I was wrong to vote for Biden

 I see that it has been sometime since I last posted anything.  The primary reason was that I knew I had to make the confessional headline.  I clenched my teeth, held my nose, and loosened my bowels, then put the X beside the Biden-Harris ticket.  I had bullyragged myself into believing they could restrain the red (in the old fashion sense of socialistic) wing of their party and focus on drawing a battered country somewhat closer together, maybe even close enough that an old-fashioned conservative President could be elected to govern us decently.

But, with indecent haste, Biden-Harris and the whole damned squad started right in on the Democrats’ program of confiscation and redistribution.  They are targeting the top 1.8 percent of taxpayers—those making more than $400,000—and, according to an analyst at what even a media outlet calls “a left-leaning think tank”, are really targeting the top 1 percent or even one-tenth of a percent.

But here’s the problem:  Even if you took all, I say again all, of those top 1.8-percenters’ money, you wouldn’t make up for the roughly $5 trillion the Biden administration has allocated for economic stimulus in response to the Covid-19 pandemic and proposed for pork-barrel infrastructure spending.[i]

The top 1.8 percent of household account for about 25 barely percent of all income, according to Census Bureau data for 2019.[ii]  Personal income in the United States in 2020 totaled just under $20 trillion.[iii]  Do the math.  (I apologize to my old colleagues in the Federal statistical system; I am in the process of learning why outsiders take these kinds of mix-and-match liberties.)

And just covering the new spending on pandemic relief and does nothing for the $20 trillion in public Federal debt that was owed as of August last year.  The upshot of all this is that saying the “rich” are going to pay all of even the newly squandered debt is selling a pig in a poke.  Not only does that represent literal confiscation of the group’s income, it ignores the fact that these folks can afford lawyers and accountants skilled in finding the legal and financial holes in the confiscatory nets.

So, it will be added to the burden on my grandson.  His share of the current national debt is about $80,000.  The new, and probably never-to-be-extinguished, debt already brought on by the Trump and Biden administrations responses to the public health crisis and the Biden administration’s “jobs bill” will be another $13,000 by 2036, the year the leftists assure us the rich will have paid off all their spendthrift indulgence.  The total my grandson will be responsible for (you know they aren’t going to take responsibility for anything), will be somewhat north of $90,000.  The boy is only 4 and has only a tenuous grasp of the tens place, so he’s not worried now.  But when he’s 19 and the only people left that don’t categorize themselves as rich, and thus taxable, are elected officials and their accomplices, who can tell what he’ll grasp.

So in the end I have to admit I was wrong and should have written in “None of the above”.  No president would be better than what we have or, even more emphatically, than what the alternative would have been.

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[i] COVID Relief Spending | USAspending

[ii] Income, Poverty, and Health Insurance Coverage in the United States: 2010 (census.gov)

[iii] Personal Income and Outlays, February 2021 | U.S. Bureau of Economic Analysis (BEA) Table 2

Good to see that someone gets it

 Megan McArdle, writing in the March 8 Washington Post, is the first established scrivener to get out there and state that the $2000-minus-$600-equals-$1400 checks do not address the extraordinary nature of the current economic crisis. (See Opinion | Stimulus checks are the most indefensible part of the covid relief bill - The Washington Post.) Much as I have suggested (see November 13 post, “This is not your father’s business recession”), McArdle understands that this “stimulus” is “borrowed from an earlier recession by people who don’t seem to understand the fix we are in at the moment.” 

As Ms. McArdle and I agree on, what we do need at the moment is a plan for re-starting the millions of face-to-face businesses that were shut down by governments as a public health policy.  Getting a business back on its feet takes a lot more than just sprinkling money into customers bank accounts. 

In fact, that may not even be most important thing.  There will be huge questions like,

·             Can I get a loan to restart if my credit rating is shot due to almost a year of bupkus for revenue?

·             Will my bank be able to give me a loan without endangering their position with the bank regulators?

·              Have any of my suppliers survived and will they be in a position to give me credit?

·             What’s my experience rating at the unemployment insurance agency going to do to my unemployment insurance tax when I re-hire people?

·            What will I do for staff if my old team has found other work or moved back to Toledo to live with their parents?

·             If all else fails, will the courts be ready, willing, and able to handle a surge in Chapter 11 reorganizations?

Regarding the size of Covid stimulus

 The debate about how many more dollars the Federal government should spend buying votes reminds me of a parable on Republican versus Democratic approaches to being "from the Federal government and here to help you."

A swimmer is drowning 100 feet offshore.   A Republican casts out 50 feet of rope and urges the swimmer to "swim to the rope and I'll pull you in; it'll be good for your character." A Democrat throws out 200 feet of rope and walks away looking for another cause to feel good about.

