The writer is a senior fellow at Harvard Kennedy School
Joe Biden’s very first proposal as US president was to spend $1.9tn on pandemic relief, a massive programme that even Democratic stalwart Larry Summers called “the least responsible fiscal macroeconomic policy we’ve had for the last 40 years”.
Biden then gave fiscal conservatives angina by proposing to spend an additional $4tn on his American Jobs and American Families plans. While the administration’s public justification is that the risk of doing too little exceeds that of doing too much, this isn’t really about fiscal stimulus. Instead, it underscores a much larger debate about the framework we use to understand the economy and the role of policy. The Biden folks are running an experiment that could revolutionise that thinking.