How could Biden’s policies affect the US economy?

Contentworks Agency
4 min readNov 16, 2020


Well, we think we can safely say that the US election is done and dusted. Maybe. Come the 20th January, Joe Biden, the 46th POTUS should be parked at the Resolute desk, starting to work on putting his election promises into action. But what are they exactly? And how could they impact the US economy? Today, we’ll briefly try to answer those questions. After that, we’ll hit you with a rundown of this week’s most important trading events.

Biden’s masterplan

Here’s a run-through of some of Joe’s policies.

#1 Tax

Biden doesn’t intend to raise individual taxes on anyone earning less than $400,000 a year, which is more than 90% of the taxpaying public. He will, though, reverse the 2017 tax cuts for those earning more and increase the Corporate Tax rate from 21% to 28%.

This policy is about as anti-Trump as you can get (Trump took Corporation Tax from 35% to 21% during his term in office).

Whether or not income tax cuts are good for the economy is a matter of opinion. Some believe that lowering income tax means that people have more cash to spend on stuff, thus strengthening the domestic economy, assuming they “buy American”. Others believe that tax cuts can lead to a reduction in government services, which the majority of the population rely on. That’s obviously not a good thing.

Biden aims to fill this gap with a significant rise in Corporation Tax. This is all well and good, but put that level too high and corporations will start looking elsewhere to avoid paying, the knock-on effects of which would be catastrophic for the economy.

It’s a delicate balance and only time will tell if Joe gets it right.

#2 Government spending

Biden has promised a $2 trillion spending package to build out “a modern, sustainable infrastructure and an equitable clean energy future.” Clean energy and infrastructure companies will be happy to hear this news and their stocks should remain quite buoyant as a result.

#3 Jobs

Biden has vowed to do “whatever it takes” to extend small business loans and increase direct payments to families. He’s promised an additional $200 in Social Security payments per month, (reversing Trump’s cuts there). He’ll also raise the federal minimum wage to $15 an hour.

He’s also said that his administration would invest $300bn in US-made materials, services, research and technology.

All of these things should have a positive effect on a heavily COVID-hit economy, however the pressure will be on from day one to ensure the impact is large and sufficiently “builds back better.” If progress is slow, more and more people will point to that ever rising national debt, which currently stands at a staggering $27 trillion.

#4 Foreign Trade

This is one thing Joe didn’t really touch on too much while campaigning. It’s reasonable to suggest that Biden will be more open to cooperation with traditional Western allies in Europe and North America than his predecessor was.

The biggest impact could be with China. Will Biden continue the hard-line that Trump took? Get this one wrong and the consequences will be dire.

Other factors to watch out for

What we just experienced was one of the most heated and contentious US Presidential races in living memory and it should now be all over. However, President Trump has yet to concede the race and there is still speculation over electoral fraud.

Set this against the backdrop of a country at the epicentre of an impending economic crisis brought about by enforced lockdowns and the atmosphere of uncertainty is potent. The increase in government debt from coronavirus stimulus packages is mighty. Congress has released an eye-popping $4 trillion in economic relief, the largest aid package in modern history. This will hopefully help in the short term, but could also put downward pressure on the Buck.

One thing is certain, Joe certainly won’t have an easy 4 years!

What’s going on this week?

We recommend keeping an eye on the following events.

Monday 16th November

● Japan will announce its preliminary annual GDP growth for Q3 (JPY)

Tuesday 17th November

● The US is due to update us on its MoM Retail Sales (USD)

Wednesday 18th November

● Happy Inflation Rate day! We’ll be getting YoY inflation updates from the UK (GBP), Europe (EUR) and Canada (CAD)

Thursday 19th November

● The RBA will fill us in on the monthly employment situation in Australia (AUD)

Friday 20th November

● Japan’s a couple of days late to the party, but they’ll announce their YoY Inflation Rate for October (JPY)

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Speak soon,

The Contentworks team



Contentworks Agency

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