President Joe Biden’s $2 trillion, “epoch-making political gamble” to recast the U.S. economy is seen as “risky, confused and selfish.”
That’s according to the current issue of The Economist devoted to Biden’s “Big, Green and Mean” economic plan.
Biden’s infrastructure, semiconductor chip and green energy spending plan to reshape the economy is, at its essence, defective because it aims to accomplish three disparate things at once, according to The Economist.
The only reason why Biden espoused climate change regulations was to appeal to the liberals in his party to build a majority in Congress. The CHIPS Act was to cater to protectionists concerned about China. Infrastructure traditionally is a policy both Democrats and Republicans embrace.
Not only will the goals conflict, according to the left-leaning business publication, but they will create protectionism that will infuriate allies, as well as inefficient subsidies.
Individually, “each of these concerns is valid, but in terms of policy, the necessity to bind them together has led America into a second-best world,” The Economist says.
Biden’s policies are embedded in $1.2 trillion of spending in the Infrastructure Act, $280 billion in the CHIPS Act and $400 billion earmarked for green technology subsidies in the Inflation Reduction Act.
Each contains a plethora of rules such as those requiring batteries be manufactured in the United States, technology restrictions to protect national security, and subsidies tied to American manufacturing.
The net result of the red tape is American industries will be more focused on lobbying Washington than on innovating and that it will thwart international supply chains.
The Economist also believes the Biden administration should concede more subsidies to foreign manufacturers to create less-expensive products, and that the subsidies should favor technologies not yet on the commercial market. Two such emerging technologies are new kinds of nuclear power and carbon capture and storage.
“Be under no illusions,” the magazine, known for its social and economic liberalism, concludes. “It is audacious to believe that the way to cope with three problems which are too hard to tackle separately is to deal with them all at once.
“A giant plan that has so many disparate objectives does not simply succeed or fail,” The Economist continues. “Its full consequences may not become clear for many years. You do not have to be Ayn Rand to question whether the government is up to managing such an ambitious set of projects.
“Mr. Biden’s blueprint for remaking the economy will change America profoundly—for better or worse.”
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