Biden is not another Roosevelt but another Hoover. The current situation in the United States is not much better than in the early days of the "Great Depression", and the United States needs another Roosevelt to get out of the predicament and revitalize the United States, but biden is just another Hoover, so the United States will not be able to avoid the fate of decay.
The current situation in the United States is not much better than it was in the early days of the Great Depression, and even worse in a sense, because the crisis did not fully erupt, but boiled frogs in warm water.
After the 1990s, the economies of Western countries entered a period of "great détente", and after the financial crisis of 2008, Western countries have actually entered a period of "great stagnation".
The Japanese economy began to fall into long-term stagnation thirty years ago, the European economy began to fall into long-term stagnation after 2008, and two of the three major economies in the West, the United States, Japan and Europe, have fallen into long-term stagnation. There is no essential difference between the economic system and economic policies of Western countries, and with the continuous intensification of the internal contradictions of the US economy, the US economy will inevitably fall into long-term stagnation.
For a long time, the reason why the US economy has performed better than Europe and Japan is mainly due to the fact that the financial, technological and military hegemony of the United States has supported the economic growth of the United States to a considerable extent. The economic growth of the United States is based on the use of its hegemonic position to expropriate other countries.
The reason why the Western economy fell into the "Great Stagnation" rather than the "Great Depression" is of course due to Keynesianism. Keynesianism, while it prevented the West from falling into the Great Depression again, did not prevent the West from falling into the Great Stagnation. They ignored key points from Keynes, who pointed out that the main shortcomings of the economies and societies in which we live are the inability to provide full employment and the inequities in the distribution of wealth and income. "Therefore, if steps are taken now to redistribute income in order to increase the propensity to consume, it is probably beneficial to the growth of capital.
Keynes
Keynesianism was abandoned by the West in the 1970s and 1980s for its inability to confront the problem of "stagflation", but in the 1990s Keynesianism returned. However, in the end, the West still did not understand the problem, which led to today's situation.
The root cause of the "Great Depression" is that the gap between the rich and the poor in society is too high, the proportion of capital income is too high and the proportion of labor income is too low, resulting in a serious contradiction in the social economy that production is greater than consumption. In the 1970s, the root cause of the general "stagflation" faced by the economies of Western countries was that welfare was relatively excessive, the proportion of labor income was too high and the proportion of capital income was too low, resulting in a serious contradiction between consumption and production in the social economy.
Keynesian methods of expanding effective demand can compensate for the lack of consumer demand to a certain extent and promote economic growth. After the "Second World War", under the influence of socialism and Keynesianism, Western countries vigorously promoted the construction of a welfare state, income distribution was significantly improved, and the contradiction between production and consumption was greatly alleviated.
After the "Second World War", the growth rate of social security expenditure in Western countries was much higher than the economic growth rate for a long time, and finally in the 1970s, there was excessive welfare, resulting in an excessive proportion of labor income and too low a proportion of capital income, resulting in the contradiction of social economy consumption being greater than production, so the economy of Western countries generally appeared stagnation, high unemployment and high inflation, that is, the so-called "stagflation".
Using Keynesianism to solve the problem of "stagflation" will of course be ineffective, because the social economy itself is a contradiction that consumption is greater than production, and expanding effective demand at this time is equivalent to adding fuel to the fire, which will only lead to the contradiction of consumption being greater than production further intensified.
The prescription for neoliberalism in the face of "stagflation" is to reduce government intervention, reduce demand management, cut taxes, cut social benefits, reform the welfare system, privatize, and so on. Reducing government intervention and reducing demand management avoids adding fuel to the fire. Measures such as tax cuts, cuts in social welfare, reform of the welfare system, and privatization of state-owned enterprises have helped to expand the supply of capital and labor. Tax cuts are conducive to expanding the supply of capital, cutting social welfare and abandoning the welfare state system is conducive to expanding the supply of labor and capital, and privatizing state-owned enterprises is also conducive to expanding the supply of labor and capital. Because there are many state-owned enterprises that assume the role of guaranteeing basic living needs.
By raising the level of social welfare and increasing the degree to which the basic subsistence needs of workers are guaranteed to be met, the marginal utility of wages will be reduced, because the marginal utility will diminish. The marginal utility of wages will decrease, and at a certain level of real wages, the laborers will be less willing to pay, the real wages that workers can get for a certain amount of labor will be increased, and the proportion of labor income will be increased. Conversely, the supply of labour will increase and the share of capital income will increase.
Hayek – one of the representatives of neoliberalism
Neoliberal policies expanded the supply of capital and labor, effectively alleviated the contradiction of consumption over production resulting from excessive welfare, and thus eliminated "stagflation".
With the continuation of the neoliberal influence, the gap between the rich and the poor continues to expand, and in the 1990s, the economies of Western countries have again had a contradiction of production greater than consumption, and Keynesianism has returned to a certain extent, but the influence of neoliberalism on the West has gone deep into the marrow, and Keynesianism has produced some things that are not different under the influence of neoliberalism.
With the widening gap between the rich and the poor, the economies of Western countries entered a period of "great relaxation" in the 1990s, and for decades, the economic growth rate of Western countries has been decreasing, interest rates have been decreasing, and inflation rates have been decreasing. At present, the basic characteristics of the economies of Western countries are the "three lows", that is, low growth, low interest rates, and low inflation. This is obviously a manifestation of the contradiction between production and consumption.
With the continuous outward transfer of manufacturing in Western countries, the problem of overproduction no longer appears, which to a certain extent masks the problems caused by serious inequality in income distribution, and the resulting decline in the rate of economic growth is insoluble.
Japan and Europe have regulated excessively high incomes through taxation, even masking the gross inequality in the distribution of income between labor and capital. Behind the "lost thirty years" of the Japanese economy is the continuous decline in real wages. The decline in real wages has a more severe impact on consumption than the relative slow growth of labour incomes. Wage growth in the United States and major European countries has also largely stalled for decades. Wage growth has stagnated for a long time or even negative growth, where is the wealth created by scientific and technological progress and the improvement of labor productivity? Either seized by domestic capital or seized by foreign capital.
The United States has used its hegemonic position, mainly financial hegemony, to temporarily avoid falling into the "Great Stagnation". The United States has used its financial hegemony to obtain a large amount of unearned gains from other countries by developing a debt-to-economic model.
For decades, economic growth in the United States has been entirely underpinned by income growth by a small number of wealthy people. The wider the gap between rich and poor in society, the stronger the dependence of the United States on the debt economic model, and the weaker the sustainability of the Us debt economic model. As the U.S. debt-bound economic model becomes unsustainable, the U.S. economic edifice will collapse.
The recent passage of the $1.2 trillion infrastructure bill by the U.S. House of Representatives was passed by the U.S. Congress after the Biden administration's repeated cuts in spending.
When Biden proposed the infrastructure plan in March, it was planned to invest $4 trillion. Republicans, however, are bitterly unhappy with this option. After a tug-of-war between the two sides in Congress, the White House first reduced the plan to $2.3 trillion and then forced it to shrink to about $1 trillion.
The bill plans to fund existing federal public works projects while adding about $550 billion over five years to include roads, bridges, public transportation, railroads, airports, ports and waterways, improving power grids and water supply systems, and building facilities such as electric vehicle charging piles across the country.
The more than $100 billion in new infrastructure investment each year is simply not enough to have a significant effect on reviving the U.S. economy, and the end effect is likely to be equivalent to another "Hoover Dam."