What Biden’s Stimulus Package Means for U.S. Economic Growth

The third and largest stimulus package ($1.9 trillion dollars) was signed into law by President Biden on March 12, 2021. This government spending amounts to nearly 10% of the size of the U.S. economy. So, what does this fiscal stimulus mean for U.S. economic growth, both in the short-term and long-term?

With many factors at play, forecasting economic growth is difficult. However, this extensive stimulus package may prove to provide a sharper recovery than what we experienced in the 2008-9 Great Financial Crisis.

For millions of American consumers, the latest stimulus package includes:

  • direct payments of up to $1,400
  • increased tax credits for families with children
  • extension of a $300-per-week supplemental unemployment benefits

The package also includes billions for state and local governments, and education.

For individuals, it’s expected that much of the aid may be used to reduce personal debt, and increase contributions to retirement or investment accounts. Along with this stimulus package, the availability of vaccines and states opening up more and more, we may see the economy surge forward.

Over the past 20 years U.S. economic growth has managed only 1.9% annually. The general consensus among economists is that U.S. economic growth will rise 5% to 7% in 2022, and then 3% to 4% beyond 2021. Some feel this will bring the U.S. economy back to its pre-pandemic trajectory, fostering low unemployment.

But economic stimulus does not come without risks. In the longer-term, this stimulus will add nearly 7% to the accumulated federal debt of $28 trillion. With that in mind, the nation could be looking at greater interest payments on the debt in future years.

Additionally, some economists are concerned about higher inflation, given the loss of production capacity over the last year. With so many businesses failing due to the pandemic, demand for some goods and services will exceed available supplies in the near term.

Other potential risks, unforeseen to economic growth could occur such as a surge in oil prices resulting in higher gas prices at the pump, along with lower corporate profits. Newer variants of the COVID-19 virus have emerged, and if drug companies are not successful to counter these variants by the winter of 2021-2022, then a new set of restrictions could be put into place which could hinder economic growth.

Currently, many economists feel the outlook appears to be strong for the U.S. economy in 2021 and further. These projections for strong U.S. economic growth include positive global economic growth to rise to a level of about 5% in 2021. As America can get “back to work” and with its historical strong work ethic and entrepreneurial spirit, the United States appears to once again regain its role as the major driver of the world’s economy.

 

SOURCE : WALL STREET JOURNAL

Office Locations

Louisville

2201 High Wickham Place
Louisville, KY 40245
502.753.0609

Cincinnati

100 E-Business Way
Suite 110
Cincinnati, OH 45241
513.842.1700

Bowling Green

1048 Ashley Street
Suite 301
Bowling Green, KY 42103
270.843.4115

Indianapolis

5750 Castle Creek Parkway North Drive
Suite 170
Indianapolis, IN 46250
877.634.9757

Grand Rapids

607 Cascade West Parkway
Grand Rapids, MI 49546
844.476.2744

Elizabethtown

2901 Ring Rd

Elizabethtown, KY 42701
SCA 270.769.6371

270.990.9000

Paducah

4730 Village Square Drive
Suite 100
Paducah, KY 42001
270.443.8711

Bardstown

713 McDowell Blvd
Bardstown, KY 40004
502.348.1433

Atlanta

3625 Cumberland Blvd., Suite 1485
Atlanta, GA 30339
678.681.9518

All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. Portions of the content on this website were prepared by Marketing Library Inc.

Please note: When you link to any of the websites provided herewith, you are leaving this site. We make no representations as to the completeness or accuracy of the information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or use of third party technology, sites, information and programs made available through this site. By clicking on links above you will leave our website and assume total responsibility and risk for your use of the site you are linking to.

Respective services provided by ARGI Investment Services, LLC, a Registered Investment Adviser, ARGI CPAs and Advisors, PLLC, ARGI Business Services, LLC, and Advisor Insurance Solutions. All are affiliates of ARGI Financial Group. View our privacy policy here.

Argi Gateway Login

Forgot your password?

Call 866-568-9719