US | Biden’s American Jobs Plan will provide a structural lift

After spending over $5tn in cumulative cyclical fiscal relief, Congress is now contemplating President Joe Biden’s structural stimulus package worth $2.7tn in infrastructure, manufacturing, and health care outlays, as well as tax credits for housing and green energy investments.

What you will learn:

• The structural nature of this plan would generate a more gradual fiscal impulse than prior coronavirus relief packages and would lift long-term potential output by 0.1%.
• In the short term, the impetus from stronger government outlays will be tempered by higher taxes on corporations.
• We estimate the AJP would create 1 million additional jobs in 2022 and 2 million by the end of 2024.