• Tag Archives Biden
  • Economists Slam Biden Stimulus as ‘Economically Unjustified’ Plan That ‘Incentivizes Unemployment’

    President Biden has abandoned bipartisan compromise and pushed full-steam-ahead to pass his entire sweeping $1.9 trillion COVID-19 spending package. The president’s proposal includes $1,400 “stimulus” checks for more Americans, $350 billion to bail out state and local governments, a renewal of super-charged unemployment benefits through September, money for vaccine distribution, a federal $15 minimum wage, and much, much more. Democrats in Congress are determined to mark up the bill over the next few weeks and pass it by early March.

    But the state of the economy doesn’t support this spending bonanza—not even close. 

    The nonpartisan Congressional Budget Office is projecting a “rapid” resurgence in economic growth and a slower but steady return to pre-pandemic employment levels without any further stimulus. (We’ve already spent an astounding $4 trillion). And top free-market economists interviewed exclusively by FEE all argued that Biden’s drive for more massive stimulus is driven by politics, not sound economics.

    We absolutely don’t need another multi-trillion dollar stimulus,” Texas Tech economics professor Alex Salter said. “We’ve already spent $4 trillion fighting COVID since last year. Lack of spending isn’t our problem. Government should spend more on producing and distributing the vaccine, and otherwise get out of the way.”

    Meanwhile, economist Stephen Moore of FreedomWorks argued that government spending can actually be a negative for the economy, because the money has to come from somewhere else. 

    “Helicopter money merely redistributes wealth—it does not create it,” he said. “We don’t need this extra stimulus.”

    Moore, who served as a top economic advisor for former President Trump, compared the Biden effort to similar stimulus bonanzas under the Obama administration, which resulted in the slowest economic recovery since the Great Depression.

    “We learned from the Obama $830 billion “shovel ready” plan that Keynesian stimulus does not work,” Moore said. “Obama’s own numbers indicate that we ended up with fewer jobs than if we had done nothing at all to ‘stimulate’ the economy.” 

    Another prominent free-market economist, Mises Institute Senior Fellow Robert P. Murphy, offered a similar assessment. He called the Biden proposal “economically unjustified” and suggested that “any of its good features could be achieved more directly through other policies.”

    The economists interviewed by FEE took issue with not just the Biden plan’s massive spending levels and sticker price, but also several of its specific proposals such as more “stimulus” checks and the further expansion of ultra-generous unemployment benefits—originally sold as “temporary” last March—that would result in many Americans earning more money by not working, thereby disincentivizing employment.  

    “More checks don’t make sense,” Salter, the Texas Tech economist, said. “Household balance sheets are strong. Many households saved large portions of the previous checks. Yet another direct payment isn’t about economic stability. It’s about buying political support.”

    For his part, Murphy sympathized with the plight of those crushed by COVID-19 lockdowns but still viewed the checks as a misguided proposal.

    “It is understandable that citizens want relief checks to compensate for coercive measures preventing them from earning income, but we shouldn’t continue this trend of everyone getting checks from the government,” he said. “Ultimately the public isn’t made richer by paying taxes that are then partially handed back to them.”

    The economists had particularly harsh words for Biden’s proposed expansion of unemployment benefits way above normal levels. Unemployment payouts have long been shown in economic research to prolong unemployment and increase its baseline level.

    “Expanding unemployment benefits during a recession has a predictable result: slower employment recovery,” Salter argued. “We should be helping people get back to work—not making it more financially attractive to stay home.” 

    The $400 a week unemployment benefit bonus included in the proposed bill incentivizes unemployment because it pays people not to work,” Moore added. “Passing this bill means risking the loss of more than 5 million jobs if people opt to receive unemployment benefits rather than work.”

    In sum, though, the economists all agreed that no amount of spending can “stimulate” an economy that is in some places still locked down, and in many places still at least partially restricted. If people cannot legally go to work or engage in commerce, no amount of money-printing or number of blank checks can bring about prosperity, they agreed.

