It is indeed paradoxical that the United States of America, the world’s largest economy — $19 trillion GDP (Gross Domestic Product) – should need infrastructure like roads and bridges, waterways and broadband connection. It is indeed so.

The sad truth seems to be the leading economy is a rundown country. There are too many poor people in this rich country. President Joe Biden is no great visionary but he knows a thing or two about fixing things on the ground. It looks like that this is exactly the intention behind the US550 billion Infrastructure Investment and Jobs Act, which is making its way through the Senate and will go back to the Congress — the House of Representatives — before it becomes law. It has been a tough act of negotiation, especially in the Senate, where Democrats need to work with the Republicans to ensure the passage of the Bill. Former president Donald Trump, who lost the election last November to Biden but refuses to concede defeat, has polarised the two-party polity.

There are far too many Republicans who are in awe of the so-called charisma of populist Trump and they do not want to be seen doing business with the Democrats. So, the Republicans have been using the time-honoured delay tactics to slow down the legislative process, including the famous filibuster. The infrastructure legislation is the first part of the grand plan of Biden, and he has a bigger one of about US$3.5 trillion to spend on childcare, medical aid, education to give enough skills and purchasing power to the Americans to keep the economy humming.

There is the basic ideological divide between the Republicans and the Democrats on governance. The Republicans have always favoured low taxes, less regulation and greater room for play of market forces. This has been the Republican mantra since the days of president Ronald Reagan in the 1980s. Most Americans favoured Reagonomics because they were a little too tired of the New Deal politics set in motion by Democrat president Franklin Delano Roosevelt in the 1930s at the height of the Great Depression.

But Reagonomics has played itself out and it ended in the Great Financial Recession of 2008. After more than a decade of economic lows, America is struggling to find its feet. Biden’s big plan of governmental spending to rejuvenate physical and human infrastructure seems to be the right prescription for a socially ailing America of today. There are of course the usual dangers. One of the biggest is that of fiscal deficit, debt burden, which would fall on the shoulders of the next generation.


The Congressional Budget Office has come up with the estimate that over the next decade that the deficit could shoot up to US$256 billion. But Democrats have been arguing that this infrastructural spending would revive jobs and the economy, and it would create new tax streams for the government.

This is the classic dilemma of any economy in our times: what should be the role of the government in running the economy. Is the social spending on health and education of the citizens justified, or does it pave the way for debt-stressed government? But it has also been seen that for private enterprise to thrive, there is need for a superior education system that will lead to technological breakthroughs as well as create the skilled work force to keep the technology-driven economy going. Most private companies are both unwilling and unable to take up the responsibility of creating the social infrastructure. It is, however, clear that America in 2021 is badly in need of governmental spending on infrastructure, and a large majority, including Republican lawmakers, are convinced that the Biden plan is what America needs.