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The pandemic has made Americans increasingly open to getting help from the government. The Biden budget aims to make the most of those feelings.

President Joe Biden today unveiled a budget proposal that would increase U.S. federal spending to levels not seen since World War II. As usual, the new president’s proposed budget has already triggered a fierce debate. But while we can expect the usual scrum over spending details, the Biden budget is an attempt to push forward and leverage a much broader ideological shift. The coronavirus pandemic has made government spending and programs significantly more appealing to Americans.

It’s something of a perfect storm. The budget arrives after coronavirus pandemic relief proved hugely popular and seemingly effective. Longer-term rising inequality and other serious social problems have created more space for pro-government voices like U.S. Sen. Bernie Sanders. Meanwhile, conservative deficit hawks have been marginalized by the rise of Donald Trump. That creates a scenario friendly to the return of big government.

David Z. Morris is CoinDesk's chief insights columnist.

But, of course, all that comes with a cost. An increasing embrace of government spending could not only lead to a long-term debt hangover, but could also fuel rising inflation. That could further increase interest in one of the major arguments for bitcoin (BTC, +1.71%): that it can act as an inflation hedge against currencies like the dollar. Rising inflation was a key factor in investor Ray Dalio’s recent endorsement of bitcoin at CoinDesk’s Consensus 2021 event this week. The idea is still relatively untested, especially in the U.S., but Americans’ shifting attitudes and Biden’s legislative agenda could create a real-world showcase of how bitcoin responds to rising government spending, debt and inflation.
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