Bidenomics

Bidenomics is different, we are beginning to notice. Just keeping score in the trillions of dollars takes some getting used to. But some key rules have changed, too. Modern Monetary Theory holds that even massive borrowing at very low interest rates is almost free. The debt will be rolled over anyway, not paid back. So why not Go Big in Building Back Better? Inequality has been recognized as a deadly disease, to be treated by politics as well as policy. That’s new. Economics, on its recent record, has been cut down to size: it’s the dismal science again, not the promise of salvation. The name of the game is to isolate Republicans and head off a Trump revival.

Adam Tooze and Steven Pearlstein.

The deeper we get into Bidenomics, the more it feels bigger than Joe Biden and broader than economics. It feels new – even for Biden, who was a wobbly liberal centrist Democrat for so many years in the Senate. The new buzzword is “transformation” at the FDR scale. For a shut-down economy fighting back from COVID, Biden’s rescue plans are denominated in trillions here, trillions there. Total debt is running into real money, but the new doctrine is “don’t sweat the debt.” Borrowing is almost free. Barack Obama’s caution is gone; so is Bill Clinton’s war on big government. When the habitat is melting, you need better government, maybe more of it. For our guest, the economic historian Adam Tooze, the key question may be whether the fever dream of Reagan tax cuts and austerity has been broken at the level of popular politics. Are we ready for a new notion of the public good and a different way to get there?