It’s amazing how far a check will go when you are stuck indoors with no place to spend it. Americans in lockdown paid down $108 billion in credit card debt over the last year. Although far from over, the coronavirus pandemic will leave in its wake a lot of pent-up economic demand. An immediate problem will be supply (NYT):
Container ships stretch far out into the Pacific, waiting days for their turn to unload goods at California ports. Automakers pause production because they can’t get enough of the computer chips that make a modern car work. Long-dormant restaurants finally see a surge of customer demand, but they can’t find enough cooks.
This is a good problem to have. With nearly $3 trillion in federal cash flooding into the economy (and perhaps more to come), depressed demand for goods and services is set to skyrocket. The country is on “the early edge of the biggest economic boom since World War II,” financial mavens tell Axios. The boom will likely be global:
Biden administration spending will have ripple effects around the world, and overseas bank accounts also have grown during COVID.
- Governments’ actions in response to the pandemic raised global GDP growth by a full six percentage points, estimates the IMF, adding that “the global growth contraction last year could have been three times worse than it was.”
- Still, total output shrank so much — by a stunning 3.3% in total — that there’s now an unprecedented amount of slack in the global economy. In other words: The world has more potential upside than ever.
Furthermore:
The biggest names in finance are making increasingly bullish predictions. JPMorgan CEO Jamie Dimon said Wednesday in his annual shareholder letter, closely watched on Wall Street: “This boom could easily run into 2023 because all the spending could extend well into 2023.”
- Goldman Sachs last month raised its U.S. growth projection for this year to 8%, which would constitute the largest economic expansion in generations.
- In India, the growth rate will reach a torrid 12.5% this year, per the IMF’s latest projections, to be followed up with world-beating 6.9% growth in 2022.
A shame Republicans are uninterested. “Astonishingly,” writes Catherine Rampell, “Republicans are on the verge of surrendering to Democrats solo credit on yet another popular issue: upgrading the nation’s crumbling infrastructure.” They still have not settled on why, but they oppose it. Truly, madly, deeply.
The country needs to move on. It needs rebuilding and building is not what Republicans do. Even with lots of money to be made. Not if they have to share it. The party of insurrection is dead but its ghost won’t leave.