The strength of the U.S. economy points not only to recovery from the depths of the pandemic, but also expansion above pre-pandemic levels. Forecasts are for GDP growth above 6% for this year—the growth rate in the first quarter alone was a phenomenal 6.4%. In a widely held view, JPMorgan Chase JPM -0.9% CEO Jamie Dimon stated in his recent shareholder letter that “the U.S. economy will likely boom,” which could “easily run into 2023.”
Even as the economy gains significant momentum, there are other forces: the Biden administration’s $2 trillion infrastructure plan, a plan to cut greenhouse gas emissions in half by the end of the decade, along with proposed corporate tax increases, from 21% to 28%, plus a minimum corporate tax.
The question is how these forces will net out for the economy over the long term. Will they cause the expansion to stall? Or could these plans and initiatives result in both greater efficiencies and new economic opportunities?