    “The best thing we can do for long-run economic health is get everything opened back up safely,” Salter said. 

    Murphy reached a similar conclusion, arguing that “the best way to help the economy is to end political lockdowns, allowing businesses, workers, and  customers to find the optimal mix of protective measures to deal with the threat of COVID-19.”

    Of course, Biden’s “stimulus” legislation is really a political wishlist, chock-full of partisan policies like a $15 minimum wage and subsidies for poorly-managed blue states. Yet this isn’t immediately obvious from Biden’s rhetoric or much of the media’s coverage. As a result, the proposal polls well with voters.

    With the growing chorus of free-market economists calling out the president’s pretense, hopefully the public will soon realize that there’s little economic justification for Biden’s political spending push.

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    Brad Polumbo

    Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and Opinion Editor at the Foundation for Economic Education.

    This article was originally published on FEE.org. Read the original article.


  • 28 Executive Orders in Just 2 Weeks. What Kind of a ‘Democracy’ is This?

    Since taking office two weeks ago, President Joe Biden has signed 28 executive orders (EOs) covering a wide range of policies. His actions are not unprecedented, per se, but he’s on track to surpass one record held by Franklin D. Roosevelt—the record for most EOs signed in the first month in office. FDR had thirty.

    Additionally, Biden issued four proclamations, one ceremonial, ten memorandums, and two letters (rejoining the Paris Climate Agreement and the World Health Organization).

    It’s notable that sixteen of the twenty-eight orders are reversals of former President Trump’s own executive actions. Six of them specifically target the immigration policies of the previous administration. Readers may remember controversial decisions over the past four years that placed restrictions on travelers from certain Muslim-majority countries, funded the construction of a border wall through a national emergency declaration, separated families at the border, and expanded immigration enforcement. With the stroke of a pen, Biden reversed course on these initiatives.

    Unsurprisingly, a large number of the orders revolve around the coronavirus, as presidents tend to issue more EOs during wartime or other national emergencies. Fifteen of the twenty-eight EOs address things like wearing a mask in public spaces (an order Biden violated his first week in office), accelerating the manufacturing and delivery of vaccines, establishing a pandemic testing board, enhancing data-sharing processes, and developing guidelines for reopening schools.

    Other orders focused on economic issues, such as halting the payment of student loans for several more months and extending a nationwide moratorium on evictions. Biden’s actions on the climate created some of the biggest pushback as he cancelled the Keystone XL pipeline and directed agencies to reverse more than a hundred of Trump’s actions on energy. He also turned his attention to matters of equality, allowing transgender Americans to again serve in the military, canceling contracts with private prisons, and addressing workplace discrimination on the basis of sex or gender.

    All in all, he’s already made quite an impact on the country’s operations.

    The power of the presidency has rapidly expanded in recent decades, and the use of executive orders has grown in direct proportion. Simultaneously, the passage of real, long-lasting legislation has fallen by the wayside, creating an environment where the roles of the executive and the legislature have been reversed.

    Historically and constitutionally, the presidency was not meant to set policy. After eight years, President George Washington left office with a total of only eight executive orders. Most of his predecessors followed suit with numbers in the single digits or teens. Many of the early EOs involved trivial matters rather than the large-scale policy decisions we often see them aimed at today. The naming of post offices, establishing federal worker holidays, and organizing federal natural disaster responses were more in line with the scope of these directives originally.

    But in the twentieth century, use of the executive order exploded with Theodore Roosevelt, FDR, Woodrow Wilson, and even Mr. Limited Government himself, Calvin Coolidge, issuing well over a thousand during their tenures. It is now common to see several hundred under each new executive.

    This evolution can at least partly be blamed on Congress’ delinquency in its duties. It is the House and Senate’s job to write and pass laws. But in recent years, Congress stalled as partisanship led to greater gridlock and entrenched opposition between the two major political parties.

