From last November’s US$1.2 trillion ($1.66 trillion) infrastructure bill, which promises upgraded American roads, bridges and broadband, to the recently enacted CHIPS and Science Act, which will allocate more than US$52 billion to boosting the American semiconductor industry, major economic legislation is the order of the day in America. And we may soon be able to add the Inflation Reduction Act (IRA) — now headed to the House, after passage by the Senate — to that list.
In the current polarised political environment, shaped by zero-sum mindsets, such breakthroughs could almost be considered miraculous. The reversal of an extended period of past underinvestment is striking. (Though not directly related to the economy, the first gun-control legislation to make it through Congress in nearly 30 years also deserves mention here.) Commentators have certainly been quick to tout them as victories for US President Joe Biden and the Democrats, with many observers wondering whether they will help turn the tide in November’s midterm elections.
Whatever their political implications, the infrastructure bill, the CHIPS Act, and the IRA amount to a stunning increase in long-term investment in America’s growth potential and in balancing out the various dimensions of its growth pattern, prominently for carbon dioxide emissions reduction and sustainability.