Economy Ready To Boom Without Biden’s Spending Blowout

Economy Ready To Boom Without Biden’s Spending Blowout

Despite Democrat’s many claims of pending economic doom, our economy is ready to boom as COVID-19 cases inevitably decline. And no one will benefit more than President Biden if he and Congressional Democrats can avoid messing things up.

Here’s why.

Americans responded to the pandemic by making an unprecedented upward leap in their personal savings rate. In April 2020, Americans saved an extraordinary 33.7 percent of their income, far above the long-term average of a little over seven percent.

Last spring’s savings were the result of both personal caution and business lockdowns. But the savings trend has continued as spending patterns have changed and some states continue to enforce draconian lockdowns. Our national saving rate in December 2020 was still far above the norm at 13.7 percent.

Elevated COVID-19 cases continue to keep personal savings rates far higher than average. A Census Bureau survey found that 55 percent of consumers used their January federal “stimulus payments” not to stimulate the economy but to pay off debts and an additional 25 percent said they saved it.

But as increasing numbers of us are vaccinated and warmer weather allows us to spend more time outdoors, a veritable flood of personal spending will erupt as the urge to break out of self-isolation overwhelms us.

Our economy would be best served if Democrats did absolutely nothing. By next fall, they could take (undeserved) credit for a booming economy, dramatically lower unemployment, and growing wages across the board.

Democratic leaders realize all this but propose to use the current, transient condition as an excuse to enact an unneeded $1.9 trillion flood of government spending. In Rahm Emanuel’s famous words, “Never let a crisis go to waste.” In this case, hide a far-left wish list wolf in pandemic sheep’s clothing.

To provide cover for their aims, leading Democrats would have us believe that our economy is in crisis. A Washington Post headline screams, “Biden inherits the worst job market of any modern president.” Bernie Sanders claims, “The working class of this country today faces more economic desperation than at any time since the Great Depression of the 1930s.”

Neither of these over-the-top claims is anywhere close to true. Look no farther than today’s 6.3 percent unemployment rate. In February 2009 when Obama and Biden took office, the unemployment rate was 8.1 percent. Not until May 2014, over five years into their tax-and-regulate administration did the unemployment rate finally drop to 6.3 percent.

Here’s a rundown on some of the worst parts of the Democrats’ proposal.

Just as in January, most of Biden’s $422 billion in stimulus payments to individuals will be socked away now and then added to a consumer spending binge in the summer when they’re no longer needed.

Possibly the worst idea in a bill loaded with bad ones: $350 billion for state and local governments despite the fact that they have run a net budget surplus through 2020’s third quarter thanks to previous federal funding. An extra portion of this giveaway goes to states with the highest job losses, blue states like New York, Michigan, and Massachusetts where governors continue to lock down businesses.

In contrast, red states like Texas, Georgia, North Carolina, and South Carolina have added jobs in recent months. Conservative Utah is one of two states that has more people at work today than it had a year ago and our unemployment rate is 3.6 percent thanks to prudent state guidance on coping with the pandemic.

Despite agonizing over today’s blue state unemployment rates, Democrats propose raising the federal minimum wage to $15 per hour. According to the non-partisan Congressional Budget Office, this terrible idea will cost 1.4 million low-paid workers their jobs, completely at odds with the bill’s intent.

Kowtowing to teachers’ unions, Biden included $130 billion to help school districts reopen, saying, “Another 100-day challenge is opening most of our K-through-eight schools by the end of the first 100 days in the spring. Look, we can only do that if Congress provides the necessary funding.”

Biden and teachers’ unions ignore scientists at the Center for Disease Control who say that “there has been little evidence that schools have contributed meaningfully to increased community transmission.” States like Utah that prioritized vaccinating school teachers and staff have opened their schools.

The Chicago teachers’ union has figured out how to play Biden’s game by committing to “reopen” as little as one day per week with remote learning the other four. Voilà, they get the money while students and working parents get no relief. Rahm Emanuel is smiling.

Long the party of “tax and spend,” Democrats now have become the party of just plain “spend.”

The upshot of Democrats’ spending blowout: By flooding the sympathetic liberal media with fraudulent claims of economic distress, Democrats lay the basis for claims later in the year for a Biden “economic miracle” when the inevitable consumer spending flood tide begins.

This $1.9 trillion spending extravaganza shows that Biden and the rest of his party have been completely co-opted by an extreme left-wing wish list: expect 100 percent of Congressional Democrats to support it.

Democrats know that “free” stuff always plays well with voters.