    Interestingly, the legislature continues to introduce an overwhelming number of items—they’re just not passing them. In 2019, they brought forward 8,820 bills and joint resolutions, but enacted only 105—making Congress largely a performative body rather than a functional one.

    Members are told how to vote by their party’s leadership and stripped of any semblance of power if they fail to comply. They are usually not allowed to offer amendments or even really see the bills they are voting on beforehand.

    Former Representative Justin Amash opined on this issue extensively, regularly pointing out that rank and file members no longer have the ability to shape legislation as Congress has consolidated control in the hands of leadership.

    Due to this, the vast majority of lawmakers now spend their days fundraising, riling up the base, and giving media interviews.

    Some are unusually candid about the fact that they see their role as a spokesperson rather than a lawmaker.

    For this reason, presidents have increasingly sought to push their agenda forward independent of Congress. And to an extent it has worked, as far as pushing agendas, but there have been consequences.

    The unilateral actions have stoked tensions and animosity among Americans, as whichever political party is currently in control has the ability to disregard the wishes of the half of the country that lost the latest election. It isn’t supposed to be this way.

    Our legislative body was intentionally given the power to set policy for this reason.

    It requires hundreds of lawmakers, who represent hundreds of millions of unique individuals across this country, to come together, deliberate, seek compromises, and pass legislation that achieves a broad consensus. That type of action breeds unity and peaceful coexistence.

    Instead, we essentially get a single person ruling by decree, pushing quick and unchallenged decisions through without debate and with few checks or balances. This is a system more akin to a rotating autocracy than a democracy, and is, frankly, un-American.

    Thomas Jefferson once said, “A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.” When a single person can unilaterally dictate the choices and decisions of hundreds of millions of people—half of which may oppose the order— it is even worse than a pure democracy, it’s a recipe for discord, bitterness, and agitation.

    Both sides know this and yet continue to perpetrate the problem. Republicans fumed as former President Barack Obama signed large numbers of executive orders, and Obama shrugged them off, famously quipping “elections have consequences,” and boasting that he can disregard Congressional resistance, because he has “a pen and a phone.” But that attitude came back to haunt the progressives when President Donald Trump was elected and took the same attitude and pen. Many spent years railing against the illegality of Trump’s actions and admonishing him for not using the legislative processes laid out in the Constitution, only to quickly forget that posture when Biden came into power. It’s a hamster wheel of bad ideas and the wheel keeps speeding up with each new president.

    Not only do these actions worsen tensions in the US, they also produce unsolid ground. When presidents use these orders to overhaul policies and procedures they can make a significant impact on the daily lives of millions of people. Even worse, though, is the knowledge that the next president may come in and totally erase those actions. This means many Americans are left unable to plan their futures or find stability under the law. One need only examine the plight of the typical undocumented immigrant over the past five years to see proof of this, or consider the workers tasked with finishing the Keystone XL pipeline who suddenly found themselves out of work.

    When our laws are set by the president instead of the legislature there is an impermanence to them on top of an unfairness. This is no way to govern.

    America was not designed on a whim. Our Founding Fathers crafted our systems to protect the rights of the individual, to guard liberty from government, and to ensure those tasked with power over the people had many checks and balances. It was a brilliant configuration, one designed not to enable government but to restrain it.

    It would be silly to think that one person, who it must be mentioned only received 82 million votes in a country with over 330 million individuals, could fairly and justly write the rules for all people. Whether or not we like the orders issued by one president or another, we should all be able to agree this is an unwise way to rule that undermines our very foundations.

    In The Federalist Papers No. 51, James Madison laid out his vision and reasoning behind the separation of powers he was proposing under the new constitution.

    “Were the executive magistrate, or the judges, not independent of the legislature in this particular, their independence in every other would be merely nominal. But the great security against a gradual concentration of the several powers in the same department, consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others.”

    The founders not only realized the importance of the separation of power, they provided checks and balances that allow departments to rein in other branches when they supersede their authority.

