US infrastructure - $2.3 trillion is not enough
Last week the White House released details of its long-awaited infrastructure spending plan, to be known as the American Jobs Plan (AJP). When rumours first started to circulate about the plan it was thought it would be worth around $1 trillion. However, last week’s announcement outlines proposals for spending $2.3 trillion over the next eight years, equivalent to about 1% of GDP per year or about 10.5% of 2020 nominal US GDP. For reference and to give a sense of scale, the Congressional Budget Office’s latest projections from February 2021 anticipate spending about $6.4 trillion and $4.5 trillion on defence and Medicaid respectively over the next eight years. In this Macro Flash Note, Daniel Murray summarises the main elements of the AJP and assesses whether it is enough to address America’s infrastructure needs.