Bidenomics, a term used to refer to the policy choices made by the Biden administration, is anticipated to be a significant feature in the US elections come 2024. The economic vision of Bidenomics revolves around three key pillars – investing smartly in public American projects, educating and empowering workers to expand the middle class, and promoting competition to lower costs and assist entrepreneurs as well as small businesses.
Features of Bidenomics
The approach of Bidenomics aims to enhance the USA’s physical and digital infrastructure, diminish its trade reliance on competitors such as China, elevate the living standards and opportunities for the middle 40% and bottom 50% of the US population, and stimulate job creation within its territory. To raise revenue, it proposes taller and more frequent taxation along with massive spending for investments in reducing healthcare costs and clean energy.
The Rationale Behind Bidenomics
With the collapse of Reagan’s top-down model and trickle-down approach, there was an understanding that similar initiatives could not deliver effective results, especially in mitigating the Covid crisis. Therefore, it became apparent to the US that some Post-Covid challenges were deeply rooted in the failed trickle-down theory. This led to the proposition of Bidenomics, a new economic model designed to alter the trickle-down theory based on Reaganomics.
Bidenomics: Global Influence and Concerns
The reach of Bidenomics extends beyond the borders of the US and is viewed as a model for global change. The UK’s Labour Party, for instance, is contemplating adopting a more interventionist approach. However, critics express concerns about potential challenges, like the possibility of Bidenomics triggering a global subsidy race among nations, particularly post-Covid crisis.
Efficacy of Bidenomics
Reviewing the macro indicators such as GDP, unemployment, and inflation suggest that the Biden administration has performed well. The US economy continues to produce millions of jobs at an accelerated pace, creating two vacancies for every unemployed person.
Similar Initiatives by Other Countries: Abenomics
Prime Minister Shinzo Abe of Japan implemented a similar economic policy framework named Abenomics. Its primary objective was to reinvigorate the Japanese economy which had been crippled by deflation, slow growth, and economic stagnation for several years. This involved monetary policies such as “”quantitative and qualitative monetary easing”” (QQE) to combat deflation, along with expansionary fiscal policies to stimulate demand and boost economic growth.
India’s Approach to Economic Revival
The Government of India adopted strategies combining safety-nets to cushion the impact of Covid Pandemic on vulnerable sections of society/business amid the uncertainty of the last two years. Some of these initiatives include:
– New Economic Policy: Introduced in 2020 in response to the Covid-19 pandemic, it consists of a stimulus package of Rs 20 lakh crore, equivalent to 10% of GDP, supporting various sectors and segments of the economy.
– Production-linked Incentive (PLI) Scheme: Launched in 2020 to boost manufacturing and exports in key sectors.
– Labour Codes: Four codes aiming to simplify central labour laws into four categories – wages, industrial relations, social security, and occupational safety and health.
– Atmanirbhar Bharat Mission: An economic stimulus package worth Rs 20 lakh crores to achieve self-reliance was announced.
In summary, countries across the globe, influenced by initiatives like Bidenomics and Abenomics, have been implementing innovative economic policies to address their unique challenges and pave the way for sustainable economic growth.