The confrontation will be very tough, but the outcome is already obvious: the White House plan will be rejected, Republicans will take control of both houses of Congress in the midterm elections. "AND Joe Biden will not be re-elected: the Americans had chosen him as a man of the centre, capable of lowering the tone of political controversy, but he proved to be too sensitive to the requests of the extreme left”. Dominick Salvatore, economist and professor emeritus at Fordham University, author of "Theory and problems of microeconomics", the reference text on the international economy adopted by universities around the world, which has sold more than 800 copies, does not mince words.
The fate of the administration is sealed, he announces, streamed from the US with the Global Thinking Annual Conference Foundation which brings together in Milan a large team of "visionaries" of the economy, gathered by Claudia Segre with the aim of paving the way towards a sustainable future with the support of technology (and not against), a weapon to be played to the advantage of the weakest, starting with women. A difficult march but, as agreed by the audience of technicians who spoke about the environment, equality and fintech at the service of economic freedom, "there is no plan B".
The road to a sustainable future, warns the economist, does not include shortcuts. “The US voters – he says – in his time chose him over Donald Trump because they appreciated the program of support for the middle class and the commitment to shift the economy towards green objectives and a less polluting development perspective. But Biden has gone a long way. His proposals envisage interventions involving 20 percent of American GDP. According to critics, a real one transition from a market economy to a European welfare-based society”. A challenge to the balance of US society that the Republicans, smelling revenge, did not hesitate to take up.
Almost simultaneously with the words of Salvatore (mother from Piedmont, father from Villa Santa Maria in Abruzzo), the House of Representatives in Washington took the floor Republican Congressional Leader Kevin McCarthy who spoke for an abundant hour against the 1.850 trillion Biden plan to support the social reforms promised by the administration. “The worst law in our history”, she spelled out as she went on to pass the time and thus prevent the vote by Thursday evening. But the challenge is destined to continue unabated, as the Democratic speaker promised Nancy Pelosi. And it will be battle to the last digit. The Republicans, backed by the bipartisan budget office, to argue that the president's plan, if approved, will make the federal debt skyrocket (165 billion dollars), the Democrats to argue that the tax increase for the richest and to corporations (400 billion, more than the 207 billion calculated by congressional technicians) will be sufficient to compensate for the higher costs of the reforms.
An agreement, for now, seems almost impossible. After the defeat that led to the election of Donald Trump, the Democrats do not want to repeat the experience of overly timid management of the economy which favored the victory of the tycoon swept to success by the populist wave. But, cautions Lawrence Summers, the former Clinton-era Treasury secretary, doing so makes the opposite mistake, unleashing inflation, at least as unpopular. “The basic knot – explains Salvatore – is ideological: does America want to take the path of welfare or defend its market vision?” The last one is good, one might say given that, since the 2008 crisis onwards, the American economy has done better than the European one, ensuring higher incomes. After the war - he recalls - European income was half that of America, but in 1980 the gap was only 20 percent. Today it has widened again: a European earns 70/72 percent of the same American rank”. The reason? “An Italian worker is worth an American. Today he has the same cultural and technological tools in hand ”. Why does it make less? The gap arises from productivity, the real ball and chain of our home system, burdened by rules that do not allow the necessary energy to be discharged.
This is, however, the largely prevailing thesis in the United States which, the economist foresees, it will ultimately result in the defeat of Biden, which has gone too far. In fact, the president won the first half of the battle, i.e. the approval of the trillion-dollar package which will serve to modernize the "physical" infrastructures (roads and bridges) but also to develop wi-fi. But now comes the difficult part. “The goals are very ambitious, starting from ensuring public health for 97% of the population. But the agenda also provides for the cancellation of student debts with universities, free university for families under $125, support for children and the elderly and an increase in the minimum hourly wage to $15. Vaste programme, to quote De Gaulle. Too expensive probably, for middle-class taxpayers.
And so, explains Salvatore, prediction is easy: the reform will pass in the Chamber, where the Democrats have a large majority, but will be rejected by the Senate thanks to the contribution of the more conservative Democrats. Just like Wall Street doesn't mind.
