Bipartisan Infrastructure Bill to Give ‘No Significant’ Boost to Economy: Wharton Study

An expert analysis shows that the $1 trillion bipartisan infrastructure bill now winding its way through the Senate would have “no significant effect” on economic growth, delivering a counterpoint of sorts to the White House view that the deal “will generate significant economic benefits.” The University of Pennsylvania’s Penn-Wharton Budget Model (PWBM), released Aug. 5, found that the infrastructure proposal “would have no significant effect on GDP by end of the budget window (2031) or in the long run (2050).” At the same time, the Wharton model predicts the proposed bill would raise government debt by 1.3 percent in 2031 relative to baseline, with the impact tapering somewhat to 0.9 percent above baseline in 2040 and 0.6 percent in 2050. While higher public capital from the package would boost worker productivity, the benefit is offset because higher government debt crowds out additional private investment, leading to a drop in productive …Read More

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