We’ve learned that President Joe Biden likes spending money. He must have developed an affection for it during his days in Congress where there is an insatiable appetite for spending money the federal government doesn’t have.
After little more than two months on the job Biden is edging toward committing the country to a mind-numbing $6 trillion in spending. If he stops now (unlikely) the federal debt will exceed $28 trillion. That means you, your spouse, your kids, all your kids’ friends and their parents – everyone in the nation – will ultimately owe the federal government over $85,000, each.
The President’s latest spending plan – which costs more than FDR’s New Deal and LBJ’s War on Poverty, combined – includes funding for, among other things: capping and cleaning up well heads; forming a civilian climate corps to combat global warming; creating “green” infrastructure, including replacing fossil-fuel technologies with those producing electric energy; ending state “right to work” laws; and providing other myriad green subsidies.
The advertised principal expenditure of the plan is infrastructure – which to most people means roads, bridges and other physical edifices. We all agree that filling potholes and upgrading spans over rivers and other bodies of water is a good thing and in need of a financial pulsing of government funds.
But, upon reading the plan, it turns out the considerable support it’s earned merely serves to give political cover to its advocates – since, by some accounts, the plan spends less than 10% on fixing or erecting infrastructure. Instead of defending it Jen Psaki, the White House Press Secretary says “we’re selling this as a once in a generation investment” in businesses of the future – comments markedly deviating from “infrastructure” messages of various surrogates.
In the plan – which was hatched in the White House – there are many provisions about help for the elderly, rural communities, housing, workforce training and research but little about physical infrastructure. It’s hardly an infrastructure proposal at all. And, instead of “pay as you go” it uses newly minted dollars.
Indeed, the money-printing machines at the Treasury Department are simply taking orders from the White House. How much to print? After all, the more money in circulation the more inflation forces emerge, right?
True. But, reintroducing inflation to the national economy doesn’t seem to bother the feds with a spending fetish. They like printing money too much.
And Biden – the plan’s chief sponsor – perpetuates the myth that the plan is paid for anyway, through a combination of tax increases: a global minimum tax (reportedly paid by corporations), hikes in both capital gains tax and corporate income tax rates, a new climate tax and an increase in the basic income tax rate.
If you live in Biden’s world and “make $400,000 (a year) or less, you won’t pay a penny” of new tax. Trouble is, in the real world, his numbers don’t add up. There aren’t enough taxpayers – earning anywhere near that much money. Expect that “green eye shades” in Washington have already figured that out and you, among the “usual suspects” who normally pay the taxes, will pay more.
You might have concluded it would be easier to simply raise the gas tax – and it certainly would produce a more equitable nexus. You’d be in agreement with many if you did. But, note it is barely discussed in the Biden plan.
In its place, look for a new tax buried inside the plan called a “vehicle mileage tax” (VMT) – a troubling remnant of global warming dogma.
While the VMT is presented as simply a tax on the mileage you drive, the tax punishes new homebuyers. The longer your daily commute, for example, the higher the tax you pay. And, where are all the new houses being built?
Not surprisingly, VMT is now one of the myriad constraints to building market-rate housing; worse when building affordable housing.
Biden was likely won over by some White House strategists who said that hiking the gas tax would be difficult. Moreover, I’m sure they explained, since it’s more of a regressive tax – hitting lower-income families hardest – to even try to increase the exaction might do grievous political damage to the President.
Plus, given ever-improving fuel economies of automobiles the gasoline tax represents a declining source of revenue. The idea was smashed.
Is President Biden’s infrastructure plan a gift to Americans, like its supporters say? To some, maybe. But, just wait till the spending sinks in – and taxpaying Americans get the bill.