Deficits and debt will dominate the political conversation. The new Republican-controlled House is more fiscally hawkish than its predecessor and is determined to deny Biden any substantive legislative successes ahead of the 2024 presidential election, in which he is a probable candidate.
Large-scale human capital investment, which was cut from the infrastructure bill, will remain unattainable for Biden.
Even USD2tn of investment in infrastructure and competitiveness will not be transformative when spread over 50 states over ten years.
Some provisions on green energy and corporate taxes are vulnerable to being rescinded by future administrations and Congresses.
A divided Congress will oblige Biden to push his economic agenda through executive actions even more than in his first two years.
Unlike the debt issued to fight the Second World War, today's debt will not be paid off during the lifetime of the generations incurring it.
