What Is The Democrats’ $6 Trillion Budget Buying Us?
Our principled limited government constitutional conservative friends at Americans for
Limited Government posted a must-read article dissecting the state of the federal government’s deficit and its unprecedented growth over the past three years.
As the article by Robert Romano documented:
The annual budget deficit has already hit $1.9 trillion and counting for the fiscal year that will end in September, according to the U.S. Treasury’s April statement, and it will reach as high as $3.6 trillion this year, says the White House Office of Management and Budget (OMB). Comparatively, in 2020, the deficit totaled about $3.1 trillion for the entire year.
This comes amid the massive government spending in response to the Covid pandemic, including the $2.2 trillion CARES Act in March 2020, the $900 billion phase four legislation in Dec. 2020 and then President Joe Biden’s additional $1.9 trillion Covid stimulus bill in March 2020. Another $2.1 trillion infrastructure plan is in the works. And now, Biden is offering his $6 trillion budget, which will blow another $1.8 trillion hole in the deficit in 2022.
Unfortunately for fiscal hawks, wrote Mr. Romano, the easy money from the Fed will only likely encourage more spending binges, including Biden’s $6 trillion behemoth budget, from the Democratic-controlled Congress.
A fair question for all American taxpayers to ask would be what are we getting for these vast sums, which as a percentage of the economy rival federal spending during World War II?
It certainly isn’t the economic stimulus that politicians of both parties keep talking about.
As Neil Irwin wrote for the New York Times, President Biden’s budget proposal includes billions of dollars for clean energy, education and child care — ideas being sold for their potential to increase America’s economic potential. One thing it does not include: an outright economic boom.
In the assumptions that underpin the administration’s budget, economic growth is strong in 2021 and 2022 — but strong enough only to return the economy to its prepandemic trend line, not to surge above the trajectory it was on throughout the 2010s.
Then in 2023, the administration expects gross domestic product, the broadest measure of economic activity, to rise at a slower 2 percent rate, then 1.8 percent a year through the mid-2020s. That is lower than the 2.3 percent average annual growth rate experienced from 2010 to 2019.
It is a striking contrast with the approach taken by the Trump administration — a gap between presidential styles buried on Table S-9 of the two presidents’ budgets, observed Mr. Irwin. The Trump administration’s final prepandemic budget proposal, published in February 2020, forecast that the economy would grow around 3 percent per year throughout the 2020s.
Our take from reviewing the Biden budget and the literature analyzing it is that the reason it does not project sustained economic growth is that much of the vast sum Biden plans to spend is directed at unproductive government activities, such as burdensome regulations of the fossil fuels industry, foreign aid, asylum programs for illegal aliens and subsidizing failing Democrat-controlled states and localities.
Indeed, many of the marquee items in Biden’s budget actually reduce the economic potential of the United States by imposing future subsidy costs on taxpayers – wind and solar power and electric vehicles are only competitive with fossil fuel power if the consumers and producers get a taxpayer subsidy.
And, while the Biden administration and Democrats may project increased employment in the new and highly subsidized “green energy industry” many if not most of those jobs involve transferring the jobs and the wealth from fossil fuel states, like West Virginia, to California or another locality far from where the existing fossil fuel jobs are being killed. Devastating the families and the local tax base of fossil fuel producing communities does nothing to add to the economic potential of America.
Finally, there are the massive sums being committed to race-based programs, such as mitigating the imagined effects of climate change on so-called communities of color. While these programs may improve the employment prospects for sociology majors or race and gender studies majors, they do nothing to build the overall economy.
It would be much better for the poor people of whatever color who live in those communities to use existing environmental clean-up and mitigation programs and spend the excess Biden proposes to fund proven job skills and life skills programs – both of which would provide measurable economic benefits to the individuals who participate and the country as a whole.
The bottom line is Biden’s $6 trillion spending spree – by his own admission – isn’t going to get us back to where the pre-pandemic Trump economy was. Instead, it will return us to the tread water economy of the Obama years when the massive burden of politically motivated government regulation and subsidies for favored industries drained our economic power and beggared American workers.
Americans for Limited Government
blue state bailouts