At the White House on Monday, President Biden signed a $1T bipartisan infrastructure bill set to enable enhancements for transportation and utilities over the next five years.
Over those five years, $550 billion will be invested into both the physical infrastructure of the nation (roads, highways, and rail) as well as bringing broadband internet to areas it hasn’t been previously available.
What does that mean for the economy?
In the short term, some of the infrastructure funding will go immediately toward clearing port and transportation bottlenecks, so that might help improve supply chain issues.1 Fingers crossed.
Though it could be years before we drive across a new bridge or highway funded by the bill, some of the maintenance funds could get used in spring construction blitzes.2
Since the job market is already tight, the economy isn’t likely to see an immediate surge in hiring due to infrastructure spending; however, multiple reports suggest ~800,000 new jobs could be added by 2030, though many of them will be temporary rather than long-term jobs.
Economists don’t think inflation is likely to increase due to the slow pace of spending, though the deal is projected to add $256 billion to the federal budget deficit over the next 10 years. We shall see…????
Bottom line, analysts project long-term benefits to the economy in lower business costs, increased labor force participation, and improved competitiveness.3
The bill could create jobs in many parts of the country. Projects ranging from replacing lead pipes in water systems and upgrades to bridges will now move from the planning stages, and into the real world.
As usual, large government programs mean money for private concerns as contractors place bids and get hired for these projects.
Will your taxes go up in 2022?
That’s the question of the month on Capitol Hill as lawmakers debate the Build Back Better deal that could come with tax law changes.
We’re watching closely and we’ll update you when we know what’s likely to happen.
Before we go, we’d like to wish you and yours a relaxing Thanksgiving with great food, great fun, and great memories.