Stephen Moore: Biden’s $1.9 trillion ‘rescue plan’ could destroy 4 million jobs — here’s a better idea
Biden’s proposals will likely speed America further along the track to bankruptcy, higher interest rates, higher inflation and much higher taxes
{{#rendered}} {{/rendered}}Can Uncle Sam tax, spend, borrow and print money to return America to prosperity? President-elect Joe Biden’s "American Rescue Plan," announced Thursday night, makes a $1.9 trillion bet that we can.
The Biden plan is almost a replay — except with more than twice the price tag — of the strategy that President Barack Obama and then-Vice President Biden employed in 2009 with their $900 billion "stimulus" bill. Even by Obama’s own numbers, that bill led to hundreds of thousands of fewer jobs than if we had done nothing.
So now here we go again with a second kick of the mule. Actually, it is the third, fourth or fifth kick. Trump and Congress have already approved nearly $3 trillion on pandemic spending. The Biden proposal would bring the total spending for the pandemic to about $5 trillion.
{{#rendered}} {{/rendered}}BIDEN PROPOSES SPENDING $1.9 TRILLION AS HE UNVEILS ‘RESCUE PLAN’ FOR AMERICA
What Biden has presented isn’t a COVID-19 relief bill. It is a Sen. Bernie Sanders-type wish list of everything conceivable that the left has wanted to spend money on for years, and even decades. It certainly isn’t a "stimulus" bill.
All that Biden’s proposal does is stimulate Washington and many of the governments in blue states in America, which have lockdown governors who have bankrupted their own states.
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Casey Mulligan of the University of Chicago and I estimate that at least 4 million jobs would be destroyed by the Biden bill because all of the free money makes work less essential and — in many cases — less financially attractive than getting off the couch and working. That’s some stimulus.
In addition to sending $1,400-per-person checks to millions of American households — helicopter money — the Biden plan includes $350 billion for a blue state bailout, paid parental leave, a $15-an-hour minimum wage, $400 a week bonus unemployment checks, transit aid, paid leave of $1,400 a week, some $100 billion for school aid (for schools that have been shut down for almost a year!), "health equity" grants, student debt relief and checks for illegal immigrants.
I wonder whether any of the politicians in Washington understand one of the first rules of finance: debts have to be repaid.
If income limits to receive the $1,400 per-person checks remain the same as for previous such payments, individuals who make up to $75,000 (and $150,000 for married couples) would be eligible, with payments phased out as income rises.
{{#rendered}} {{/rendered}}All that is missing is the Green New Deal. Does any of this have anything to do with a health emergency?
If the idea here is to create jobs, there is a less expensive and much more effective way to get employers to hire and workers to get back in the labor market. We could completely eliminate for an entire year the 7.5% payroll taxes paid by every small business and taken out of every worker’s paycheck. That would unleash millions of jobs. This would have virtually ZERO administrative and bureaucratic costs. Maybe that’s why Washington pols don’t want to do it.
Instead, we now get Phase 7 of debt spending — and Biden wants another trillion-dollar infrastructure bill to follow. (Doesn’t it seem like just yesterday that Democrats opposed President Trump’s tax cut because it would increase the deficit?) Those faux debt hawks have sure flown the coop.
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Biden’s proposals will lift the national debt to above $30 trillion and will likely speed America further along the track to bankruptcy, higher interest rates, higher inflation and much higher taxes. Democrats defend themselves by arguing that Trump ran up the deficit to $27 trillion, so they have license to take our debt even higher into the stratosphere.
The recklessness and shamelessness of all this reminds me of the story of the man in a dark suit who knocks on a woman’s door as she is holding a baby girl in her arms. "I’m from the IRS and I’m here to collect your $120,000 share of the national debt," the man says.
{{#rendered}} {{/rendered}}The woman answers in shock: "I don’t have that much money."
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The man replies: "I wasn’t talking to you. I was talking to the baby."
{{#rendered}} {{/rendered}}I wonder whether any of the politicians in Washington understand one of the first rules of finance: debts have to be repaid.
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