US President Joe Biden has labelled his US$1.9 trillion economic recovery package the American Rescue Plan.
The package pays US$1,400 to low paid American workers and members of their family, extends welfare payments including health insurance coverage alongside other relief measures targeting individuals and families.
Passed without support from the Republicans, it also invests heavily in ramping up the country’s COVID-19 vaccination programme and makes massive investments into the economy with extensive business support and job-creating projects.
Significantly, the historic trillion dollars spending bill will have repercussions far beyond the shores of the United States, according to experts.
That is evident from analysis of the package and its associated COVID component which focuses on a revamped vaccination campaign.
The implications for the US and the world economy has been occupying the attention of the leading global economists and the media.
According to the UK’s Financial Times, the plan has “boosted expectations for growth and inflation in the US and around the world.”
The highly-respected business publication also points out that the Biden plan has pushed borrowing costs sharply higher, which it says is “a boon to banks that had languished as central banks cut interest rates last year to prop up economies after the collapse in output caused by the pandemic.”
On the markets, the FT says that “investors have also stampeded into sectors such as materials, commodities, consumer goods and industrials in recent weeks, sending prices higher.”
The Guardian, another leading UK publication, reports that the Biden plan “lays the ground for a US economic bounce-back that would have seemed unthinkable last year, but which will now be felt around the planet.”
It refers to the intergovernmental Organisation for Economic Co-operation and Development, saying that America is set to be the only one of its member states whose economy will be larger at the end of 2022 than the OECD was predicting before the pandemic.
“For a time this year, the US is expected to grow faster even than China, which has not happened for years,” it adds while noting that “this involves some economic risk – though slack in the US economy ought to restrain inflation.”
Meanwhile, in its reporting and analysis, the BBC notes that “Joe Biden just notched his first legislative victory.”
It says “Now that the $1.9tn Covid relief bill has cleared Congress, the new administration will have a firehose of money to fight the economic and social consequences of the pandemic.”
The UK’s international broadcaster however says that “how effectively and efficiently Biden's team distributes that aid will go a long way toward determining the success of its first term.”
“This massive relief package, which provides record amounts of support for low-income families, is a significant accomplishment. Democrats have a lot of work to do if they want any more such wins,” it adds.
The American network CNN points to the global impact of the Rescue America Plan as part of its coverage.
Looking at how the plan was expected to stimulate the economy in the aftermath of the pandemic, CNN draws a comparison to China’s explosive growth rate.
“The last time the two countries' growth rates were even somewhat close was during the dotcom boom. In 1999, the roaring US economy grew at 4.8% and China expanded at 7.7%,” CNN reported referring to the World Bank.
The United States hasn't surpassed China's GDP growth pace since 1976, World Bank statistics show.
“Still, 2021 looks to be the year when the United States replaces China as the biggest growth driver on the world stage, at least temporarily,” CNN said.
It also reports that the US economic outlook is getting a boost from progress in defeating the pandemic, saying “the acceleration in the roll-out of vaccines, along with plunging deaths and cases, is raising hope that health restrictions depressing the economy could be lifted earlier than expected.”
Here in Cayman, the US economic recovery will also be a key factor - especially for the tourism industry and its affiliated services - as the jurisdiction charts its way out of the slowdown caused by the pandemic.