COVID relief bill gets House votes, should add $1.1T to economy this year
- President Joe Biden's COVID relief bill has enough votes to clear the
House and Biden is now expected to sign the bill into law on Friday.
- While the overall package is $1.9T, it will add about $1.1T to the
economy this year, according to CBO outlay estimates.
- "Actual outlays could end up a bit lower, if growth and employment
accelerate faster than CBO assume," TS Lombard writes in a note today.
"This should temper some of the more fantastic growth estimates rooted in
this package."
- The House began voting on the bill this afternoon.
- An infrastructure bill will, in fact, be Biden's most important
legislation in terms of having a lasting impact on growth, Chief U.S.
Economist Steven Blitz writes.
- "The intent of the (COVID relief) bill's structure is to carry the
economy to the Covid finish line, although some allocations liberally
expand the meaning of 'carry,'" Blitz says. "The Biden plan does ramp up
the volume of outstanding Treasury debt, an increase the Fed will
dutifully
purchase a good chunk of, but issuance to finance the bill is not going
to
occur all at once."
- The $394B that is going out in direct checks amounts to about
two-weeks pay from a broad macro perspective, Blitz estimates.
- "By our guess, and it is an arbitrary ranking, about $530bn is truly
stimulus. One can consider aid to be stimulus in the counterfactual
sense -
it keeps spending from falling off more than otherwise. We look at
stimulus
as something that jumps the economy rather than keeps it from falling –
such as the $1,400 checks and the tax credits paid on the run, rather
than
annual adjustment when taxes are filed."
- Infrastructure will be more important to growth because there is a
political, economic and social need to build back middle-income earners,
he
says. But it's perplexing why a plan to boost capital investment would
raise capital gains taxes.
|Today, 2:10 PM|32 Comments
- President Joe Biden's COVID relief bill has enough votes to clear the
House and Biden is now expected to sign the bill into law on Friday.
- While the overall package is $1.9T, it will add about $1.1T to the
economy this year, according to CBO outlay estimates.
- "Actual outlays could end up a bit lower, if growth and employment
accelerate faster than CBO assume," TS Lombard writes in a note today.
"This should temper some of the more fantastic growth estimates rooted in
this package."
- The House began voting on the bill this afternoon.
- An infrastructure bill will, in fact, be Biden's most important
legislation in terms of having a lasting impact on growth, Chief U.S.
Economist Steven Blitz writes.
- "The intent of the (COVID relief) bill's structure is to carry the
economy to the Covid finish line, although some allocations liberally
expand the meaning of 'carry,'" Blitz says. "The Biden plan does ramp up
the volume of outstanding Treasury debt, an increase the Fed will
dutifully
purchase a good chunk of, but issuance to finance the bill is not going
to
occur all at once."
- The $394B that is going out in direct checks amounts to about
two-weeks pay from a broad macro perspective, Blitz estimates.
- "By our guess, and it is an arbitrary ranking, about $530bn is truly
stimulus. One can consider aid to be stimulus in the counterfactual
sense -
it keeps spending from falling off more than otherwise. We look at
stimulus
as something that jumps the economy rather than keeps it from falling –
such as the $1,400 checks and the tax credits paid on the run, rather
than
annual adjustment when taxes are filed."
- Infrastructure will be more important to growth because there is a
political, economic and social need to build back middle-income earners,
he
says. But it's perplexing why a plan to boost capital investment would
raise capital gains taxes.
|Today, 2:10 PM|32 Comments
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