INVEST IN AMERICA WEEKLY ROUNDUP

  • Invest in America released a factsheet on the care investments in the Build Back Better Act, noting that not only are investments in care extremely important to make life more affordable for hard-working Americans, they are also critical to the success of American businesses and the long-term growth of the economy.
  • Invest in America highlighted data from the weekly unemployment report, noting that while jobless claims have reached a pandemic low thanks to the passage of the American Rescue Plan, Americans are still eagerly awaiting the passage of both the Bipartisan Infrastructure Deal and the Build Back Better agenda to create millions of jobs and further strengthen the economy.

  • Invest in America amplified a report authored by economists at the Roosevelt Institute, who emphasized that the investments in the Build Back Better Act would ease many of the inflationary pressures on the U.S. economy, while a failure to pass those investments will lead to a permanently weaker economy.

KEY POINTS:

  • Much of the inflation we are seeing today will abate on its own as supply bottlenecks are resolved and businesses respond to higher prices by raising production. In other areas, such as housing and health care, rising prices are the result of long-standing problems of restricted supply and excessive market power. Here, the solution is public investment and policy changes to expand supply.

  • The COVID-19 pandemic disrupted our economy in ways never before seen, but the  extraordinary stimulus measures of the American Rescue Plan have set the stage for  what could be a rapid recovery—with the right policy choices, and absent further  upheaval from COVID variants. With continued public investment and support from the Federal Reserve, the economy could soon not only return to its pre-pandemic conditions but move past them into a historic boom.

  • If inflation fears lead the Fed to raise rates aggressively or Congress to scale back or abandon the Build Back Better agenda, those policy decisions will turn today’s temporary disruptions into a permanently weaker economy with higher unemployment and greater racial and income inequality. On the other hand, if policymakers recognize today’s inflation for what it is—the short-term friction of a rapid recovery—then today’s inflation may become a footnote to the story of a historic economic boom.

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