At the beginning of November 2020, suddenly, Wall Street takes off. It is not so much the election of new President Joe Biden that the American Stock Exchange welcomes, as it had done four years earlier with Donald Trump, but the discovery of vaccines against Covid-19. Thus, the United States will be able to emerge from the economic and health black hole into which it fell nine months earlier. All is not settled, a second wave more deadly than the first will arrive in January 2021, but the end of the crisis is in sight.
A year later, Wall Street is soaring again: the employment figures published on Friday, November 5 are reassuring, with an unemployment rate having fallen to 4.6%, while Joe Biden managed to have the House adopted definitively representatives of the infrastructure plan, voted this summer in the Senate by 50 Democrats and 19 Republicans. Reduced to 1,200 billion dollars (1,040 billion euros), this project that Mr. Trump had not been able to carry out, includes only 580 billion in new financing. It was emptied of most of its climate component and its financial counterpart, the increase in corporate tax and on the highest incomes, a sine qua non of a Republican vote.
This plan is a mixture of measures deemed essential: 110 billion for the repair of roads and bridges, 66 for railways, 40 for public transport. Sixty-five billion dollars will be spent on broadband access, with assistance of 30 dollars per month to low-income households to pay for Internet service. The electricity grid will receive $ 65 billion, while $ 50 billion will be used to make infrastructure more resistant to cyber attacks and natural and climatic disasters.
A dual strategy
When he arrives at the White House in January 2021, Joe Biden wants to push his advantage to transform the economy. This is all the more conceivable since he had, at the beginning of the month, a divine surprise with the victory of two Democrats in the senatorial elections of Georgia, which allow him to control the Senate.
The new American president immediately satisfies his foreign allies by returning to the Paris climate agreement while passing a massive plan to support the economy, worth 1.9 trillion dollars (8.5% of GDP), which reinstates federal unemployment benefits and sends tax check to American households. Some voices are voicing their reluctance on this initiative deemed to be off-timing, while the economy is already rebounding, such as former Treasury Secretary Larry Summers. He worries about inflationary pressures, with history showing that the central bank has, in this case, the greatest difficulty in piloting a soft landing for the economy: risking a recession while the economy is booming?
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With the infrastructure plan, Joe Biden lays the foundation stone of his economic record