Stupidity and the economy

By Christopher Harper

As the Ragin’ Cajun James Carville put it: It’s the economy, stupid!

Despite the whack-a-mole strategies put forward by Biden and his team, voters in crucial swing states say the economy is their top issue for this election.

Keep in mind, 2019 was a record-breaking year for the U.S. economy. Median income hit its highest level ever, and the poverty rate dropped to a 60-year low. The pre-coronavirus economy under President Trump was the strongest in decades. Hispanics, Blacks, Asians, and women all saw their incomes rise faster than the national average.

As a result, it’s also clear that Trump is the best choice to lead the post-pandemic comeback for the economy.

On the other hand, Biden has promised higher taxes and a massive amount in federal spending—a combination that’s likely to turn the economy into an absolute mess.

DaPost’s Henry Olsen is one of the few media types to call attention to the bad medicine for the economy that Biden has proposed. See https://www.washingtonpost.com/opinions/2020/09/16/joe-bidens-agenda-is-frighteningly-expensive/

As Olsen noted, the Manhattan Institute estimated that Biden’s plans would cost more than $8 trillion over the next 10 years. Analysts from the University of Pennsylvania’s Wharton School put the increase in federal spending a bit lower at $5.4 trillion over the next decade.  

Either figure means the federal government’s share of the economy would expand dangerously. Penn’s model implies that Biden’s plans would make federal spending roughly a quarter of gross domestic product by 2030, the highest figure outside of the post-recession budgets in 2009 and 2020 in more than 50 years. With local and state governments adding 15 percent to that slice of GDP, the public sector would account for 40 percent of the U.S. economy.

That’s as close to socialism as the nation has ever been.

Biden’s plan also doesn’t pay for itself even though it would significantly increase taxes. The competing analyses agree that Biden’s tax proposals would raise about $3.5 trillion in new revenue.

That’s a shortfall of somewhere between $2 to $4.5 trillion. Federal budget deficits are dangerously high and unsustainable, particularly after the outlays for the pandemic, and Biden would make the situation much worse. 

As Olsen notes, Biden’s proposals would be among the largest in decades—more than former Democratic nominees John F. Kerry, Barack Obama, and Hillary Clinton combined.

Not surprisingly, few Democrats and media types have pointed out the obvious: Biden’s plans would be an economic disaster.

Maybe it’s time to roll out Carville to preach to the choir.

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