There are many schools of economics, and we’re not going to get any of them here. What you need to know, though, is that leftists, including those running the Democratic Party agree with an economic theory that thinks the government can spend like crazy without any problems. That means, right now, the White House and Congress, both think that same thing.
And this is dangerous thinking.
But don’t just take my word for it. A recent analysis agreed. Emel Akan writes,
President Joe Biden is calling on Congress to approve more than $4 trillion in infrastructure and social welfare packages as part of his “Build Back Better” agenda. While his ambitious plans aim to spur economic and job growth, analysts predict the proposed spending and tax increases would shrink the U.S. economy in the long term.
On March 31, Biden announced the American Jobs Plan, his $2.3 trillion infrastructure proposal that dedicates the majority of spending on progressive priorities such as climate change. He described his proposal as “the largest American jobs investment since World War II” in a speech in Pittsburgh on the day of the announcement.
His spending plan, which includes significant tax increases on corporations, is unlikely to gain bipartisan support on Capitol Hill. Republicans earlier labeled the infrastructure plan a “Trojan horse” for progressive priorities and deficit spending rather than addressing systemic issues with roads and bridges.
The University of Pennsylvania’s Penn Wharton budget model projects that Biden’s infrastructure plan would spend $2.7 trillion over the next 10 years. This amount is $400 billion more than announced by the White House, as it includes clean energy tax credits not listed in the administration’s original announcement.
According to the Penn Wharton model, the spending and tax provisions of the plan would end up reducing gross domestic product (GDP) by 0.8 percent by 2050.
While the proposal’s business tax hikes decrease government debt over the long term, it would “discourage business investment and thus reduce GDP,” according to a report by Penn Wharton analysts.
Now, if all of those terms and numbers make your eyes gloss over, here’s what it means: all that spending Democrats want to do would shrink the economy. That means less money in the U.S. and less jobs, too. That means working class Americans are going to have an even tougher time than they do now.
But that is standard leftist thinking: vote based on intentions without any regard for the long-term consequences of those votes and actions.
Buckle up. It’s going to be a long four years.