Commentary The first thing any economist should do when reading a budget proposal is to analyze the basic macro assumptions and the results presented by the administration. When both are poor, the budget should be criticized. This is the case for the Biden budget plan. Same growth; a lot more debt and less employment. According to the administration, the impact on growth of this budget will be negligible, as their own—and optimistic—estimates see no change in the slowdown of the U.S. economic growth trend. The Congressional Budget Office (CBO) estimates a 2.6 percent average real growth in GDP between 2021 and 2025, and 1.6 percent for the 2026–2031 period. This is lower than the potential real GDP growth of the U.S. economy from 2026 but driven by much higher debt—with lower employment. The CBO also expects an extremely poor job growth, with the unemployment rate at an average of 4.8 …
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