A global pandemic-related economic crisis has seen the US government allocate record-breaking amounts of direct subsidies into the economy to support business and those who lost employment. What can we expect from the US economy amid huge budget spending that could, according to some, create a budget deficit and an increase in debt?
JPMorgan Chase chief Jamie Dimon expects the US economy to grow steadily, with moderate increases in inflation and interest rates, thanks to excess savings, mass vaccination and the possibility of huge infrastructure investment, he wrote in a letter to bank shareholders published on Wednesday.
“I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more [quantitative easing], a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the US economy will likely boom,” he predicted, adding that growth may last till 2023.
According to Dimon, it will depend on “the quality, effectiveness and sustainability of the infrastructure and other government investments” that should be “spent wisely” and with “extraordinary discipline.”
Dimon also commented on US President Joe Biden’s controversial $2.3 trillion infrastructure plan, called reckless by some in the GOP, as the plan goes far beyond infrastructure, including ‘green’ economy and educational initiatives, while money needed to modernize roads, bridges, ports, airports, underground water systems and broadband is comparatively far less.