It is one of the unfortunate ironies coming out of the Biden administration that, with all the obsession about so-called equity, policies coming out of the White House will only hurt the very low-income Americans they pretend to want to help.
The Biden administration is growing government at a record pace.
If what Biden wants is opportunity for every American, government policy should aim to encourage economic growth. Bigger, more intrusive government achieves the opposite. It stifles economic growth.
The Biden administration submitted its first 10-year budget to Congress last month.
The budget projects average annual economic growth for 2023 through 2031, after Biden is done with all the stimulus spending in 2021-2022, of 1.9%.
What does 1.9% growth mean?
Economist John Cochrane, of Stanford University’s Hoover Institution, notes that, from 1950 to 2000, the U.S. economy grew 3.5% per year. Average real income over that period grew from $16,000 per person to $50,000.
Cochrane asks us to suppose that, instead of 3.5%, growth over those 50 years had been 2%. Under that scenario, a $16,000 income would have grown to only $23,000.
In reality, average growth since 2000 has been more sclerotic than in the previous 50 years—in the range of 2%.
What’s the problem? Too much growth of government, says Cochrane.
Per Glenn Hubbard, who headed the Council of Economic Advisers under President George W. Bush, the average portion of the U.S. economy that government was taking in those 50 years after World War II, when growth was averaging 3.5%, was around 20%.
The average portion of the economy that government will take over the next 10 years, per Biden’s budget, is 24.5%. At least Biden’s economists are being honest to project anemic economic growth that will accompany this huge growth in government.
One of the major spending initiatives in Biden’s plans is what he’s calling the American Families Plan, with a price tag of $1.8 trillion.
At a time when we have historic drops in our fertility and marriage rates, the Biden administration somehow thinks, contrary to experience, that massive new government spending and entitlement programs will be a boost to the American family.
Hoover Institution’s John Cogan and Daniel Heil call this massive expansion of government entitlements “the largest expansion since Lyndon B. Johnson’s Great Society.”
“For the first time in U.S. history,” they note, “except possibly for the pandemic years 2020 and 2021, for which we don’t yet have data—more than half of working-age households would be on the entitlement rolls.”
With all our division and disagreements today, there is no disagreement that the vile institution of slavery, once present and legal in America, was shameful. We all agree it is a blot.
We all also agree that racism is deplorable.
But the reason slavery and racism are terrible is that every human being must live with dignity and in freedom.
How can we arrive at the conclusion that the remedy and antidote to slavery and racism is putting all Americans on the government plantation?
Not only is it immoral, but it doesn’t work. Government is supposed to be about protecting, not confiscating, our life, liberty and property.
If we want every child in America, of every background, to realize his or her potential, let’s strive for their dignity by making sure they grow up in a free country.•
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An excellent column, Star, as usual. Thank you.
Thank You Star!! Some common sense
Star, You seem to believe that economic growth represented by a percentage is a percentage that becomes equally distributed. You should know better because the economic growth of the past was, as is easily identified, NOT equally distributed.
I appreciate your biased position as, most likely, one who benefited from that economic growth; however, you might realize that a smaller economic growth more evenly distributed to bolster lower and middle class Americans is an investment in the future when the economic growth of the past, which you so proudly espouse as representative of a wise economic policy, has truly done nothing more than exacerbate inequalities within our economic policy.