Biden Seems Determined To Screw Up The Economy By Adopting The Progressive Dream Of A Welfare State

Joe Biden

Barack Obama knew that Joe Biden as President would be a train wreck.  It’s why he reportedly warned allies, “Don’t underestimate Joe’s ability to f*** things up.”

True to form, that’s what Biden has done.  As the most recent dismal jobs report showed, he’s managed to screw up the economy by creating an insensible welfare state where workers earn more sitting on their duffs and collecting Joe’s stimulus checks.  It will only get worse as Biden seeks to expand government largess beyond sustainability.

Biden’s tax and spending plan will increase corporate taxes to 28% from 21% costing a million jobs, according to the National Association of Manufacturers.  It gets worse.  He wants to double the capital gains tax to 43.4%, as well as hike death taxes and the top individual income tax rate.

The net effect is that the American economy —still struggling to revive from the pandemic precipice— will crater.  Investments in small businesses and new tech companies will dry up with less money available.  Consumers will pay higher prices as businesses pass along the new tax to them.  Jobs will slowly vanish and wages will diminish when the tax shock forces companies to revamp and retract.

But Joe thinks it will all be worth it.  His perverse dream of a welfare state will come true.  In reality, it will be an economic nightmare.

My wife and I went to a restaurant the other night.  There was only one waiter and one chef to service the crowd intent on celebrating Mother’s Day.  But the hungry diners were told that the only thing the kitchen could handle was pizza.  And it would be an hour wait just to get that.

What was the problem?  It turns out that no one wanted to work at the restaurant anymore.  Why would they?  When the government pays you not to work, it’s nicer to sit on the couch watching ball games…or frolicking at the beach…or playing with the kids in the park.

We found the same scenario unfolding at the nearby market.  There was only one cashier to service a store full of grocery shoppers.  Again, the reason was familiar —workers had no incentive to work.  Indeed, Biden had created a disincentive.  His $2 trillion stimulus package handed workers a “Biden Bonus” of $300 on top of their existing unemployment check each and every week.  Factor in other sumptuous government payments and it makes little financial sense for millions of Americans to work when they can pocket more money by not working.

Thus, I wasn’t at all surprised to learn that no one showed up at a nearby job fair —except prospective employers desperately anxious to fill needed jobs.  I shared all of this with a few friends of mine over coffee.  They repeated identical stories.  They noted signs on store fronts and restaurants warning of staffing problems.

There is no scarcity of available jobs, mind you.  It’s just the opposite.  Fewer people have a monetary motive to work.  As the Wall Street Journal noted, any worker earning less than $32,000 annually would get a raise by going on unemployment, thanks to Joe’s “Biden Bonus.”  Thousands of employers have been complaining about it.  Loudly.  But Biden either can’t hear or won’t listen.

All told, there are more than 8 million vacant jobs waiting to be filled, according to the most recent data released by the U.S. Labor Department.  The problem is especially acute in food services and accommodation, leisure and hospitality, state and local education, and arts and entertainment.  All of those open positions will never be filled as long as idle workers can make more money collecting government checks that will continue to roll in for the next six long months.  I can’t say that I blame them.  Who wants to make less money by actually working for it when you can make more money by not working at all?  It’s common sense.

What defies common sense is why Biden pushed for the increased benefits just when the pandemic turned the corner, lockdowns were lifted, more people got vaccinated, and businesses started opening up again.  That’s when the financial safety valve should have been turned off.  Instead, Biden kept the money spigot flowing wide open causing direct harm to the recovering labor market…which, in turn, led to further damage to companies and the economy.

Is it any wonder that 125,000 people quit their jobs in one month alone?  Should we be surprised that the U.S. added just 266,000 new jobs in April —shockingly below the 1 million forecast by Wall Street or the 2 million estimated by some economists?  Of course not.  As Obama coarsely predicted, Joe could screw up a free lunch.

All Biden had to do was nothing at all.  The jobs market was poised to take off like a SpaceX rocket.  After a year of shutdowns that devastated businesses, the engines of economic growth were primed and ready to roar back to life.  Then Joe stepped in and mucked up the works.

