Biden’s economic recovery plan parallels ‘New Deal’ during the Great Depression, says expert
President-elect Joe Biden’s plans for economic recovery and reform show many parallels to the political climate during the Great Depression and President Franklin D. Roosevelt’s inaugural speech that outlined plans for economic stimulus with the ‘New Deal,’ says Virginia Tech economist David Bieri.
“The parallels to Biden’s inauguration events in D.C. are obvious and so much is at stake today as it was during the Great Depression,” says Bieri. “History books have recorded the handover from the Hoover to the FDR Administration as transitioning from one of the worst presidents in U.S. history to one of its best. It marked much more than a symbol of democratic continuity at a time of profound economic uncertainty--it was a paradigm change so powerful that it would usher in a radical new era for U.S. public policy.”
“Biden’s historic $1.9 trillion economic rescue plan announced last week is replete with elements where a judicious balancing of recovery and reform will be of the utmost importance,” says Bieri. “His most powerful tool for economic policy will not depend on Congress’ power of the purse - but in the words of British economist John Maynard Keynes’ advice to FDR - on ‘the comfort to men’s minds through a restoration of their faith in the wisdom and the power of Government.’”
David Bieri is an associate professor in the School of Public and International Affairs and an associate professor of economics. He also holds an appointment in the Global Forum on Urban and Regional Resilience. His teaching interests are at the intersection of public finance, monetary theory and history of economic thought. He has held various senior positions at the Bank for International Settlements in Basel, Switzerland. Prior to his work in central banking, he worked as in investment banking in London and Zurich. View Bieri’s full bio.
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