On Wednesday, April 28 Joe Biden for the first time addressed the joint session of the US congress after assuming charge of the President’s office. One hour and 5 minutes long Joe Biden speech was mainly focused on plans of boosting the economy after covid19 and spending on people through infrastructural development. What became the centre of Biden’s address was his remarks about the failure of Trickle Down Economics. While referring to how the US billionaires got richer during the pandemic, the President remarked, “Trickle down economics has never worked. It’s time to grow the economy from bottom up and middle out”. It appears that POTUS means what he said because he reiterated this through his Twitter handle as well.
Joe Biden Speech and Failure of Trickle Down Economy
The Democratic President wants to recover the post-covid US economy by taxing the wealth of the rich. In his address, he mentioned that he would not add to the tax burden of the middle class of the country as they were already paying enough. While talking about the measures to raise tax he stated that his administration would work on making the millionaires and billionaires pay more on their wealth and finding the loopholes that make them cheat and evade taxes. Joe Biden speech part where he talked about taxing the rich and reducing the burden on middle and lower-income classes didn’t seem to go well with GOP members as they didn’t applaud.
The President of the United States also talked about offering jobs to Americans through better connectivity. He shared his plan of providing rural Americans access to broadband in order to enable low-income people to get affordable internet options. The initiative will be headed by Vice President Kamala Harris. Biden termed it as the largest job plan after the second world war.
The Issue of Rising Inequality in the United States
Trickle-down economics is ruling the capitalist world for decades. According to this theory, capitalists and businesses are given tax relaxation to promote investment and thus growth; this, in turn, makes the investors earn profit but also creates jobs thus trickling the benefits down to the lower class. However, the rising inequality in the world in general and in the United States, in particular, has shown that Trickle-Down economics is a mere hoax. Academics from the economics discipline are debating on the necessity of taxing the rich for increment on their wealth as a strategy to distribute resources from rich to poor instead of waiting for welfare to trickle down from business owners to the workers. In most of the capitalist economies of the world giving big corporations subsidies is one of the main growth strategies.
However, the stats show that Trickle-Down economics actually doesn’t work as Joe Biden speech mentions. According to a study by Institute of Policy Studies the US billionaires saw more than 44% increase in their wealth while more than 80 million people in the US became jobless during the coronavirus pandemic. These figures are enough to prove that richer people gaining wealth doesn’t help create job for the poor.
Interestingly, despite the evident failure of the rich’s wealth translating into the welfare for the poor, there were still politicians and lobbyists who didn’t favor the idea of $2000 stimulus checks to Americans for economic recovery. Even the calls for the raise of federally mandated minimum wage of $15 per hour are facing resistance from the politicians who believe that such a raise can cause inflation in the economy.
As mentioned above the academics are skeptical about the working of Trickle-Down economics, but seeing their voices amplified in the form of Joe Biden speech gives hope regarding the overhaul of the status quo that favors the rich and exploits the poor due to the dominant neoliberal approach. If the President of the United States gets the support of Congress on implementing his wealth tax plan and boosting the small businesses then it can help address the issue of rising income inequality in America while making it easy for common Americans to pursue his/her entrepreneurial goals. However, it appears that bringing such reforms is not likely to be easy due to possible resistance from the certain factions.