This column has been arguing since January that President Joe Biden could succeed by doing nothing to disrupt a rebounding economy. To date he hasn’t chosen to pursue this strategy but today brings fresh hope that Mr. Biden and the country can thrive in the months ahead.
For one thing, taxpayers are enjoying a glimmer of hope that they might be spared a pending Beltway goring. Tony Romm, Seung Min Kim and Ian Duncan report in the Washington Post:
Negotiations between Senate Democrats and Republicans over a roughly $1 trillion infrastructure package appeared to be in political jeopardy on Monday, as lawmakers continued to feud publicly over how to dole out the money and finance the new federal spending…
Lawmakers must still sort through lingering disputes over how to spend billions of dollars to upgrade the country’s railways, for example, along with thorny policy issues around broadband spending — including efforts by Democrats to ensure Internet access is affordable.
Both sides also have failed to come to terms on the formula for doling out money to improve the nation’s highways, as well as the exact funding available for water improvements. And lawmakers remain at odds over provisions sought by Democrats that aim to ensure any federal spending to improve infrastructure will pay workers prevailing wages to do the job.
Let’s hope that lawmakers continue to agree to disagree. Bolstering the argument that Washington should do no further harm to U.S. prosperity, last week brought another reminder that, despite Mr. Biden’s claims, the country was in no need of rescue when he took office. The economy had been recovering for most of a year. The Journal’s Hannah Lang and Bryan Mena reported:
The U.S. officially climbed out of a recession in April 2020, concluding a pandemic-driven economic contraction that lasted two months, making it the shortest on record.
The announcement Monday from the National Bureau of Economic Research also marks April as the official start of the economic recovery from the initial shock of the coronavirus pandemic last spring, which triggered widespread business and school closures, a steep drop in demand for services and record job losses.
As for the risk of another shock from Democrats’ partisan tax-and-spend plan to be enacted on top of any infrastructure deal, Don Luskin at TrendMacrolytics sees an encouraging message in the markets.
What has seemed puzzling is that rip-roaring stocks suggest a vibrant economic future, while very low bond yields often signal slow growth ahead. Mr. Luskin first addresses these seemingly mixed signals: