Stanford study: "Biden will increase unemployment and severely hurt growth" Israel today

The article, quoted in the Wall Street Journal, stated that "its policy will reduce incentives for work and investment, Americans will pay the price for a decline in living standards" • "Biden's plan will result in the loss of some 5 million jobs by 2030."

• On the way to layoffs and worsening conditions?

  New York, yesterday

  Photography: 

  AFP

While President Trump is leading the U.S. economy in the last quarter to the sharpest jump in growth ever on an annualized basis (33.1%), a new study shows the potential damage to the economy as a result of Democratic presidential candidate Joe Biden: "Severe growth, sharp unemployment and declining incomes Of the middle class. "

This is a study by the Hoover Institute at Stanford University, cited extensively in an editorial in the Wall Street Journal.

"The study is valuable because it examines policies according to their incentives and side effects," the journal's editorial said.

Photo: Reuters

According to the paper, "the consequences of Biden's policy measures will not be immediate but will bring about long-term change by raising the cost of capital, reducing the incentive for labor and investment, and reducing productivity in all sectors of the economy. Americans will pay the price for living below what they deserve."

It should be noted that two of the four researchers who authored the report serve on Trump's extended advisory team on economic issues, but as the Journal notes, the economic experts praising Biden's plans are "former Obama and Clinton administration Democrats."

Businesses will also be hurt

According to the study, if Biden implements his economic policy as it now appears on the party's platform, the economic consequences will be catastrophic for the next decade: the labor market share will fall by 3%, per capita GDP will shrink by 8% and average per capita capital will fall by 15% .

Translated to absolute numbers, this is a loss of about 5 million jobs and $ 2.6 trillion in GDP by 2030 - which will be reflected in a $ 6,500 decrease in median income.

"While these figures appear high, this is a conservative assessment of the negative implications of Biden's agenda," the study authors stated.

On the issue of taxes, for example, Biden wants to raise corporate tax from 21% today to 28% - a figure even higher than corporate tax in communist China.

Contrary to the image that corporate tax hurts "the rich", in practice 55% of businesses in the US consist of three or less employees and 99% employ less than 500 employees. The implication is clear: raising corporate tax will hurt small businesses in particular, leading to layoffs or declining stagnation In their salaries - in order to finance the new economic burden.In addition, corporate tax creates a negative incentive to start new businesses and leads to "capital flight" to places with lower corporate tax.

Photo: Reuters

The combination of all these, according to Hoover's study, will hurt more than 70% of businesses, and will be passed on to consumers - in the form of rising prices - or to employees, some of whom will be fired or suffer from worsening conditions.

While Trump wants to reduce the tax on capital from 23.8% today to 15% - Biden aims to raise it to 39.6%.

Biden also plans to raise taxes for investors with incomes of $ 400,000 a year or more.

The Democratic candidate also wants to raise the tax ceiling for high-income individuals and couples to nearly 40 percent and abolish the Trump administration's tax breaks, so that a family of four with a median income will have to pay an additional $ 2,000 a year, and a single-parent family $ 1,300.

Trump, on the other hand, wants to reduce the tax burden on middle-class families by 10%.

Green energy in doubt

In the area of ​​labor relations, Biden plans to reverse Trump's reforms to provide extensive freedom to self-employed and salaried employees so they can be exempt from payments for social rights or workers' committees.

In many cases, with an emphasis on California, this practice has created an effect contrary to the original intent, and instead of helping employees, has greatly increased the cost of their employment and led to the dismissal of many of them.

In the energy field, Hoover predicts that Biden's "green" plans will cut 1% -2% of the output of the American economy.

Biden, for example, stated that he would work to shift the U.S. economy to one based on "renewable energies" and abandon the fossil fuels currently in use (oil, gas and coal).

The problem is that it is not at all certain that renewable energies will be able to meet the task: according to Hoover's study, in order to meet Biden's program targets, per capita demand for electricity will increase by 25% by 2030 - equivalent to the cumulative increase in electricity since 1979. Nuclear triple.

At the same time, as mentioned, 70% of the fossil fuel-based electricity will be out of use in addition to 11% of the energy supply currently from nuclear energy that will not be expanded.

At the same time, according to another study, the cessation of subsidies for oil-shale oil production will hurt about a million jobs by 2022. Biden also intends to reinstate regulatory requirements lifted by the Trump administration, which cost about $ 280 billion a year.