    It must be demanded that our lawmakers go back to their desks and do their jobs, which includes exercising their check on the presidency’s powers. It remains unclear why we are currently paying these people hundreds of thousands of dollars per year when they cannot seem to gather in a room and figure out solutions to the numerous problems pressing themselves on our people. Until our citizens rise up and demand better of them, they will continue to enrich themselves on our dimes while failing to do the very job we have sent them to DC to do.

    On matters of immigration, energy, equality, and the pandemic, we as a country are in desperate need of solutions. Those solutions shouldn’t always be government-based, and they definitely shouldn’t depend on a seventy-eight year old man with a limited knowledge in any one of these topics. We fought the British to free ourselves from the rule of a monarchy, we must reject it on our own soil today as well.

     Hannah Cox


    Hannah Cox

    Hannah Cox is a libertarian-conservative writer, commentator, and activist. She’s a Newsmax Insider and a Contributor to The Washington Examiner.

    This article was originally published on FEE.org. Read the original article.


  • New Stanford Study Suggests Biden’s Agenda Will Have 4 Devastating Economic Consequences

    Sympathetic media outlets have repeatedly asserted that Democratic presidential nominee Joe Biden’s tax agenda would only hurt the wealthy. But a new study shows that Biden’s tax and regulatory agenda could seriously hurt the economy overall.

    Four economists from Stanford University’s Hoover Institution analyzed Biden’s proposals to increase taxes, reinstate and expand a host of regulations, and create new subsidies for healthcare and renewable energy. The study concludes that these interventions would distort labor incentives, decrease productivity, and kill jobs.

    As a result, the experts project that the policy agenda would, by 2030, lead to 4.9 million fewer jobs and the economy shrinking by $2.6 trillion. So, too, the study projects that consumption would be $1.5 trillion lower in 2030 and families would see a $6,500 drop in median household income compared to a neutral scenario.

    “The risk from Joe Biden’s policies isn’t that they will send the economy reeling right away,” the Wall Street Journal editorial board concluded in its analysis of the study. “The problem is that they will have a long-term corrosive impact by raising the cost of capital, reducing the incentive to work and invest, and reducing productivity across the economy. Americans will pay the price in a lower standard of living than they otherwise would—and that they deserve.”

    It’s crucial to understand not just what Biden’s government-heavy agenda would do to the economy, but why.

    Tax hikes hurt the economy because they reduce incentives to work and produce.

    “Taxing profits is tantamount to taxing success,” famed free-market economist Ludwig Von Mises once wrote. “Progressive taxation of income and profits means that precisely those parts of the income which people would have saved and invested are taxed away.”

    Biden has promised to raise the corporate tax to 28 percent. Higher corporate taxes means less money available for investment, expansion, and new hiring—“taxing success,” as Mises wisely dubbed it. This means fewer jobs and lower wages for workers, as well as fewer offerings (especially of innovative new products) and lower quality for consumers.

    This is why, while corporate tax hikes might sound like something that would just hurt “Big Business,” in reality, the costs would be passed on to consumers and workers. According to the Tax Foundation, “studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome.”

    Considering this, it should come as little surprise to see economists projecting negative economic consequences as a result of Biden’s hefty tax hikes.

    As far as heavy-handed regulations are concerned, they create a drag on the economy by imposing additional costs and stifling innovation. The more red tape and hoops companies and entrepreneurs have to jump through and comply with, the less likely they are to discover new ideas and make breakthroughs. So, too, the more regulated an industry, the harder it is for start-ups to take on the big established companies that can better weather the costs of regulation.

    Reducing competition means reduced innovation and more complacency.

    Yet the real takeaway from this Stanford study is not about any one candidate, policy, or party. It’s another reminder that free markets and economic liberty drive prosperity—but heavy-handed government interventions hurt more than they help.

    Brad Polumbo


    Brad Polumbo

    Brad Polumbo is a libertarian-conservative journalist and the Eugene S. Thorpe Writing Fellow at the Foundation for Economic Education.

    This article was originally published on FEE.org. Read the original article.