Let’s face it. America botched its response to the COVID pandemic.
Traditionally, as in the Spanish flu and polio pandemics, authorities have recommended common sense public health measures and protected the vulnerable. This time, they ordered sweeping lockdowns of the economy and closed schools, churches, and businesses.
The results were economic devastation, educational stagnation, greater income inequality, and loss of civic life.
Sweden, even though it has a reputation for a more collectivist mindset than our “land of the free” got it right. Their health officials adopted a live-and-let-live strategy, mostly rejecting lockdowns and letting normal life go on.
Initially, health outcomes suffered some, partly because Swedes neglected to adequately protect their nursing homes. But today, probably because of herd immunity, Sweden’s death rate is just over 1614 per million, compared to 2335 in Britain and 2836 in the US.
Even better, Sweden avoided the multiple consequences Americans now face. GDP growth is projected to be 5% larger than pre-pandemic, and they don’t face a mountain of future debt. Since schools stayed open without face masks, there were no lost years of education and test scores are up.
Unfortunately, America’s response to the self-inflicted wounds caused by our COVID panic caused yet more harm. When confronted with the results of their mismanagement, America’s governing leftists reverted to their universal solution for all ills: spend more money.
So last March, President Biden triumphantly announced “help is here” as he signed the $1.9 trillion American Rescue Plan. We were assured that the truly massive spending would help defeat the pandemic, reopen schools, and revitalize the economy, creating at least 4 million additional jobs.
We now know the bill was a colossal failure. We didn’t get more jobs, but we did get ominous inflation even though Biden had insisted that “no serious economist” predicted inflation as a result of the spending surge.
The inflation was totally predictable. At least 1.8 million people declined to reenter the workforce when the $300 per week unemployment benefit supplement was extended. That’s understandable since one study indicated that in 19 states, a family of four with two “unemployed” adults could receive $100,000 in total government benefits.
Meanwhile, trillions more were pumped into the economy. This excess demand, combined with fewer goods and services being produced, was the perfect recipe for inflation, which “serious economists” now acknowledge is probably here to stay.
Why did the plan have no effect on COVID? Answer: it didn’t really try. PolitiFact concluded only 10% of the bill addressed COVID health impacts and 1% went to advancing vaccines, the most effective way to impact serious disease.
Instead, the ever-vigilant spenders saw their chance to enact a wish list and took it. Their dreams that came true included $20 million for “preservation of Native American languages,” raising Obamacare subsidies, and a massive expansion of the child tax credit.
Since the feds are sitting on so much surplus funding (sarcasm alert), $350 billion went to state and local governments to help them weather the pandemic. But even when the bill was being considered, it was already clear that state-local tax revenues were growing, and their budget crisis never materialized. It was simply an excuse for feds to shovel out money, mostly to their friends in Democrat states.
Public schools were also showered with $120 billion to help them reopen safely. But the funds came with no requirements attached. By the end of FYI 2022, only $40 billion will have been spent, leaving education administrators with an $80 billion slush fund. Thanks, COVID.
So, another $1.9 trillion accumulates onto our debt load, and we have precious little to show for it. We have fewer jobs than were predicted in the “baseline” without the bill, and there was minimal or no effect on the course of the pandemic.
Lesson learned? Nah. Biden preposterously proposes spending yet more on Build Back Better, an even larger collection of handouts, as an inflation cure. Yet our debt is not only higher than ever ($30 trillion) but rising interest rates now will make our debt service more expensive and hasten the Day of Reckoning.
The Biden/Harris administration is ignoring established budget tradition in their determination to spend yet more money.
Since the Reagan era, each federal budget has included a list of achievable spending cuts. The final Obama/Biden budget boasted of their averaging 140 cuts, saving $22 billion, yearly. Then-VP Biden headed up these cost cutting efforts as he did the spending reductions in the 2011 Budget Control Act.
Obama praised Biden‘s leadership in the Campaign to Cut Waste, calling him “the right man to lead it because nobody messes with Sheriff Joe.”
So Biden was justified in campaigning on his record of cost-cutting, which he did (although overall spending never fell during his tenure). But, as we have seen on almost every front, the rhetoric of candidate Biden meant nothing.
His initial budget was the first in 40 years to not include a section on savings. Instead, he withdrew President Trump’s final 73 rescissions, which would have saved taxpayers $24.4 billion, including several, such as the Commission on Fine Arts and the Presidio Trust, that had been included in earlier Obama/Biden reductions. His address to Congress in April in lieu of the SOTU contained no mention of waste reduction, nor has any other communication so far.