What would I have him cut?

Upon being criticized for his way-over-the-top goodie bag program, President Biden asked, “What would they have me cut? Here’s the easy half-trillion plus.  You got my vote Joe; and you won the election.  So you and your experts can find the other half-trillion minus needed to get this puppy in line with even a generous guess at the limits of prudence.

Item	Saving (in billions)
Reduce $1,400 to $700 in “helicopter” money	$211.0
Keep UI benefit supplement at $300 per week	$61.5
Cut state, local, territorial, tribal funds by half	$175.0
No minimum wage increase, per rules of order	$54.0
Limit added EIDL grants to $8,000	$3.0
Sharply reduce the foreign affairs line	$5.0
Total	$509.5

 

Breaking the national debt barrier

A few days ago, the Washington Post gravely informed us that “…federal debt is set to exceed the size of the entire U.S. economy this year for only the second time since the end of World War II.”  What wasn’t said (but could be gleaned from the report’s graphic) was that debt was projected to remain above 100 percent of gross domestic product (gdp) every year from now until 2031, the end of the Congressional Budget Office’s (cbo) projection horizon.

It is also disturbing that cbo based the analysis the Post used as their source on current policy; that is, without including the additional $2 trillion that the leftist current administration is ramming through Congress under procedures that evade the proper examination and debate such a radical scheme should be subject to.  The President has spoken soothingly but has shed his sheep’s clothing to bring the wolf to the Treasury door.

The first thing the administration should do is get the monies already legislated to their intended recipients.  For example, there are $50 billion left earmarked for subsidizing state and local governments.  Just write a $1 billion check to every State; that would get even the Californians and New Yorkers to shut up for a minute and give Congress the chance to more carefully consider a plan that involves throwing another $350 billion into that rathole.

Under his administration’s current proposal, “Biden wants to send $350 billion to state, local and territorial governments to keep their frontline workers employed, distribute the vaccine, increase testing, reopen schools and maintain vital services.”  That all sounds peachy, but it’s money we don’t have in the Federal piggybank and is the State’s responsibility to raise for themselves.  So let’s see which of the wish list should really get Federal aid and put our borrowed money there.

Of the programs listed, the Federal government has done the most damage in the vaccine distribution crisis:  Slow recognition of the scope of the pandemic, an over-complicated test kit that failed and left us data poor for longer than could ever be excused, and another over-complicated planning framework for administering the inoculations.  Thus, we should be glad to help out with funding to distribute the vaccine.

As to the rest of the list, paying their employees clearly is the specific jurisdiction’s responsibility.  Increased testing has already gone past it’s use-by date.  Reopening schools is very much a local responsibility and the Federal government should try not to make things more difficult than it already has;  let’s see if the Department of Health and Human Services can issue meaningful guidance on something.  I’m not sure which “vital services” are covered in the proposal, but the most vital has already been covered under “distribute the vaccine.”

Prior to the current situation, the national debt barrier was only broken once; from 1945 through 1947, debt-to-gdp ratios exceeded 100 percent.  Today we are looking at 10 years of exceeding the debt barrier and it often seems like we are no closer to defeating this enemy than we were to defeating the Axis powers when the Marines landed on Guadalcanal in the summer of 1942. 

Just looking at numbers

 After all the raving nonsense about the Senate being an undemocratic structure, how are the lefties explaining why the Senate was more anti-Trump (57% to 43%) than the popular [genuflect] vote (52% to 48%)?  It is also interesting that the electoral college, another institution scourged as anti-majoritarian, also went 57/43 for the current ruling party that had been heretofore wielding the whips.

How much does it cost to lift one person out of poverty?

 

If you use more than doubling the minimum wage as the tool, about $760,000.  CBO estimated the Raise the Wage proposal would lead to a rise in business labor cost of $509 billion for those kept on payrolls and a decline in labor income of $175 billion among the 1.7 million that lose their jobs.  Thus, jacking the minimum wage to $15 per hour imposes a total cost of $684 billion on low-paying employers and low-wage workers.  This would lift 900,000 people out of poverty at a cost of $760,000 a head.

So, let’s be glad that the relief package seems to be going forward without this bomb nestled in its details.  Similarly, we should not move forward under "reconciliation" procedures on the extensive reform of the welfare system proposed by Senator Romney.  Minimum wage and welfare reform are topics that must be given the full, in-depth policy analysis and program design that can only be accomplished, however clumsily and with however much infuriating partisan grandstanding, by the regular legislative process. Give them both the whole nine yards—expert commissions, committee hearings, high-level negotiations with OMB and other executive branch players and so on and so on.  Try not to screw up.