Meet the American Rescue Act - Slow Boring⁠↗

The American Recovery and Reinvestment Act was $787 billion which is like $950 billion in today’s dollars. The bipartisan Covid relief bill that passed in December was about that big and the CARES Act was much larger. But despite that, Biden is talking about doing a bill that’s about double the ARRA in inflation-adjusted terms and he’s saying that’s just going to be the first of two bills. That’s an extremely welcome sea change in thinking about fiscal policy. What comes next is the congressional politics, where the outlook still seems unclear to me. But I hope that whatever happens on the Hill, Biden aims to bargain up — securing support by adding ideas (even bad tax cut ideas) that make the package larger rather than leveling down. The US government can borrow money for less than the rate of inflation, which means we owe it to ourselves to borrow, borrow, borrow.