USA TODAY International Edition
Democrats’ spending plans don’t show any signs of sanity
The federal debt, higher than it has been at any point since World War II, is now larger than the entire U. S. economy
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. To put it another way: If the Democratic Party gets its way, the federal government will have authorized nearly 1 1/ 2 times more in spending during the first eight months of Joe Biden's presidency than it spent in all of 2019.
So much for that much- vaunted return to sanity.
Even in perfect circumstances, the Democrats' proposed spending binge would be both unnecessary and inappropriate. The economy, which has been extremely well “stimulated” over the past year, is recovering well on its own. There is no crisis in our “infrastructure,” however loosely one defines that word. With our previous spending this year, we have already overshot the economy's output gap.
Bipartisan fight against COVID- 19
And, lest we forget, Democrats were not, in fact, sent to Washington with a mandate to change everything, but given an evenly divided Senate, the slimmest House majority since World War I, and a president who won in a squeaker. Had just 90,000 votes gone the other way, it would be the Republicans, not the Democrats, who would control all of Washington, D. C. Were this a time of plenty, the case for a splurge would remain weak.
But now?
Now, the push represents nothing less than a sustained rejection of the reality in which we find ourselves. Under the stewardship of presidents of both parties, we have just finished a colossal anti- COVID- 19 spending spree that totaled more than $ 5 trillion. The federal government's debt, which is higher than it has been at any point since World War II, is now larger than the entire American economy.
Were Congress to do nothing at all before the end of this year, that debt would still grow by an astonishing $ 3 trillion ( equivalent to 13% of the entire economy).
The prudent course for 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's the backdrop, too. For the first time in a decade, America's economy is experiencing alarming price inflation – a problem that, if worsened by irresponsible government, will spiral into catastrophe. ( See: Carter, Jimmy.) In June, prices rose in the United States by a remarkable 5.4% – the largest increase since 2008.
This prompted President Biden's own Treasury secretary, Janet Yellen, to predict that “we will have several more months of rapid inflation.”
Yellen's assessment was echoed by a wide array of economists surveyed by The Wall Street Journal, whose collective prediction was that, at the very least, the United States is in for a couple of years of “inflation at levels last seen in 1993.”
Or worse. As one of Yellen's predecessors at the Treasury, Lawrence Summers, has warned repeatedly, there are serious risks associated with spending trillions during a time of inflationary pressure – to the point at which, if it is done wrong, it could cause an “economic overheating scenario.” Asked by Politico whether he was more or less concerned about this prospect than he was four months ago, when the Democrats spent $ 1.9 trillion dollars on a party line vote to pass what he called “the least responsible fiscal macroeconomic policy we've have had for the last 40 years,” Summers confirmed that he was more.
President Biden ran for the White House with the implicit and explicit promise that he would return sobriety to Washington. Thus far, alas, his response to unwelcome information has been to shove his fingers into his ears, to change the subject, or to reiterate his initial premise as if doing so constituted a rebuttal.
Asked about inflation this week, Biden said that “the stock market is higher than it has been in all of history” and encouraged lawmakers to pass his spending plans. Ludicrously, he then cast his enormous agenda as an antiinflationary measure that would serve as “a force for achieving lower prices.”
“If your primary concern right now is inflation, you should be even more enthusiastic about this plan,” Biden said. “We can't afford not to make these investments.”
Biden's Panglossian rhetorical 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 back in March, the Democratic Party announced that it would look at “infrastructure” next – and, having decided that, it then began to look around for things to spend money on under those auspices.
What’s infrastructure?
Before long, pretty much anything that the Democrats had ever wanted to do had become “infrastructure” – to the point at which figures such as Sen. Kirsten Gillibrand of New York started to claim with a straight face that “paid leave is infrastructure. Child care is infrastructure. Caregiving is infrastructure.”
Nobody should be truly surprised that the president's plan is now being sold as a magical inflation- fighting machine, given that it's being sold as everything else under the sun, as well. At the time of writing, the Democrats' package is set to include immigration reform, universal prekindergarten and an expansion of Medicare – all of which, like the rest of its provisions, have been cynically placed under the umbrella of “much needed investments” and sold to the American public with happy talk about fixing the roads.
America should take a close look at what's in the Democrats' bill, consider the dire fiscal situation we're in and insist that, for once, the major players in Washington, D. C., must take the most judicious action that is available to them: none.