Is it fair to call Biden's $3.5 trillion plan another New Deal?

[Uncle Joe]

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President Biden’s $3.5 trillion reconciliation package would expand Medicare, combat climate change and offer free public prekindergarten and community college while boosting federal safety-net programs. At first glance, its price dwarfs era-defining social programs like Franklin D. Roosevelt’s New Deal, which cost around $324 billion in today’s dollars, and Lyndon B. Johnson’s Great Society, which cost around $520 billion in today’s dollars. Barack Obama’s American Recovery and Reinvestment Act cost around $943 billion while the Affordable Care Act was pegged at around $1.1 trillion through 2019, adjusted for inflation.

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But while the reconciliation package looks colossal by those standards, its passage wouldn’t guarantee Biden a legacy on par with those transformative social programs. His predecessors led a smaller country with a smaller economy. Even after adjusting for inflation, the U.S. economy is more than 20 times bigger than it was in 1934 and five times bigger than in 1964, thanks to a population that has more than doubled as well as factories and offices that produce far more than their Depression-era predecessors.

Every dollar in spending FDR and LBJ proposed was much larger relative to each taxpayer’s income, making costly legislation harder to pass. So rather than adjusting for inflation, many economists compare historical spending with the size of the economy (GDP). In an average year from 1934 to 1940, New Deal spending was equal to 2.8 percent of all goods and services sold in the United States. The Great Society averaged about 0.9 percent a year, while Obama’s plans combined averaged around 1 percent of GDP. Biden’s plan comes in around 1.1 percent of the economy for an average year from 2021 to 2031 — 2.1 percent if you include the American Rescue Plan and infrastructure bill.

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Overall social spending has increased steadily over the decades as the population ages and incomes rise, regardless of who is in power. The president’s opening bid for reconciliation spending is in line with that long-term trend. The contents of the bill may well be revolutionary, but the price tag, which so far has attracted the lion’s share of the attention, isn’t.

https://www.washingtonpost.com/business/2021/10/02/joe-biden-new-deal-infrastructure/