USA: What we will lose if we do not rebuild better | Business

I will leave the sensible political analysis for others. I do not know why Senator Joe Manchin appears to have decided to retract an explicit promise he made to President Joe Biden. I naively believed that, even in this age of rule-breaking, sticking to a deal that was just made would be one of the last rules to be lost, as the reputation for keeping one’s word is useful even to the most cynical of politicians. I also don’t know what, if anything, can be saved from the Rebuild Better plan.

What I do know is that the human and certainly financial costs will be enormous if Biden’s moderate but crucial spending plans do not come to fruition.

Failing to pass a decent social program would mean condemning millions of American children to poor health and low income as adults, because that’s what happens when you grow up in poverty. It would also mean condemning a few millions more to inadequate health care and financial ruin if they get sick, because that’s what happens when people don’t have proper health insurance. Scores of people would be condemned to preventable diseases and premature death from air pollution, even without taking into account that the danger of a climate catastrophe would be greater.

All of this is not guesswork. There is overwhelming evidence that children from low-income families who receive financial aid are much healthier and more productive as they reach adulthood than those who do not. Uninsured Americans often do not have access to necessary medical care and face unaffordable bills. And studies show that policies to mitigate climate change will also bring great health benefits as the air will be cleaner in the next decade.

By way of subsection, it is unclear how many Americans are aware of how far we are lagging behind other countries when it comes to meeting basic human needs. I still meet people who believe that we have the highest life expectancy in the world, when the reality is that we can expect to live three to five years less than the citizens of most European countries. And, by the way, also between the states of the country there are increasing differences. In 1979, life expectancy in West Virginia was only about 14 months shorter than in New York; By 2016, the gap had widened to six years. There is no doubt that Manchin’s home state would benefit immensely from the social spending that the Democratic senator seems determined to prevent.

The weakness of the US social safety net also has economic consequences. It’s true that our GDP per capita is still high, but this is largely due to Americans taking far fewer vacations than people in other countries, which means they produce more because they work longer hours. In other respects we are lagging behind. Even before the pandemic, an American in his prime working years was less likely to be active in the workplace than his peers in Canada and many European countries, presumably in part because we did not help adults stay integrated into the workforce by providing childcare. and paternity leave.

Know in depth all the sides of the coin.


But can we afford to improve our lives? One answer is that other rich countries seem to be doing very well. Another is that Manchin’s objections to the proposed legislation lose steam when subjected to close scrutiny.

Manchin claimed that the Congressional Budget Office had determined the cost of the bill to be “more than $ 4.5 trillion.” And no, it’s not. That figure is the calculation required by the Republicans of the disbursement in the assumption that everything that the legislation establishes becomes permanent, which is not what the bill says. Also, if Congress voted to extend programs like the child tax allowance, it would likely vote in favor of compensation for lost income as well. The Budget Office’s analysis of the current wording of the law – which concluded that it had almost no effect on the deficit – gives us a much better idea of ​​its likely fiscal implications than this rigged hypothesis.

As for Manchin’s claim that we have an “overwhelming” national debt, it is perhaps worth noting that federal interest payments as a percentage of GDP are only half what they were in Ronald Reagan’s time, and that if they adjust to inflation, they are basically zero. And what about inflation? The proposed expenditure on Reconstruir Mejor is spread over several years, so it would not have much impact on the increase in general demand in the short term; In the first year, its contribution to the deficit would be only 0.6% of GDP, which is not enough to influence the rise in prices too much. On the other hand, the Federal Reserve has just made it clear that it is prepared to raise interest rates if inflation does not subside, so that the influence of public spending should be even less.

The senator’s letter explaining why he said what he said on Fox News does not seem like a carefully crafted political statement; It doesn’t even look like a coherent ideological manifesto. In fact, one would say he drew it up in a hurry, putting together a hodgepodge of Republican talking points brought up in any way in an attempt to justify his sudden betrayal and to portray himself as a victim.

Sorry but no. The victim in this story is the United States, and not a senator who has to bear the consequences of having broken a promise.

Paul Krugman He is a Nobel Prize in Economics. © The New York Times, 2021. News Clips translation

Sign in to continue reading

Just by having an account you can read this article, it’s free

Thanks for reading EL PAÍS

Related Posts

George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

Leave a Reply

Your email address will not be published. Required fields are marked *