Republicans are rediscovering the dangers of budget deficits | Jeffrey Frankel

The party has done the same thing every time a Democrat has won the presidency

High among the US president Joe Biden's many priorities is reinvigorating an economy that - judging by the latest employment numbers - appeared to be slowing as 2021 began. Even if Covid-19 abates during the course of the year, and pent-up consumer demand kicks in, the US faces immediate challenges in areas such as education, infrastructure investment, state and local finances, and especially the fight against the pandemic itself.

Biden has thus announced a $1.9tn (1.4tn) American Rescue Plan". Moreover, he is rare among successful US presidential candidates in having stated honestly during the campaign that his spending would continue the recent trend of record budget deficits, notwithstanding his plans also to raise taxes on the wealthy. Most economists approve of this fiscal expansion, in light of the US's still-high unemployment, low inflation and very low interest rates.

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