Dear Democrats: Kill the Spending Bill
The last thing America needs right now is to blow through more money it doesn’t have.
The Democratic Party is currently engaged in a furious debate over whether the United States, amid the highest inflation it’s seen since the 1980s, should spend $3.5 trillion it doesn’t have on things it doesn’t need, on top of $6 trillion in unexpected COVID-19 outlays it’s already responsible for, through a party-line vote that is sure to divide the country even further; or, alternatively, the United States, amid the highest inflation it’s seen since the 1980s, should spend $1 trillion it doesn’t have on things it doesn’t need, on top of $6 trillion in unexpected COVID-19 outlays it’s already responsible for, through a party-line vote that is sure to divide the country even further. Current predictions vary, but astute Congress-watchers have divined that, amid the highest inflation we’ve seen since the 1980s, the Democratic Party is likely to end up spending between $1.5 trillion and $2 trillion we don’t have on things we don’t need, on top of $6 trillion in unexpected COVID-19 outlays we’re already responsible for, through a party-line vote that is sure to divide the country even further.
The amount of money we don’t have that the Democratic Party should spend on things we don’t need is, of course, $0.
This bill should be abandoned immediately. Indeed, it is beyond preposterous that it is even being considered. This year, the federal government is going to spend $3 trillion more than it brings in (that’s $24,429.96 borrowed per household), while next year and every subsequent year until 2031, the federal government is going to spend an average of $1.2 trillion more than it brings in (that’s $9,771.98 borrowed per household). And that’s if Congress does nothing. If the Democrats get to satisfy their lust for additional spending, it will make this situation worse — not only in the short term, but, thanks to the permanent entitlement expansions they aim to enact along with the additional spending, forever. Right now, our national debt is larger than the entire U.S. economy, and bigger than it has been at any point since World War II. The very notion that we would choose to add more money to the top of the mountain should be met with derisive laughter, if not with outright anger.
It has been frequently noted that the plan that the Democrats are pushing is larger than the New Deal. It has been less frequently noted how muchbigger it is. A few weeks ago, Bill Scher put the scale of the package into sobering context:
After President Barack Obama enacted his roughly $800 billion stimulus package (about $1 trillion in today’s dollars), Michael Grunwald wrote a book christening it The New New Deal. “In constant dollars,” Grunwald calculated, “it was more than 50 percent bigger than the entire New Deal, twice as big as the Louisiana Purchase and Marshall Plan combined.”
The proposal from today’s Democrats is 3.5 times bigger than that.
Why?
As Scher notes, “Not even FDR tried to wrap Social Security, the National Labor Relations Act, the Banking Acts, the Securities Act, the National Industrial Recovery Act, and the Relief Appropriation Act into a single bill” — and FDR had supermajorities in both chambers and a catastrophic economic depression to deal with. In a vacuum, I daresay, some Americans would like to expand an already crumbling Medicare system and subsidize college, pre-K, and childcare. In the real world, though, the idea that these aims are sufficiently imperative to warrant massive increases in deficit spending and taxation levels is absurd.
In his recent Wall Street Journal op-ed, Senator Joe Manchin laid out a host of concerns he had with the Democrats’ course. “Some in Congress,” he wrote, “have a strange belief there is an infinite supply of money to deal with any current or future crisis, and that spending trillions upon trillions will have no negative consequence for the future. I disagree.” Specifically, Manchin said that he was worried that “the nation’s debt has reached record levels”; was cognizant that “over the past 18 months, we’ve spent more than $5 trillion responding to the coronavirus pandemic”; was alarmed that “Congress chooses to ignore the serious effects inflation and debt have on existing government programs”; was nervous about inflation, which “continues to rise and is bleeding the value of Americans’ wages and income”; and was vexed by the prospect that when the United States “faces a future recession or national emergency,” it will have no resources left to use in self-defense. In a particularly memorable passage, Manchin asked a series of questions:
What do we do if the pandemic gets worse under the next viral mutation? What do we do if there is a financial crisis like the one that led to the Great Recession? What if we face a terrorist attack or major international conflict? How will America respond to such crises if we needlessly spend trillions of dollars today?
Manchin concluded by saying that the above concerns were why he remained unwilling to “pass the largest single spending bill in history.” But if he were being honest, Manchin would recognize that the above concerns are good enough reason to oppose the passage of any additional spending bill, because they apply equally as well to spending a single dollar more than we currently are as to spending $3.5 trillion more than we currently are (yes, even if we raise taxes in concert). As his Journal piece notes, the United States government is unable to tap into an “infinite supply of money,” and, leaving aside the broader economic effects that a tax hike might have, it remains the case that an increase in taxes that is used to pay for new spending is an increase in taxes that cannot be used to narrow our deficits and begin the extraordinary challenge of paying down our debts. Surely, Manchin must grasp this? In the same op-ed, he says that he’s worried about inflation, which, if true, must mean that he is worried about the prospect of higher interest rates. And if he is worried about the prospect of higher interest rates, then he should be absolutely terrified that our payments on the debt, which for decades have been left artificially manageable, might suddenly become anything but.
All told, Manchin’s contention is that, as a matter of elementary prudence, the United States should decline to follow an unanticipated $5 trillion spending binge with another, entirely voluntary multi-trillion-dollar spending binge. He’s right, and he — and everyone else — ought to follow his logic to its obvious conclusion: No.