the bills we’ve seen so far.” He and the economic team all support the kinds of taxing and spending policies that would create what Biden has pledged, the “most progressive administration” since Franklin Delano Roosevelt. In April, Biden told Politico that he wanted a package “a hell of a lot bigger” than the $2 trillion CARES that had passed the month before.

He is still committed to that, and is “deeply concerned” advisers tell Politico, about the economic “scarring” from this crisis; the kind of economic hangover the nation suffered in the years following the Great Recession that left so many, particularly young people, behind. Biden himself hasn’t shied away from FDR-like rhetoric on the campaign trail.

On CNN last week he said “I’d make the changes on the corporate taxes on day one. The reason I’d make the change on corporate taxes is it could raise $1.3 trillion if they just start paying at 28 percent instead of 21 percent. […] What are they doing? They’re not hiring more people. What are they doing? They are buying back their own stock.” (He couldn’t change corporate taxes on day one, not unless Congress had already passed it. But that’s a goal for a new Democratic Senate!) He told wealth donors in June: “I’m going to get rid of the bulk of Trump’s $2 trillion tax cut. […] And a lot of you may not like that but I’m going to close loopholes like capital gains and stepped-up basis.”

Sullivan, his senior adviser, told Politico “People recognize that we are going to need a significant magnitude of investment. […] That’s not to say the GOP wouldn’t try and resist, and all of a sudden put on their green eyeshades again on spending. But the realities today, in terms of what can be invested to get back to full employment, are just different than they were back in 2009.”

Of course the Republicans are going to scream “but the deficit.” They already have—it’s one of the excuses McConnell has been using to stop further COVID-19 relief. That’s why winning the Senate is as critical as winning the White House. Winning the Senate, and then getting rid of the filibuster. There’s no way this country will ever have nice things again if it doesn’t happen.

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