Mr Biden has stressed that such aid will increase consumer spending, but he and his team are committed to redistributing the money in a more humane way: avoiding as many Americans as possible, in order to avoid the scar damage from homelessness, hunger and the virus itself to avoid .
The Biden team and its allies are confident that if successful, the economy will be prepared for a rapid recovery. Other policymakers and forecasters, including Federal Reserve chairman Jerome H. Powell, have predicted a rapid recovery once the virus is under control.
“The recovery from the great recession has been delayed for years because we have not acted to the extent of the problem,” said Heidi Shierholz, a former chief economist at the labor ministry who now works at the Liberal Economic Policy Institute. “This is a great break from past mistakes.”
The Biden Plan is not the exact plan many economists, including liberals like Mr. Furman, would have chosen. The direct controls that proved to be a successful political message in the Georgia runoff elections and put the Democrats in control of the Senate will reach millions of Americans who have not lost income during the pandemic and are most likely to put the money in savings.
And its price tag, along with the inclusion of provisions that Conservatives have long struggled against, such as raising the federal minimum wage to $ 15 an hour, means the package is unlikely to find much Republican support. Lawmakers are already warning that it is overspending and excessive on top of the $ 900 billion and $ 2.2 trillion packages passed in December and March.
Some conservative economists say the package is spending far more than is necessary to fill what is known as the “output gap,” which is essentially the value of the loss of performance in the economy due to the recession. They begin to warn that pouring too much fuel into the economy can lead to runaway inflation – the same argument that many made in 2009 that has been proven wrong.
“A package this size is not advisable,” said Michael R. Strain, an economist at the conservative American Enterprise Institute. “It would fill the output gap many times over.”