The economic policies of the Biden administration—Bidenomics—is conspicuously marked by lofty rhetoric, grand promises, and the best of intentions. It espouses helping the poorest among us, along with amorphous but attractive values like “fairness.” But the results of these policies do not live up to their intentions. Here are just a few examples.
The American Relief Plan does not provide relief for Americans. Instead, it threatens states’ sovereignty and prevents Americans from receiving tax relief.
The American Jobs Plan does not create jobs, but green-energy flimflams. It stifles real job creation through perverse incentives and burdensome regulations. The expansion of unemployment payments is contributing to 6 million fewer jobs, because many people are making more on unemployment than they did while working.
The American Family Plan does not strengthen families, but government dependency. It weakens families by making people reliant on federal programs instead of each other. It also provides health care subsidies without accounting for income, meaning that the very wealthy can receive taxpayer-subsidized health insurance.
The idea of fairness has taken a conspicuous role in the current administration’s agenda, yet its proposed tax changes will result in lower wages, fewer jobs, and less savings, burdens which will fall disproportionately on low-income households.
Inside this Trojan Horse of fairness, Bidenomics seeks higher marginal tax rates on wages, dividends, and corporate income, along with higher death taxes, taxes on unrealized capital gains, taxes on retirement savings, and more.
Infrastructure is a key pillar of Bidenomics, but not the infrastructure you’re probably thinking of. The administration’s proposal allocates only a few percent of its infrastructure dollars to roads, bridges, electrical grids, water and sewer mains, etc. It pours money into green-energy boondoggles, and even seeks to bulldoze highways in perfect condition if they are too close to minority neighborhoods, among other outlandish plans.
To pay for record-breaking spending, Bidenomics relies on funding from the federal reserve, a surefire way to produce inflation. Nothing in this life is free, and we are witnessing those trillions of dollars in government spending fuel rising prices. Inflation is decreasing real wages, particularly among low- and moderate-income households. The very people whom these policies are supposed to help are instead being undermined economically.
If these policies worked only half as well as the names of the bills imply, economic growth would be breaking records, and no one would remain in poverty. Instead, these policies are holding back the recovery like a choke collar, and welfare rolls are swelling. Real private GDP is still about $200 billion below Q4-2019 levels, despite pouring previously unimagined quantities of money into the economy.
We should not be surprised by these results; the policies of Bidenomics—higher marginal tax rates, more government spending and regulation, excessive money creation—have been tried before and found wanting. Nevertheless, many so-called experts continue to push this agenda.
The experts were expecting almost a million jobs in the last jobs report, but we saw only a quarter of that. The experts were expecting 3.6% inflation, but we saw 4.2%. The experts were expecting Keynesianism to revive the economy, but we are seeing the economy sputter. When it comes to Bidenomics, the experts seem to be always wrong but never in doubt.
An activist in economist’s clothing favorably characterized Bidenomics as “heads down, block out the noise, deliver timely help to the American people.” They have their “heads down” alright—like an ostrich with its head in the sand, oblivious to empirical evidence all around. And what is characterized as “noise” is not irrelevant distraction, but the practical feedback that should inform policy decisions. Lastly, the “timely help” is late to the game, with funds allocated in March not actually being spent or sent out to Americans until July.
It is reminiscent of the funding for “shovel-ready jobs” described in the 2009 rescue packages. Even former President Obama admitted that the funds he authorized took years to be spent, arriving far too late to achieve their stated objective.
While some economic policies, good and bad, take years to bear fruit, we are seeing the effects of Bidenomics sooner rather than later. Those effects do not at all match the goals and intentions of the policies, so we must judge according to effects, not the intentions. As the aphorism says, you shall know a tree by its fruit.
To learn more about Bidenomics, click here.
Vance Ginn, Ph.D.