The contrast is striking. In 2011, President Obama proposed a $4 trillion deficit reduction over 12 years. We now know he fell far short of the mark, yet 10 years later, President Biden proposed a $14.5 trillion increase in deficits over 10 years. Success seems quite probable this time.
What’s going on here? Biden’s inference that there is no waste available in federal spending is laughable. State and local governments are awash in newfound largess. Unemployed beneficiaries have received so much compensation that millions have understandably quit their jobs.
Americans in no financial stress, nursing home residents and dead people by the millions have received COVID stimulus checks. Meanwhile, the Department of Education, an inconsequential agency that has overseen the decline of American education at all levels despite a massive funding surge, was given a $67 billion boost.
The tsunami of spending is relentless. Our national debt has now reached $28 trillion, including a 30 percent increase from spending on the Covid shutdowns alone. Federal spending this fiscal year is about $8 trillion, fully half of which will be put on the tab.
Biden’s next budget is $6 trillion, plus $6 trillion or so of additional spending on anticipated campaign promises. If Biden’s budget plan is adopted, the projected national debt would be $44,800,000,000 by 2031. Moreover, the current value of obligations to finance legal entitlement programs is $132 trillion more.
We are clearly on an unsustainable course. Easy money and goosing the economy with government spending can only take us so far. Eventually, our luck will run out when interest rates return to normal, creditors run out of confidence, inflation and lack of productivity gains take their toll or all of the above.
Technology may help some to delay the deterioration of our standard of living. But our descendants will be far worse off and America will be permanently damaged from our foolish selfishness.
Yet there is a preternatural calmness in Washington circles over the consequences of pushing massive debt out to future generations. When the ruling Left discusses their multi-trillion dollar spending proposals, they typically don’t bother to address the revenue problem. The fact that they are politically popular (and Biden’s “free” spending proposals are) is rationale enough in Dem World.
The spenders act as if spending itself is a social good. Deeply in debt, they spend for unnecessary frills like taxpayer-supplied benefits for illegal immigrants and middle class social programs.
They profess to believe that money will always be available so long as government can figuratively print more, but that is patently ludicrous. More likely, they just don’t care.
These are people who fervently believe in the power of Big Government to make life better, the overwhelming evidence to the contrary notwithstanding. The more money that is spent on anything, the larger their constituent base grows. As in the border crisis, the chance to maintain power drives policy.
Literally nothing else matters.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
Arizona Congressman Andy Biggs and his Republican colleagues on the Oversight and Reform Committee called on National Economic Council Director Brian Deese to provide answers about how the Biden Administration plans to fix its self-made inflation crisis.
In April inflation increased at its fastest pace in more than a decade. Over the past year, food is up 3.5 percent, gas is up 22 percent, lumber is up 250 percent, housing is up 11 percent, and new cars are up 9 percent.
The Republicans claim the Biden Administration’s economic policies have “disproportionately impacted middle class Americans, especially those hit hardest by Democrat lockdowns.”
“The exponential rise in inflation since the Biden Administration took office shows the clear consequences of massive deficit spending and the fallout from installing an extreme left-wing agenda,” wrote the Republicans. “The Biden Administration has pushed trillions of dollars of taxpayer money out the door with little consideration of the adverse consequences … The obvious consequence of reckless government spending is inflation.”
The Republicans claim that since January, Biden and Congressional Democrats have “rushed trillions of dollars out the door and propose to spend trillions more under the guise of infrastructure and COVID-19 relief.”
The Oversight Republican lawmakers concluded, “Inflation is a regressive tax on hard-working Americans. Those families hardest hit by the burdensome Democrat COVID-19 lockdowns are now the ones hardest hit by the Biden Administration’s harmful economic policies.” In their letter, the Republican lawmakers request any and all information from the Biden Administration relating to their plans to combat inflation before the crisis gets further out of hand.
In their letter, and in what they say is an attempt to “to better understand the Biden Administration’s approach to fighting inflation,” the Republicans have requested the following documents and information, for the period between January 20, 2021 and the present:
All documents and communications related to the Biden Administration’s strategy to reduce inflation and reduce consumer prices.
All documents and communications between and among the National Economic Council regarding inflation and the rising Consumer Price Index.
All documents and communications regarding inflation and the rising Consumer Price Index between the National Economic Council and the Departments of Treasury, Labor, and Commerce.
All economic and inflation projections created by the National Economic Council or elsewhere in the Biden Administration.
The Republicans are requesting answers “as soon as possible, but no later than June 16, 2021.”
