Biden Will Face an Unstable Economy and a Divided Government

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"1280px-Joe_Biden_(48651032061)" (CC BY 2.0) jlhervàs

U.S. President-elect Joe Biden will be facing an ascending struggle as soon as he takes office. From addressing the coronavirus pandemic to reopening the U.S. economy to handling a divided government; Biden has to solve a list of crucial problems to convince the people that “America is back.”

Today we will look into the challenges that President-elect Joe Biden will face.

The coronavirus pandemic

According to most economists, U.S. President-elect Joe Biden will have a hard time rebuilding the U.S. economy until the coronavirus is contained. 

Joe Biden then pledged to assemble a new coronavirus taskforce as soon as he takes office on January 20. This promise is boosted by Pfizer’s announcement of their upcoming vaccine, which is said to have 90% efficacy. Other than the vaccine, Joe Biden is also planning to do a second nationwide lockdown.

Last week, the U.S. recorded a new daily record of 150,000 infections, which pushed the overall cases past 10.4 million.

One of Joe Biden’s coronavirus advisor, Michael Osterholm, warned that the country is facing “COVID-hell” due to the virus spreading exponentially. 

Limit the economic damage

During the first wave of the coronavirus pandemic, more than 44 million Americans were temporarily laid off. Then, as the lockdown sparked a wave of bankruptcies, more than a quarter of them permanently lost their jobs. 

With the planned second nationwide lockdown, a fresh wave of layoffs is more likely to happen. Significant sectors of the economy such as tourism and hospitality, and aviation will then remain in deep trouble and could likely add to the number of businesses that declared bankruptcy. 

“IMG_7326” (CC BY 2.0) by Matt Johnson

Worse, Biden’s Emergency Action Plan to Save the Economy, which promises to promote work-sharing in order to prevent layoffs, also calls for more stimulus payments similar to the amount distributed to 160 million Americans this year. 

Despite these plans and promises, Biden will have a hard time guaranteeing that financial aid arrives on time. 

The first lockdown already revealed the difficulty that states face in processing the massive number of unemployment insurance claims. Other than that, stimulus checks were also delayed, and in some states, it did not reach recipients until August. 

Implementing Build Back Better Blueprint

Joe Biden’s Build Back Better Blueprint plan is worth $7 Trillion. This amount is planned to be spent on building massive infrastructure projects that are said to tackle climate change, health care, affordable housing, and boost education. 

On top of this, $2 Trillion is also proposed to slow down global warming by making vehicles, public transportations, power plants, and buildings more fuel-efficient and less reliant on fossil fuels.

Joe Biden has laid out comprehensive and ambitious plans on many fronts. He vowed to tackle the pandemic and the problems that come with it. On top of that, he also promised to restore America’s leadership role in the world and restore international alliances. 

The president-elect pledged to solve all these problems in his first 100 days in office, and he will do this by reversing a bulk of executive orders that were signed by President Trump. 

However, while executive orders can be reversed without a Senate majority, any step that requires Congressional approval will be impossible to pass. This will be the worst-case scenario for the president-elect and the country. 

Divided control of the White House and Congress could result in paralysis in fiscal policy. On top of that, there could also be a continued reliance on the Fed as the principal backstop of the U.S. economy and the entire global economy. 

This situation will be the recipe for a lopsided financial crisis that could heighten the country’s future economic instability.