Joe Biden brings America off an inflationary cliff
Charles CW Cooke
If the Democratic Party gets its way, the federal government will soon add more than $ 4.1 trillion in spending to the $ 1.9 trillion it authorized in March. Or, to put it another way: if the Democratic Party gets what it wants, the federal government will have allowed nearly 11 1/2 more in spending in the first eight months of Joe Biden’s presidency than he did. ‘spent in 2019. So much for this much-vaunted return to reason.
Democrats spend money we don’t have
Even under perfect circumstances, the frenzy proposed by the Democrats would be both unnecessary and inappropriate. The economy, which has been “boosted” extremely well over the past year, is recovering well on its own. There is no crisis in our “infrastructure”, however we define the word. With our previous spending this year, we have already passed the economy’s output gap.
And, let’s not forget, Democrats weren’t, in fact, sent to Washington with a mandate to change everything, but with an equally divided Senate, the thinnest majority in the House since World War I, and a president who won in a squeaker. If only 90,000 votes had gone the other way, it would be Republicans, not Democrats, who would control all of Washington, DC. If this were a time of plenty, the case for insanity would remain weak.
Beyond repair? Biden’s main task is to protect democracy from autocrats after Trump. Six months later, he fails.
But now? But the push is nothing less than a sustained rejection of the reality in which we find ourselves. Under the leadership of the presidents of both parties, we have just completed a colossal anti-COVID-19 spending that totaled more than $ 5,000 billion. Federal government debt, which is higher than it has ever been since World War II, is now higher than the entire U.S. economy.
If Congress did nothing at all before the end of this year, that debt would increase by another $ 3 trillion (equivalent to 13% of the entire economy). The caution of the federal government here is to do nothing. Inexplicably, Democrats are still talking about a second New Deal.
It’s not just the exorbitant cost. It is also the backdrop. For the first time in a decade, the US economy is experiencing alarming price inflation – a problem which, if compounded by an irresponsible government, will escalate into disaster. (See: Carter, Jimmy.) In June, prices in the United States rose a remarkable 5.4% – the biggest increase since 2008.
This prompted President Biden’s own Treasury Secretary Janet Yellen to predict that “we will still have several months of rapid inflation.”
Yellen’s assessment was echoed by a wide range of economists polled by The Wall Street Journal, whose collective prediction was that, at the very least, the United States was experiencing “inflation at levels never seen before. times in 1993 “.
Or worse. As one of Yellen’s Treasury predecessors, Lawrence Summers, repeatedly warned, there are serious risks associated with spending trillions of dollars in times of inflationary pressure – to the point that, if done poorly, it could cause a “scenario of economic overheating. Asked by Politico if he was more or less concerned about this prospect than he was four months ago, when Democrats spent 1.9 trillion dollars in a party line vote to adopt what he called “the least responsible fiscal macroeconomic policy we’ve had in the past 40 years,” Summers confirmed it was more.
President Biden came to the White House with an implicit and explicit promise that he would return sobriety to Washington. So far, alas, his response to unwelcome information has been to stick his fingers in his ears, change the subject, or reiterate his original premise as if it were a rebuttal.
Asked about inflation this week, Biden said “the stock market is higher than it has been in all of history” and urged lawmakers to pass his spending plans. In a ridiculous way, he then presented his huge agenda as an anti-inflationary measure that would serve as a “force to get lower prices.” “If your main concern right now is inflation, you should be even more excited about this plan,” Biden said. “We cannot afford not to make these investments.
Can Democrats Define Infrastructure?
Biden’s Panglossian rhetoric approach perfectly sums up the Democrats’ push, which from the very beginning has been intellectually upside down. As soon as the $ 1.9 trillion COVID-19 relief bill was passed in March, the Democratic Party announced that it would next review “infrastructure” – and, having decided that, then began looking for things to spend money on under these auspices. In no time, just about everything Democrats had ever wanted to do had become “infrastructure” – to the point that figures such as Senator Kirsten Gillibrand of New York began to assert without laughing that “paid holidays are infrastructure. Child care is an infrastructure. Caregiving is infrastructure.“
Beyond repair? No joke or bother: After a condo collapses in Florida, can we take infrastructure seriously?
No one should be really surprised that the President’s plan is now being sold as a magic inflation machine, given that it is also being sold like everything else under the sun. At the time of writing, the Democrats’ package is expected to include immigration reform, a universal preschool, and an expansion of Medicare – which, like the rest of its provisions, have been cynically placed under l aegis of “must-have investments” sold to the American public with a happy speech on road repair.
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This audience should take a close look at the contents of the Democrats’ bill, consider the dire financial situation we find ourselves in, and insist that, for once, the major players in Washington, DC, must take the most action. judgments available to them. : nothing.
Charles CW Cooke (@charlescwcooke) is Editor-in-Chief for National Review.