President Biden and his economic advisers keep highlighting the economic crisis Biden inherited. This narrative may only last for another month or two.

It’s true Biden took office in January amid a grueling retrenchment that has torched 10 million jobs since last March. Coronavirus shutdowns have all but wrecked the travel and hospitality industries, with retailers struggling to adapt as well. Small businesses, independent contractors and lower-income service-industry workers are suffering the most.

This is the rationalization for Biden’s $1.9 trillion American Rescue Plan, which seems likely to pass in March. Congress may not approve the entire amount, but there will almost certainly be another $1,400 check, or more, for most families and an extension of supplemental unemployment benefits. The final price tag could be around $1.5 trillion. That would boost the total amount of fiscal stimulus during the last year to nearly $6 trillion, by far the most aggressive federal response to a recession since the 1930s.

Then, the boom will arrive. A variety of indicators are beginning to foretell a surge in economic growth, and the consequences of that. Retail sales surged 5.3% in January, much more than expected. One factor boosting spending was the $600 stimulus checks that went out to most homes in early January, as part of the late-2020 stimulus bill. Business spending picked up, as well, not surprising since CEO confidence recently hit a 17-year high.

With even more stimulus cash likely to hit mailboxes soon, economists are raising their forecasts for GDP growth. From Feb. 12 to Feb. 19, the New York Federal Reserve’s estimate of first-quarter GDP growth jumped from 6.7% to 8.3%. Forecasting firm Capital Economics expects full-year real GDP growth of 6.5% in 2021, which would be the strongest since 1984. “There is no recession,” says former Congressional Budget Office Director Douglas Holtz-Eakin. “The economy is growing strongly.”

Covid vaccinations are another bullish indicator. Biden says ample vaccines could be available by July, and other health experts think herd immunity could arrive sooner. That could bring a quicker revival of the gasping parts of the economy.

Unintended consequences

It’s a legitimate question whether the Biden rescue plan is going to be too large. In addition to adding an extra trillion dollars plus to the national debt, too much stimulus can cause unintended and unwelcome consequences. There’s been a lot of discussion of whether too much fuel will overheat the economy, possibly causing excess inflation or asset bubbles. If the Federal Reserve needs to counteract such problems, it could raise interest rates prematurely, choking off a recovery before everybody has recovered.