• The latest stimulus effort isn’t just notable for its size. The money is targeted toward the households that need it the most, including the long-term unemployed and lower income families.
• This relief, especially if followed by an infrastructure bill, could produce winners on Main Street and Wall Street.
• Consumer spending is likely to surge, particularly as families receive stimulus payments and enhanced child tax credits.

There is a titanic shift taking place in fiscal policy, and it doesn't have only to do with the size of the many relief and stimulus packages that have passed since the start of the pandemic.

The Biden administration has rapidly shifted from 40 years of supply-side "trickle-down economics" to demand-side "bottoms up budgeting," aiming all its fiscal firepower at the lower end of the socio-economic ladder.

Amid all the hand-wringing over the size of the package, the funds going out over the course of the next year will go almost exclusively to those who need them most – the long-term unemployed, middle- and lower-income families, women and people of color – all of whom have been adversely and disproportionately affected by the pandemic.

There are critics of the latest package, among both Democrats and Republicans alike.

They claim that it is much too large, addresses issues not directly related to Covid or may cause the economy to overheat and accelerate inflation.

By the way, there were no such criticisms among the GOP of the Trump tax cuts, which were passed when the unemployment rate was near a historic low of 4.1%, when growth was stable and 65% of the benefits accrued to the top 1% of all citizens.

While that stimulus was more likely to cause economic overheating and inflation, it didn't – except in asset prices.

True, the unemployment rate fell to a record low, but that was a move from 4.1%, as stated, to 3.5% at its low point.

Today, the Federal Reserve suggests that the real unemployment rate is roughly 10%.

Some 50 million Americans are facing food insecurity, and 19 million are receiving unemployment or pandemic assistance. Eight million people have fallen into poverty at the fastest pace in modern economic history.

Tax cuts – or a smaller package – would do nothing to address the economic ills that have infected the economy over the last 12 months.

Critics also miss the fact that the failure of 400,000 small businesses doesn't simply represent lost wages, but lost wealth, as the equity value of those "mom and pop" shops has been permanently erased.

Help most definitely must be on the way.

A benefit for Main Street and Wall Street

If stimulus relief is followed by a serious infrastructure package, including tax incentives for reshoring manufacturing and buying American – all of which were stated priorities of the prior administration –it is possible that we will see a replay, of the 1950s and 1960s. Back then, booming economic growth and prosperity were most evenly shared.

Additionally, what is good for Main Street will be good for Wall Street, despite current concerns to the contrary.

There will be different beneficiaries on Wall Street as a result of this seismic shift in policies, some of which have already been recognized.

Stocks like Caterpillar and Deere have already begun to discount coming spending on roads, bridges and tunnels.

A forward-looking infrastructure build-out will further facilitate technological advancement in electric vehicles, autonomous vehicles and tele-medicine.

Meanwhile, additional broadband deployment will enhance communications capabilities and create higher paying jobs.

Consumer discretionary spending is likely to surge, especially among those who are getting stimulus checks and larger child tax credits. Retailers that cater to lower income individuals may see boom times ahead.

Think Target over Tiffany.

After 40 years of fiscal policy providing outsized benefits to the financial economy and the top 10%, it may well be time for a new approach.

Yes, I worry about deficits and debt. I have some concerns about the risk of rising inflation. Having said that, the risk is worth the potential reward.

Critics may call this epic policy shift "socialism," a progressive experiment, or overkill.

Leaving issues of equity out of the economic equation, I would argue that this policy shift is simply enlightened self-interest in the spirit of Adam Smith, Henry Ford or Milton Hershey.

They all understood that a thriving capitalist economy requires a rising tide to lift all boats, even if it only means that everyone can afford to buy the products that they themselves produced.