The failure of a red tidal wave to sweep the midterms is concerning, because it means that the nation is in for at least two more years of reckless spending.
Biden’s three signature economic plans—the American Rescue Plan Act of 2021, the Consolidated Appropriations Act of 2021, and the Inflation Reduction Act of 2022—cost a combined nearly $5 trillion dollars. They contain contradictory policies and goals, which will waste money, increase the debt, pump up the deficit, and make inflation worse.
Democrats have been pushing for a $15-an-hour minimum wage, which would be destructive to small businesses. Wages consume 20 to 35 percent of revenues for most businesses, and more than doubling the minimum wage would completely decimate any profits. This could cause all but the largest retailers, like Walmart, to shut down. Those that remain open would have to dramatically increase prices to compensate for higher costs. At the same time, Biden’s plan for fighting inflation was to tell businesses to “lower your costs, not your wages.”
Is it possible that the president doesn’t know that wages are a cost? Or, does he not understand that a basic profit calculation is revenue minus cost? Does he not realize that since companies are in the business of trying to earn more profit, they’re constantly cutting costs and trying to find ways to operate more efficiently? It’s hard to believe that anyone hearing his message would go back to their company and introduce cost-cutting measures that no one had thought of before.
The American Rescue Plan also continued eviction and foreclosure moratoriums—something that would have also been unnecessary if Biden had just let people work. Additionally, the program subsidized COVID-19 testing and vaccination programs, which, in many instances, became a requirement for participating in public and economic life, further dampening the country’s economic recovery.
The spending in the American Rescue Plan came in addition to nearly $900 billion of stimulus included in the $2.3 trillion Consolidated Appropriations Act of 2021. The enhanced unemployment benefits covered in the act added $300 per week of federal money, on top of state unemployment checks, for up to 79 weeks. Unemployment benefits vary from state to state, but most states pay a maximum benefit equal to 50 percent of income for a maximum of 26 weeks. With the additional $300, low-income workers were receiving more than they would have if they had been working. On top of this, they received stimulus payments. People were being paid to stay home for an extended period of time, which is why businesses are now suffering from a shortage of labor.
The Inflation Reduction Act of 2022 will cost more than $700 billion. It’s meant to decrease inflation by increasing government spending. Inflation is caused by government spending, government debt, and the government printing money, so it’s unclear how spending more government money will fix inflation.
If Biden were taking an Economy 101 exam, he would receive an F for his answers on how to fight inflation.