Biden’s administration faces tough economic challenges as jobless claims finally start to drop as most states have finally reopened. Biden may be faced with economic challenges in the near future as unemployment benefits come to an end in September. With the recent stimulus packages that have been signed and unemployment benefits continuing for a little while longer, there is reason to believe that the stock market will continue to slowly grow as we get closer to the holiday season of 2021.
Many economic experts believe that the recent relief package is playing a significant role in maintaining a balance in the prominent stock indices. The volatility in the markets doesn’t seem to exist as much as it did when the pandemic began in the first quarter of 2020.
With that being said, Biden could face some issues with the stock market in the future by signing an infrastructure plan that raises the corporate and capital gains tax rate. These types of policies could harm future growth within the stock market.
While the forecast for the stock market in the immediate future looks to be fairly positive, there could be significant issues ahead if the effects of the pandemic worsen in September when most of the extended jobless benefits run out. It’s very unlikely that congress will pass any more stimulus checks or unemployment benefits unless a major spike in coronavirus cases takes place again before the winter season starts.
While the infrastructure plan that Joe Biden wants to sign may have some short term benefits for the economy, the long term consequences could create some serious problems.
The Biden administration has been big on spending and they are struggling to find new ways to fund their agenda. Raising the corporate tax rate may offset a lot of the spending, but is it the right way to sustain long term growth and support new jobs in the recovering economy? Many moderate democrats are not willing to raise the corporate tax rate to fund a partisan agenda that receives no support from Republican members of congress.