The U.S. economy under President Biden has got the hiccups, and that’s a bad thing. His remedial blueprint is chock-full of initiatives that will only make things worse. As the president’s Democratic allies battle opposition Republicans — and each other — to a legislative standstill, his agenda sinks slowly into doubt. That’s a good thing because spending into oblivion to cure the current malady is economic malpractice.
As an article of his progressive faith, Mr. Biden sees dark times as ideal conditions for radical change. Despite the economy glowing brightly with 6.7 percent growth in the second quarter, according to the U.S. Bureau of Labor Statistics, the president is tramping before the TV cameras with a long, black-masked face, warning of impending doom without passage of the largest spending proposal in U.S. history.
Mr. Biden’s $1.2 trillion “infrastructure” proposal, which apportions only 9 percent for roads and bridges, languishes in limbo. Far-left-wing Democrats insist they will only back the plan if it is linked with his $3.5 trillion Build Back Better bill. If passed, the package would arguably transform America into a socialist nation, showering the landscape with federal benefits such as free child care and preschool, free community college, Medicare expansion, and paid family leave.
Government gelt of that magnitude would supercharge inflationary pressures that already pushed up prices in August 4.3 percent year over year, the highest rate in three decades. Printing and pumping trillions more into a hot U.S. economy would trash the Federal Reserve’s optimum benchmark of 2 percent annual inflation, a likelihood Fed Chairman Jerome Powell ominously acknowledged last week.
American consumers have felt the personal pain of Biden-style economic stewardship. Average 2021 wage growth of 2.9 percent isn’t keeping up with the likes of a 46 percent gasoline price hike that has added around $15 to a fill-up or the 8.6 percent rise in wholesale food prices that has blown away the popular Dollar Menu at McDonald’s.
It should be no surprise, then, that a survey published jointly by the Convention of States Action and the Trafalgar Group found more than 71 percent of respondents claiming they would be less likely to back Mr. Biden’s $3.5 trillion spending plan if it increases taxes and the national debt.
Accordingly, moderate Democratic Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia want to cut the bill’s price tag in half. Shortening the spending period from 10 years to five would serve as a price chopper. Means-testing would also save money: The wealthy don’t need an $85 billion annual tax cut that would result from repeal of the $10,000 deduction cap on state and local taxes tucked into the bill.
The Republic’s Founders built in a susceptibility to legislative gridlock as a remedy for the sort of economic malady Mr. Biden’s plans would unleash. Moderation can be contagious, and that’s a very good thing.