Without a single Republican vote in either the House or Senate, the president and his Democrat allies jammed through his $2 trillion-dollar spending spree that dropped like an anvil on the jobs market.  He was warned it would happen, but he refused to unclog his ears.  He was so dedicated to the progressive ideal of a vast welfare state that he was deaf and blind to the reality of fundamental economics.  That is, while it may be constructive to provide an emergency (and temporary) safety net when jobs are in short supply, it is destructive and foolhardy to do it when there’s a glut of open jobs.

Even an economic neophyte knows that a remedy only works during a crisis, not when it recedes.  You don’t apply iodine to a wound when the infection subsides.  You leave it alone and let it heal on its own.  The U.S. economy, like the human body, is resilient.  It will recover if you don’t over-treat or over-medicate.  But Biden, who views himself as the second coming of FDR, couldn’t help himself.  His lame effort at replicating the New Deal turned into the New Raw Deal.  His decision to hand out money like candy at the local fair made the economy sick at the very moment it was poised to get well.

There is some good news.  Nine governors who recognize the insane and corrosive effect of the Biden give-away are rejecting the enhanced federal benefits.  They are following the lead of the U.S Chamber of Commerce which called for the end to the “Biden Bonus.”  But that still leaves 41 states stuck with Joe’s program that actively discourages people from returning to work.  Thanks to Joe, the economy cannot possibly produce enough goods and services to meet the soaring demand now that the pandemic has eased.

Biden seems to be in denial that he overplayed his hand.  He refuses to accept the obvious facts corroborated by statistical evidence.  He dismissed the notion that his wasteful payments are to blame for the anemic jobs numbers by saying, “We don’t see much evidence of that.”  Really?  When was the last time you talked to a real employer, Joe?  Or a real worker?  How long has it been since you shopped in a store or dined in a public restaurant?  Biden is oblivious.  He has no idea what’s going on outside his sequestered bubble.

Remember that Biden spent last year in a basement bunker in his Delaware compound.  Since being sworn in as president in January, he’s barely emerged from the White House.  When he does, everything is carefully choreographed by his handlers.  He rarely talks to reporters.  He’s been scolded for doing so and recently admitted it.  His remarks are always scripted in a teleprompter written by some unnamed aide who takes his marching orders from…well…no one really knows.  If Nixon was the imperial president, Biden is the clueless president.

Deep down, Joe must have some sense that what he’s done is mangling the economy.  Why else would he say that his administration would make it clear that people can’t turn down suitable jobs and keep collecting benefits?  It’s an admission of guilt.  And it’s a ruse.  Because there’s no viable mechanism in place to enforce what Biden is saying.  And the White House won’t explain how exactly that would work, except that states would somehow take care of it.  Right.  So, enforcement doesn’t really exist.  It’s another figment of Joe’s contorted imagination.

There’s a gaping divide between truth and reality in Biden World.  The nonsense that comes out of his mouth bears little resemblance to fact.  When the embarrassing job numbers emerged, he tried to spin it by claiming that he’d created —quote— “more than 1.5 million jobs” in his first 100 days.  Except the graphic he produced as proof showed that the true number was only 542,000 jobs.  How he managed to multiply it by a factor of three was left unexplained.

The Washington Post fact-checker called it —quote— “ridiculous to pretend that jobs growth in the early months of a presidency has much to do with administration policies.”  Ouch!  When the liberal Biden-loving Post calls out your exaggeration, it must really be a whopper.

Biden has also claimed that his $2.2 trillion dollar “American Jobs Plan” will add 16 million jobs to the economy.  Where did he get that unfathomable number?  He refused to say.  Maybe it came from a Moody’s Analytics report which projected a similar number.  But here’s the catch: the report said it would happen gradually over the next 10 years without Biden’s tax plan.  Double ouch!

So, what will happen if Joe tax hikes get signed into law?  The creation of jobs envisioned by Moody’s will never materialize.  Our economy will come to a grinding halt.  Business activity will retract.  It is the inevitable negative consequence of over-taxation and incontinent spending.  History is replete with examples.

