Democrats’ Phony Solution to Our Real Economic Problems

By Kevin D. Williamson

Friday, October 08, 2021

 

In spite of a generally friendly — and, indeed, often prostrate — press, President Joe Biden did not get much of a honeymoon. In an age of low expectations, Biden manages to underperform.

 

When he came into office, the economy already had roared back from its COVID-induced interruption, and the vaccine rollout had Americans giddy at the possibility that the epidemic was behind us. It is not the Biden administration’s fault that the Delta variant has since ravaged the country, but there is a sense, far from unfair, that President Biden was dealt a pretty good hand and hasn’t made much of it.

 

And so President Biden is trying to turn things around in the traditional Washington fashion: by spreading around other people’s money.

 

Lots of money.

 

The numbers being thrown around — $3.5 trillion or more — are something close to literally incomprehensible. Yes, all numerate people can define 1 trillion, but it is hard to really get your head around it. When the New York Times erroneously writes $3.5 billion instead of $3.5 trillion, it is easy to make fun of, but it also is easy to see how that goof sailed over the heads of the copy desk.

 

Here is something for scale:

 

1 million seconds ago, it was late September.

 

1 billion seconds ago, Tom Cruise was picking up a Golden Globe for Born on the Fourth of July.

 

1 trillion seconds ago, nobody had ever written a sentence, planted a crop, or lived in a house, and our ancient ancestors were still finishing off the last of the Neanderthals.

 

1 trillion minutes ago, Homo sapiens had not yet appeared on Earth.

 

1 trillion hours ago, T. rex and triceratops were still going strong.

 

1 trillion days ago, the first life on this planet had only just appeared, and it was all still single-celled organisms.

 

So, $1 trillion is a lot. And $3.5 trillion in cash would make a pile of money weighing as much as 40 Nimitz-class aircraft carriers.

 

Why spend that big pile of money now?

 

You can flash whatever gang sign you like in the great Keynesian–Austrian debate, but the usual practice is to put forward big deficit-enabled spending packages when the economy is in recession, as a stimulant. And that is not where the U.S. economy is right now: After the big bounce in the third quarter of 2020, which saw GDP shoot up by 34 percent, we have seen consecutive quarters of strong growth — 4.5 percent, 6.3 percent, and 6.5 percent.

 

Q3 is going to come in weaker because of the viral surge. That’s a problem, but you don’t throw $3.5 trillion at one weak quarter.

 

And it is clear that the Democrats would still be hellbent on passing that spending as quickly as possible even if the economy were doing one-handed cartwheels through a field of daisies. The only reason for the urgency is the fact that the Democrats believe, not without reason, that while the Republican Party may be dumber than nine chickens and blessed with the spiritual fortitude of a nematode, it probably is still going to have a good off-year election. And so they will do everything short of that Godfather Part 3 helicopter to push that money out the door before they lose control of Congress. Senator Sinema had better figure out a way to call in her votes from some witness-protection hidey-hole in South Dakota.

 

We do have a serious economic problem right now, but it is not one that can be solved through policymaking magic. Government has two big tools for amping up the economy: monetary policy and fiscal policy. They work through different mechanisms, but they are intended to have the same result: sending a great flood of money sluicing through the economy. Government can do a lot by manipulating money, but money is only a record-keeping system — the real economy consists of goods and services, and there is where we are having some troubles. The economic disruption of the epidemic has left the world with lingering supply-chain issues, making it difficult to produce everything from computer chips to toilet paper — and making it much more difficult to move what is produced to where it needs to be. We can’t deal with those overcrowded ports and hobbled factories by waving the magic legislative wand. Senator Schumer may be surprised to hear it, but he cannot legislate 20,000 eager stevedores into existence.

 

None of the real trouble in our economy is going to be fixed by new child-care subsidies for middle-class suburbanites. None of it is going to be fixed by debt forgiveness for public-school teachers and government lawyers or by expanded welfare benefits in West Virginia.

 

There is, in fact, very little real connection between these gigantic spending proposals and our immediate and most urgent needs. But the Democrats are forever committed to producing imaginary solutions to real problems. One problem: Progressive superstitions notwithstanding, once you’ve committed that $3.5 trillion to phony solutions, there is $3.5 trillion less available to spend on what you actually need. We can spend one or two or three or three-and-a-half or five trillion on “human infrastructure,” and still have a half a million containers of cargo floating off the coast of southern California.

 

President Biden may call that an investment, but it’s more of a pillage.