As the new u.s president, joe biden has already begun, enacting some major policy changes to the u.s economy. As some of you already know, he planned to increase the corporate tax rate capital gains tax rate and enact a minimum tax rate on corporate booked income. While these changes have immense implications, biden just announced a new deal that will literally go down in the history books as one of the most important changes of all time. In this video i will cover biden's groundbreaking spending plan and how major changes are coming, which actually includes the potential for a fifteen thousand dollar tesla.

Welcome to caskins academy, if you're new to the channel, please consider subscribing for more content like this and let's get right into it, regardless of the respective political party. Today, all politicians are naturally incentivized to increase government spending, because politicians are voted into office by advocating for change in order to change the u.s economy. Politicians need money and biden is a prime example of this. Joe biden recently proposed a shocking 5 trillion dollar budget that he plans to spend over the next decade.

If this goes into law, this will be the highest amount of spending as a percentage of the us economy. Since world war ii on the tax side, biden's plan is estimated to add 3.6 trillion dollars to government revenue. However, even when accounting for this, the government sells a net deficit of 1.4 trillion dollars. In other words, the u.s government is going to add 1.4 trillion dollars to its debt.

As a result of biden's spending plan in 2022 biden is looking to spend six trillion dollars before leveling down spending later this level of debt is unprecedented by 2024, the u.s debt, as a percentage of the gdp, will reach the highest level in american history. That's right! A record high debt level even higher than the previous world war ii debt record. The result of this is that interest rates will increase as a result of additional government borrowing. This is because, when the government borrows money, they increase the demand for loans, which increases interest rates.

Higher interest rates hurt growth stocks than most because growth-oriented companies have to borrow more money than value-oriented companies, and this is to maintain their growth rates. David sachs, the ceo of one of the largest venture capital funds in the world, recently explained the adverse effects of government spending on the all-in podcast uh. So when you have a federal spending as a percentage gdp around 20, it works right and that doesn't mean you can't increase government spending. It just means that government spending will increase as the economy gets bigger, but what you have now is federal spending over 30 percent of gdp and everything is starting to break.

That's the problem very, very big problem and, of course, and that's why we're all getting red pill right? How many people in silicon valley, frankly, who make a living off growth stocks, are now starting to scratch their heads going gee? What did i vote for? As sax mentioned, government spending is usually around 20 of the us gdp. However, with biden's plan, this is going to increase dramatically in this image. The blue line represents biden's budget. On the right hand, side you can see that biden's spending plan will drastically increase spending compared to current projections, especially in the next couple of years, while growth stocks are likely going to be hit by biden's spending plan, certain growth stocks may explode and by that i'm Talking about eevee stocks in particular biden's clean energy for america act is proposing some stupendously major changes to the eevee industry.

This act has already passed through the senate finance committee with the 14 to 14 vote, but hasn't passed through the senate in-house. Yet previously all automakers got a 7 500 tax credit for up to 200 000 vehicles. Biden is looking to extend the 7 500 tax credit and remove the cap on the number of vehicles. It can be used for the only automaker that was actually using this tax credit at high volumes was tesla, so removing this cap dramatically benefits tesla.

Moreover, biden plans to add an additional 2 500 tax. Credit for all electric vehicles manufactured in the us biden is also looking to add a 2 500 tax credit for evs produced by union workers, which mainly only benefits legacy automakers in total. If this act passes, people will be able to purchase electric vehicles at up to a twelve thousand five hundred dollar discount. As long as that vehicle is under eighty thousand dollars for tesla vehicles in particular, there will be a 10 000 tax credit for all vehicles.

That is a massive discount and will definitely boost demand for evs by a substantial amount. Tesla is already supply constrained and this new act would create even more restraint on tesla's supply chain. Elon musk has been talking about a 25 000 tesla for quite a while now and rumors have it that it's going to be revealed as soon as the end of 2021. If biden's plan passes through congress, this tesla could be as low as fifteen thousand dollars.

Imagine purchasing a tesla vehicle for fifteen thousand dollars. This is going to break the entire playing field for evs. A lot of legacy. Automakers and new electric vehicle manufacturers are starting with high priced evs, and this is totally fine, because that is what tesla did at first.

With the roadster with other companies such as gm and lucid, the hummer ev starts at 80, 000 and the lucid air starts at 77 500. However, because of these tax credits, tesla will now be able to benefit tremendously through high percentage decreases in prices and, as a result, a high volume of sales, while other automakers only get marginal decreases. Not only that, but only the cheapest versions of the lucid air. In the hummer, ev even meet the criteria for the tax credit.

Because of this it will be a lot harder for newer companies in the ev space that haven't mastered the economies of scale and had to resort previously to charging higher prices to grow. In this new setting, so while this benefits the eevee market as a whole, it really primarily benefits tesla. This is because, if this build passes, while tesla is expanding and opening its new factories, then tesla may continue to be supply constrained for years to come, essentially over the course of a few years, tesla may be getting a 10 000 tax credit per vehicle for 5 Million vehicles, whereas legacy auto as a whole, could be receiving a 12 500 tax credit for only 500 000 vehicles. In that scenario, tesla's customers would receive 50 billion dollars, whereas legacy auto would only receive 6.25 billion dollars.

That kind of funding is groundbreaking for tesla, as tesla scale and lower price level may allow to gain disproportionate amounts of government funding. If passed, this new axe would come into play for all electric vehicles that were purchased starting from may 24 2021. So even people who purchased evs recently could still obtain this huge eevee tax credit. If this bill is successful, eevee stocks will definitely generate massive returns over the next few years.

You might be wondering how biden is going to spend 5 trillion in addition to the climate change bill. The biden plan also includes 200 billion dollars for free preschool for all three and four-year-olds and 109 billion dollars for free community college for all americans. Furthermore, the binding plan includes 225 billion dollars for child care, 100 billion dollars for research and development, 52 billion dollars for semiconductor production, 225 billion dollars for national family and medical leave and 200 billion dollars for a continuation of obama's health care law. Lastly, biden is also looking to spend 36.5 billion dollars for schools in low-income areas, which is 20 billion dollars higher than the current spending rate.

All of this spending hasn't been approved by congress, but the odds are in biden's favor, because democrats control both the house and the senate. Now there might be one thing on your mind right now: the buying plan may lead to higher inflation, especially considering the massive budget deficit in spending levels. Biden claims that the average inflation rate over the next decade will be roughly 2.3 percent, but of course, critics are skeptical of this on one side. Some think that the buying plan will make the u.s more competitive internationally, whereas others think that the biden plan is a waste of tax money and creates a deficit and inflationary problem.

The u.s secretary of commerce, gina raimondo, stated that biden's jobs plan is all about competing with china. Improve our education system, improve our infrastructure, invest in manufacturing. The way to compete with china is to run faster to invest in america. In terms of defense, we haven't slowed down, we're going to do what we need to do to protect american industry.

In my opinion, biden's job plan is going to help the us economy grow in the short term, but it could almost guarantee adverse effects, such as inflation, higher interest rates and an increase in the us debt levels. Let me know what you think in the comment section below: do you think the biden plan will stifle innovation or do you think biden's plan is necessary for us growth in competing with china? If you enjoyed this video, please hit the like button and subscribe and i'll see you in the next one.