Bear in mind that Biden’s copious and unaffordable giveaways are not limited to unemployment bonuses.  Add in his tax credits, special grants, relief funds, and other financial goodies that are being lavished on states and you’ve got a bouillabaisse recipe for economic disaster.

Why?  Because there is no way to pay for trillions of dollars more in extra spending.  Except to raise taxes which is that last thing you want to do as an economy is struggling to recover from a pandemic.  But clueless Joe plans to do it anyway.  He doesn’t seem to care that nearly half of all his government spending is deficit financed.  The interest alone on all that borrowed money is staggering.  Future generations will be saddled with the bills Biden is racking up.  They have no hope of paying them off.  Joe is like a crazed prodigal who maxes out 20 credit cards on a student budget.  Then he takes out more credit cards.

Biden now wants to tax long-term capital gains and dividends as ordinary income while raising the top individual tax rate.  He also intends to raise the corporate tax rate.  Joe might want to consult a history book on that one.  It not only produces less government revenue to pay for extravagant spending, but it stunts economic growth which has an overall depressive effect on business health.  Taxed at a higher rate, companies both large and small offset their loss by paying workers less and by halting investments in new products and related industries.  Business shrinks instead of expands.

Moreover, the increased corporate tax is invariably passed along to consumers in the form of higher prices for goods and services.  Inflation takes hold.  The elevated tax also has a dilatory impact on innovation which is vital for any business to thrive.  It is the engine of economic progress.  But Joe wants to stall the engine.  Or maybe kill it altogether.

Don’t take my word for it.  Spend a few moments reading the analysis of Biden’s tax plan by The Tax Foundation, the nation’s leading independent tax policy nonprofit.  It found that Biden’s massive tax increases would diminish consumption, cause wages to fall, and precipitate a significant decline in gross domestic product (GDP).

But that’s not all.  Capital stocks would tank, after-tax income would drop, and full-time jobs would crater.  Their bottom line: —quote— “Biden has chosen to pursue inefficient tax increases that will undermine economic growth and reduce U.S. competitiveness.”  The outlook is grim.

Scott Hodge, president of The Tax Foundation said:

“We estimate that those provisions alone would raise about $215 billion over the  next decade. Overall, the tax increases that he’s proposing would have serious harm to the economy and overwhelming any of the economic benefits that might come from the other transfer payments or any of the infrastructure that he’s talking about. So, what you’ve got is a smaller economy, fewer jobs, less investment and yet a whole bunch of government spending that doesn’t make up for the harm that is done by the taxes.”

There’s not enough wealth at the top in order to pay for everything they’re [Biden administration] talking about. But he [Biden] is handing out a lot of goodies. We estimate because of the expansion of the child tax credit, some 58 million Americans will pay zero income taxes this year. Many will get an actual refund even if they pay nothing because of the generosity of these credits.

So, there’s a lot of goodies being handed out here that are kind of blindfolding people to the possible economic harm of the tax increases on both corporations and the rich. What we’re going to have is a smaller economy that is less competitive globally because he’s trying to pay for his infrastructure and spending programs with the most harmful taxes possible. Those are tax increases on corporations and successful individuals. These are really success taxes that he’s trying to fund his programs with.

Joe wasn’t a very good student in school.  In fact, his academic record was abysmal.  He obviously never learned one of the basic tenets of economics: the more you tax something, the less you will get.  Taxes matter.  Perversely raising taxes toward the end of a damaging pandemic is poison.  Unshackling Americans from onerous taxes is the antidote.  Sadly, that won’t happen.

Because Joe Biden, intoxicated by his progressive dream of establishing a vast welfare state of endless entitlements, is determined to derail our economic future.  He is shamelessly exploiting the pandemic to do it.

It’s madness…courtesy of Mad King Joe.

The post Biden Seems Determined To Screw Up The Economy By Adopting The Progressive Dream Of A Welfare State appeared first on Gregg Jarrett.

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Author: Gregg Jarrett


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