And even liberals are starting to worry about the stakes.
And even liberals are starting to worry about the stakes.
J oe Biden finally released his proposed federal budget Friday, just before the Memorial Day holiday. It’s almost as if the White House didn’t want people to look at it too closely.
The Congressional Budget Office reports that if everything that Biden has proposed were to be approved by the Democratic Congress, the national debt would climb by $22 trillion over the next decade. That’s a $7.6 trillion increase in the deficit, and that’s after the recovery from COVID-19’s disruptions.
Here’s how the numbers stack up:
The publicly held debt would skyrocket from 98 percent of GDP in 2020 to 130 percent by 2031, eclipsing the debt level of 114 percent held by the U.S. just after it fought World War II.
Team Biden has decided that the big mistake Democrats made in the past was ever thinking they should worry about deficits, the debt, or a notion that you can spend too much money. The party consensus is that former President Barack Obama went “too small” during the Great Recession of 2009 with a stimulus package of under a trillion dollars.
Indeed, Senate majority leader Chuck Schumer told CNN in March: “We made a big mistake in 2009 and 2010. . . . We cut back on the Obama stimulus dramatically, and we stayed in recession for five years.”
It’s ironic that Democrats are now throwing Obama under a bus and agreeing he had a rotten record on the economy, with his policies causing a “five-year recession.” That five-year recession was one of the longest in modern times — a mini-depression.
Back in 2009, the Democrats promised that their “shovel-ready” projects would cause annual growth of 4 percent or more. But they never came close. Indeed, it was Vice President Joe Biden who a decade ago promised a “summer of recovery” that never arrived.
So Democrats believe their nearly $1 trillion of borrowing and wasteful spending in 2009 tanked the economy but that $6 trillion will now deliver economic prosperity. Good luck with that.
The eye-popping numbers in Biden’s budget are finally leading even some liberals to express worries.
Mike Allen of Axios reports that “some Democrats and economists have begun to worry that President Biden, intent on FDR-like transformation of a wounded America, is doing too much, too fast.”
Larry Summers, the treasury secretary under President Bill Clinton and the head of the National Economic Council under Obama, told Bloomberg News back in March that he thought Biden was pursuing “the least responsible macroeconomic policy we’ve had in the last 40 years.”
In late May, he followed that up with a warning that his initial fears about higher inflation were understated: “Data are pointing more towards higher inflation than I expected, and sooner.” Summers was backed up by uber-investor Warren Buffett, who warned, “We are seeing very substantial inflation.”
Summers has some agreement from other liberal economists. Jason Furman, the chairman of Obama’s Council of Economic Advisers, told Politico last week that Summers is merely saying “what everyone is saying over coffee and whispering. . . . He’s an outlier in the public debate because the people that have megaphones aren’t saying this on the Democratic side, but he’s well within a consensus view in the economics profession.” On Saturday, Furman tweeted that it is his sense in talking with “academic macroeconomists that are not part of the DC debate that about 90 percent plus think (Biden’s) American Rescue Plan was too large and 70 percent plus think the Fed is currently too dovish.”
But Biden isn’t listening to economists very much. He has been bewitched by a parade of liberal pundits and historians who have met with him. Their implied message: As a likely one-term president due to age, you can still go down in history as a near-great president if you create your own New Deal or Great Society.
Indeed, after a recent meeting involving Biden and presidential historians at the White House, historian Michael Beschloss gushed to Axios that FDR or LBJ may be the most apt analogy as to how Biden is “transforming the country in important ways in a short time.”
But Democratic strategists aren’t sure the rush for future history books makes political sense. “Democrats are like kids being given the keys to the candy store right now,” one Democratic strategist told The Hill newspaper. “We have all this candy, and we’ll worry about the stomach ache later.”
Another strategist confessed: “I’m struggling with what their end game is. They may be thinking, ‘We’re going to lose the midterms anyway.’”
Indeed, while Biden’s approval rating remains over 50 percent, there are signs he could soon be vulnerable on the economy. A new Fox News poll found that 18 percent of Democrats believe his spending is excessive. One in six Democrats see him as too liberal — 16 percent, up from 9 percent the last time Fox asked the question.
But the Biden White House believes that the public’s willingness to accept government intervention to fight the pandemic provides the perfect cover for the Biden Binge.
President Obama’s chief of staff, Rahm Emanuel, famously said in 2008, “You never want a serious crisis to go to waste. And what I mean by that, it’s an opportunity to do things that you think you could not do before.” Asked if he still felt that way after Biden’s victory, Emanuel said last year: “You have a 100-year pandemic, a 75-year economic depression, and a 50-year civil and racial unrest. It’s naturally an opportunity . . . to redo things.”
So the Biden budget will be one of the biggest political gambles in American history. The problem is that the budget chips being pushed into the middle of this poker game belong to the American people and their descendants. They have yet to fully realize it’s their economic future that is being gambled with.