USA: Way clear for Biden’s “rescue plan”

March 11, 2021, 5:00 p.m.

Update: March 11, 2021, 5:03 p.m.

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Washington (dpa) Joe Biden wants to lead the USA out of the corona pandemic. It is not only the spread of the virus that needs to be contained, but also the economic crisis. An important hurdle has now been cleared.

Nothing stands in the way of Joe Biden’s trillion-dollar “American rescue plan”: After the massive corona stimulus package has been passed by the US Congress, the only thing missing is the president’s signature to put the package of measures into effect.

This step is expected to follow on Friday. The size of the package of around 1.9 trillion US dollars (around 1.6 trillion euros) corresponds to almost ten percent of the annual US economic output. It should boost the economy, which has been hard hit by the pandemic, and create millions of new jobs – and could even boost the economy in Germany.

According to experts, Americans with low and middle incomes will particularly benefit from the new aids. The plan includes a one-time direct payment for most taxpayers of $ 1,400. Larger tax breaks and further direct payments are planned for families with children. There should also be financial aid for coronavirus tests, the vaccination campaign, school openings and additional support for the unemployed.

Many Republicans had blocked such extensive aid – in the vote in the House of Representatives on Wednesday, no Republican voted with Biden’s Democrats. The House of Representatives had to deal with the package of measures again because there had been changes in the Senate – the other chamber of Congress. The parliamentary process is now complete. White House spokeswoman Jen Psaki announced that Biden would sign the legislative package on Friday to put it into effect.

The Democrats had paved the way for the law to come into effect before mid-March. Otherwise, the extended and increased unemployment benefits for millions of Americans would expire on March 14th. Unemployment benefits, which are often very low in the US, are now to be increased by $ 300 a week through September. US Vice President Kamala Harris said earlier this week, with a view to the adoption of the package, that this week could mark a “real turning point in our fight against the coronavirus”.

Congress only passed an aid package worth around $ 900 billion at the end of December. After the worsening of the pandemic in the United States, Parliament also passed economic stimulus packages worth almost three trillion dollars last spring. The US government’s mountain of debt has grown rapidly since then. Some economists also fear that the stimulus package will fuel not only growth but also inflation. The Fed does not yet see such dangers.

US Treasury Secretary Janet Yellen believes the risk of long-term consequences for the American people is greater than the risk of inflation. And the new aids are well received by the population, as surveys of the past few days have shown.

The positive effects could not only be limited to the USA: According to calculations by the Institute for Macroeconomics and Business Cycle Research of the Hans Böckler Foundation, it could also stimulate the German economy. Germany will benefit noticeably from the program through higher exports, the union-affiliated institute reported on Thursday. The researchers anticipate additional growth in German gross domestic product of 0.3 percent this year and 0.1 percent next year.

According to calculations by the researchers, the US gross domestic product could be 2.9 percent higher in 2021 and 3.0 percent higher in 2022 than without the stimulus package. The US economy would grow faster than it has been since the early 1980s. In addition to Germany, other EU countries also benefited from the higher demand from overseas. As a result, the economic output of the euro area will be 0.3 percent higher in 2021 and 0.2 percent higher in 2022. Relevant inflation risks would not arise due to the significant economic stimulus in the USA.

© dpa-infocom, dpa: 210311-99-783288 / 3

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