Washington Post economics columnist Robert Samuelson believes former Vice President Joe Biden didn’t go into details about his policy proposals during his Democratic nomination acceptance speech for good reason last week: because it would shock Americans.
Samuelson tallied what Biden is proposing, and the price tag comes in at nearly $8 trillion in new spending over a 10-year period, which represents the greatest expansion of the federal government since Lyndon Johnson’s Great Society in the 1960s.
Some of the items on the Democratic presidential nominee’s agenda include expanding Obamacare, lowering the Medicare age of eligibility to 60 years old from 65, implementing climate change initiatives, and providing taxpayer funded “free” public college tuition and “free” pre-K child care.
“His proposals, if adopted, would constitute the largest growth of government since 1965, when Congress created Medicare and Medicaid, federal health insurance for the aged and poor,” Samuelson wrote Sunday.
“The amounts are gigantic. For example, the $8 trillion is roughly equivalent to half the existing federal debt held by the public,” he added.
And the Biden plans come when the nation was already running pre-COVID deficits of nearly $1 trillion per year.
The CBO is projecting $13 trillion in deficit spending from 2021 to 2030, which, when coupled with Biden’s proposed $7.74 trillion in new spending, would mean $20.74 trillion in spending obligations beyond existing revenues over that period.
Biden has said he plans to pay for his programs by raising taxes on the wealthiest Americans and corporations, but that would only bring an additional $3.35 trillion to $3.67 trillion over the next decade, according to the Committee for a Responsible Federal Government.
The group estimated that the top 1 percent of wage earners would see their tax bill go up $300,000 per year.
ABC News anchor David Muir questioned Biden on Friday regarding how he plans to pay for his robust expansion of the entitlement state without raising taxes.
The candidate responded by insisting that taxes would only go up for the wealthiest Americans — in other words a rob-Peter-to-pay-Paul scheme.
“I will raise taxes for anybody making over $400,000,” Biden said.
“Let me tell you why I’m going to do it,” he added.
“It’s about time they start paying a fair share of the economic responsibility we have. The very wealthy should pay a fair share.”
So Biden is trafficking in the same “fair share” lingo that his former boss, Barack Obama, employed during his presidential run in 2008.
The Tax Foundation determined in 2018, after the tax cuts signed into law by President Donald Trump were implemented, that taxes paid by the top 1 percent accounted for 37 percent of federal income tax revenues.
The top 25 percent paid over 85 percent. Meanwhile, thanks in part to the expanded standard deduction and tax credits for children, the bottom 50 percent of earners accounted for just 3 percent of federal income tax revenues.
It sure looks like the wealthy are paying their fair share.
Arguably the fairest way to structure taxes would be a flat rate in which everyone had skin in the game. The wealthy would of course continue to pay more, because 10 percent of $1 million is more than 10 percent of $50,000.
It is fair to say that the millionaire can more easily afford a $100,000 tax bill than a family earning $50,000 can afford $5,000, which is why our system has built in the deductions and credits to lessen the burden on middle- and low-income earners.
However, it is also true that there is a point of diminishing returns for the economy overall when the government takes too much of what the wealthy Americans earn, because you’re killing the goose that lays the golden egg.
We saw this play out in the 1970s following the passage of the Great Society programs of the previous decade.
Those liberal policies included a vast expansion of the welfare state, which resulted in a disincentive to work for both the wealthy and the poor.
Those making money were being taxed at a top marginal rate of 70 percent, while those at the lower end of the economic scale often lost government benefits like food stamps, Medicaid, welfare payments and federal housing if they took a job, making government dependence in their best economic, though not spiritual, interest.
The U.S. experienced negative economic growth during the election year of 1980, when former California GOP Gov. Ronald Reagan challenged incumbent Democrat Jimmy Carter.
The unemployment rate reached 7.5 percent by the time Reagan took office in January 1981. It would top out at over 10 percent in the early years of Reagan’s presidency before his economic policies took effect.
By 1983, following across-the-board tax cuts, the economy began to boom with 3.5 million new jobs created that year, followed by 3.9 million in 1984.
“There was a reason Reagan called his [re-election] advertising campaign ‘Morning in America’ because in the ‘70s and the early ‘80s it didn’t feel as though we were in morning in America. There was kind of a purgatorial, afternoon feel to the country,” Amity Shlaes, the author of “Great Society: A New History,” told The Western Journal last month.
Shlaes, who has served on The Wall Street Journal’s editorial board, said the big-government policies led to the economic doldrums of the ’70s.
“A lot of the … policies of the period didn’t yield what they hoped to yield and hurt the economy terribly so that we had the ’70s, which were not just an afternoon, but a long, sad, dark afternoon,” she said.
“The private sector had a lot of possibility but wasn’t able to realize it. So it was an incredible tragedy that we could have created jobs and we didn’t,” Shlaes added.
Biden is proposing to do what the Obama administration did as the country was emerging from the Great Recession, which is raise taxes and add a tremendous amount of regulations on businesses.
As Reagan observed at the dawn of the Great Society, the choice for voters was not whether America’s government should go left or right, but whether the whole of society would go up or down.
What was true then remains true now as Americans cast their votes in 2020.
I vote for going up!
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