I pledge you, I pledge myself, to a new deal for the American people. ~ Franklin Delano Roosevelt [June 1917]
The tables below offer a more specified answer
based on President Biden’s $1.8T American Rescue Plan (ARP, his covid relief
and stimulus program that Congress passed last month) together with his planned
$2.3T American Jobs Plan (AJP, his broadly-defined infrastructure plan). The
AJP is now being discussed across every political nanometer in DC, and in my
latest blog. Here are several specific findings, assuming
Congress does not change the president’s proposed AJP scope and/or expenditures,
which is an unlikely prospect:
·
President
Biden’s two big Plans’ spending totals $4.1 trillion which is over six (6)
times as large as FDR’s New Deal programs’ spending, adjusted for inflation.
·
The ARP
and AJP account for 19.4% of the 2020 GDP. The New Deal represented 45.3% of
the 1930 GDP.
·
On a
per capita basis, President Biden’s 2 plans embody spending $12,178 for every
American. That’s more than twice as large as the New Deal programs.
And Joe has only begun his legislative expenditure
efforts. With last week’s huge gift from the Congressional
Parlimentarian, Joe and his Congressional buddies now can use the reconciliation
process multiple times to overcome Repubs’ duplicitous obstinacy. Will the Dems’
fiscal tsunami accomplish their goals in a timely fashion? Perhaps, and success
will require precise, accomplished implementation to minimize the inevitable, possibly
nasty, unintended consequences. The size of these programs will necessitate prompt
additions to many federal, state and local agencies’ staff and management. In March, the unemployment rate in the government sector was a minute 2.7%. That
is likely to be just one of many challenges.
The first table provides some basic
information. The second one uses this information to address the inquiry. The
second table’s last row adds both the AJP and the ARP. It shows that so far –
only 81 days into his presidency – Joe’s actual and planned expenditures total
2.3 times as much on a per capita basis as the value of FDRs New Deal programs’
expenditures (in 2020$). Wow. Unsurprisingly, the New Deal programs accounted
for over twice as much of our GDP (45.3%) than Joe’s two programs probably
will.
With only these 2 programs President Biden will be showering each of us, mostly indirectly, with $12,178 worth of expenditures during the coming years. Interestingly, economic historians couch the New Deal programs as lasting for 7 years. The AJP currently is planned for 8 years of efforts (at the end of his second presidential term?).
|
Year |
Real GDP (2012$) |
Real GDP (2020$) |
Population (M) |
GDP/ capita |
New Deal Programs |
American Jobs Plan |
Ameri can Rescue Plan |
|
1930 |
$1,265B or $92B
in 1930$ |
$1,426B |
123.2 |
$9,002 |
$41.7B in 1930$ |
|
|
|
2020 |
$18,426 B |
$20,771B [14.6x
1930] |
331.0 |
$55,677 [6.2x
1930] |
$646B in 2020$ |
$2.3T in 2021$
or $2,260B in 2020$ |
$1.8T in 2021$
or $1,771B in 2020$ |
|
Program |
Expenditures (2020$) |
% of GDP |
Expenditure per capita |
|
New Deal
(1930) |
$646B |
In nominal
1930$: $41.7B/$92B = 45.3% |
$41,700M/123.2M
=$338 in 1930$ or $5,238 in 2020$ |
|
Amer. Jobs
Plan [AJP] (2021) |
$2,260B in
2020$. The AJP$ = 2.8x New Deal$ |
$2,260B/$20,771B
= 10.8%, using 2020$ |
$2,260,000M/331.0M
=$6,828 in 2020$ |
|
Amer. Rescue
Plan [ARP] (2021) |
$1,771B = The
ARP$ = 2.7x New Deal$ in 2021$ |
$1,771B/$20,771B
= 8.5%, using 2020$ |
$1,771,000M/331.0M
= $5,350 in 2020$ |
|
BOTH AJP &
ARP |
$4,100 B in
2021$. $4,031B in
2020$ and 6.2x larger than New Deal$ |
$4,031B/$20,771B
= 19.4% |
$4,031,000M/331.0M
= $12,178 in 2020$ or 2.3x more than New Deal$ |
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