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Former vice-president and Democratic presidential nominee Joe Biden (L) and Senator from California and Democratic vice presidential nominee Kamala Harris greet supporters outside the Chase Center in Wilmington, Delaware, at the conclusion of the Democratic National Convention, held virtually amid the novel coronavirus pandemic, on August 20, 2020. (Photo: Olivier Douliery/AFP via Getty Images)

Goldman Sachs: Benefits of 'Blue Wave' and $2.5 Trillion Stimulus Outweigh Wall Street Concerns Over Tax Hike on the Rich

"As right-wing hacks predict economic disaster if Biden wins, worth pointing out that private-sector analysts are remarkably bullish."

Jake Johnson

Contrary to President Donald Trump's claim that a win by Joe Biden in November would spell economic catastrophe, a Goldman Sachs analyst told the bank's clients Monday that a so-called "blue wave" of Democratic victories next month would likely provide a substantial boost to the U.S. economy by making possible "substantially more fiscal support" in the form of Covid-19 relief, infrastructure spending, and climate legislation.

While predictably characterizing Biden's proposed tax hikes on corporations and the rich as "negative," Goldman Sachs chief economist Jan Hatzius wrote that the supposed downsides of the tax increases would be outweighed by "the boost to growth from fiscal stimulus."

Hatzius predicted a Democratic coronavirus stimulus package next year—should the party win control of the Senate and the presidency—would likely total around $2.5 trillion, significantly bigger than the $1.8 trillion package the White House is currently pushing to the dismay of many Senate Republicans.

"We expect that spending would increase the most under a Democratic sweep of the House, Senate, and White House," Hatzius wrote. "This would likely include a stimulus package in Q1 [of 2021], followed by infrastructure and climate legislation. In this scenario, we would expect legislation expanding health and other benefits, financed by tax increases, to pass in Q3."

The analysis from Goldman Sachs—which benefited handsomely from Trump's tax cuts and has continued to post massive profits even amid the coronavirus pandemic—comes after the president claimed during a campaign rally over the weekend that "the Democrats would terminate our recovery" if they win the White House and the Senate in November, repeating a warning he issued on Twitter earlier this month.

"IF YOU WANT A MASSIVE TAX INCREASE, THE BIGGEST IN THE HISTORY OF OUR COUNTRY (AND ONE THAT WILL SHUT OUR ECONOMY AND JOBS DOWN), VOTE DEMOCRAT!!!" the president wrote.

But Moody's Analytics, an economic research firm, has estimated that a Biden presidency would likely create 7.4 million more jobs than another four years of Trump.

"The economic outlook is strongest under the scenario in which Biden and the Democrats sweep Congress and fully adopt their economic agenda," Moody's Analytics economists Mark Zandi and Bernard Yaros wrote last month. "Trump has proposed much less expansive support to the economy from tax and spending policies."


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GOP 'Silence Speaks Volumes,' Says Ilhan Omar as Boebert's Bigotry Goes Unpunished

"Normalizing this bigotry not only endangers my life but the lives of all Muslims. Anti-Muslim bigotry has no place in Congress."

Brett Wilkins ·


Africans Should Be 'Applauded, Not Punished,' Say Advocates Amid Omicron Travel Ban

"What is going on right now is inevitable," said African Union Vaccine Delivery Alliance co-chair Dr. Ayoade Alakija. "It's a result of the world's failure to vaccinate in an equitable, urgent, and speedy manner."

Brett Wilkins ·


Biden Drilling Report Blasted as 'Shocking Capitulation to the Needs of Corporate Polluters'

"Greenlighting more fossil fuel extraction, then pretending it's OK by nudging up royalty rates, is like rearranging deck chairs on the Titanic," said one campaigner.

Jessica Corbett ·


UNESCO Members Adopt First Global AI Ethics Agreement 'To Benefit Humanity'

"We're at a critical juncture in history," said Ethics in Tech founder Vahid Razavi. "We need as humans to come together and decide what is the best course of action to take with these technologies before they surpass us in their abilities."

Brett Wilkins ·


Progressive US Lawmakers Mark Black Friday With Calls to Pass the PRO Act

"The right to organize, fight for better working conditions, and fair pay must always be protected."

Jessica Corbett ·

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