Just three weeks after the United States Congress passed a US$1.9 trillion (S$2.6 trillion) Covid-19 relief Bill, President Joe Biden announced a US$2 trillion infrastructure plan, to be followed this month by another trillion-dollar social spending package, which will bring the total stimulus by the new administration to at least US$4.9 trillion. Mr Biden touts it as a once-in-a-generation plan, the biggest US public investment programme in half a century. Its effects, both positive and negative, could be far reaching. The eight-year infrastructure plan includes huge investments in transportation networks, buildings, utilities, research and development, and in-home care; while the social spending programme will include support for low-income groups, more generous paid leave for workers and subsidies for childcare. Whereas the US$1.9 trillion Covid-19 relief Bill was funded entirely by borrowing, the two upcoming stimulus packages will be funded by tax increases spread across 15 years - first on companies and then on high-income individuals.

Both packages will be the subject of tortuous negotiations over the coming months involving vested interests from across the political spectrum. Liberal democrats have already signalled they want even more spending, while Republicans have made clear that for them, tax increases are a non-starter. In the end, the packages, and how they are funded, could be somewhat different from what is initially proposed.