I was recently listening to a podcast that brought up an interesting statistic. When the Baby Boomer generation first began to enter the American workforce in 1962, entitlement programs to assist aging populations (which includes healthcare, welfare, and government pensions) comprised 31% of government spending. The remaining budget was spent on discretionary spending, which includes national defense, transportation, education, housing, social service programs, as well as science and environmental organizations. Today, government spending has reversed, with entitlement programs representing 61% of government spending. The Baby Boomer generation reaped the rewards of a government focused on investing in the future and providing pathways to the middle class. Following this, they proceeded to shut the door and pull up the ladder for subsequent generations. Biden’s massive proposal entitled the American Jobs Plan is a $2.7 trillion dollar program designed to employ 2.1 million Americans by mid-decade, increase our global economic power, and provide new ladders for us to succeed. The entire piece of legislation is extremely wide ranging, so I will only discuss the parts I found most intriguing.
Biden’s plan includes a significant increase in investment for research and development (R&D), which includes investments in AI, advanced nuclear energy, electric vehicles, and several other fields. America is one of the only major economies whose public investments in R&D have declined as a percent of GDP in the past 25 years, with China ranking #2 in global R&D investments. An increase in American investment would improve access to higher wage careers and increase America’s global competitiveness. As America quickly progresses into a future dominated by technology and AI, Biden is also calling for a $40 billion investment in a new Dislocated Workers Program and sector-based training. This fund will support those who lose their jobs through no fault of their own, such as truck drivers replaced by automated vehicles.
A major aspect of the plan is an increase in government spending on infrastructure. According to Moody’s Analytics, in a weak economy like we are experiencing now, public investment in public infrastructure produces the greatest increase in national income compared with other types of federal government spending and tax policy. The plan contains provisions for $621 billion of spending on transportation infrastructure. Included are funds to incentivize the construction of 500,000 electric vehicle charging stations by 2030, invest $80 billion to improve American railways, and invest $85 billion to modernize public transportation.
Biden plans to pay for this by increasing the corporate income tax from 21 to 28 percent and closing various loopholes corporations use to evade paying taxes. This corporate income tax would still be around its 21st century average from before Trump’s 2017 tax law and well below where it stood before the 1980s.
The American Jobs Plan represents one of the greatest opportunities for our nation to invest in our future and maintain dominance in the global economy. Ezra Lane (junior, undeclared) commented “The topic is so complex it is hard to discuss in a student paper. It is difficult trying to explain why this is a good or a bad plan, or what the real impacts of it will be for AU students. But I believe it is necessary to discuss several positive aspects of the legislation and why it may be worth raising the corporate tax rate.” After decades of neglect, I personally believe now is the time to support America’s next generation.
The Student Movement is the official student newspaper of Andrews University. Opinions expressed in the Student Movement are those of the authors and do not necessarily reflect the opinions of the editors, Andrews University or the Seventh-day Adventist church.