'Just Stop & Do No Harm': Why Biden's $3.5 Trillion Bill Will Hurt US Economy for Generations
18:51 GMT 17.10.2021 (Updated: 12:13 GMT 21.10.2021)
Joe Biden's $3.5 trillion social spending package is exactly the wrong thing that one could do for the prosperity of the United States, warned Arthur Betz Laffer, a member of Ronald Reagan's Economic Policy Advisory Board from 1981 to 1989, during the programme "Spending Gimmick: The True Cost of Biden's Agenda".
The Reagan administration's economic guru Arthur Laffer joined Just the News founder John Solomon's virtual discussion
of the US president's multi-trillion spending initiative with GOP lawmakers including Rep. Chip Roy and other conservative thought leaders on Thursday evening. According to the economist, Joe Biden's bill "is a catastrophe and will hurt the economy for generations to come".
"I don't understand why any Dems would vote for this bill", Laffer told the award-winning investigative reporter. "It's bad for Democrats. It's bad for the poor. It's bad for minorities, the undereducated, the disenfranchised. It's a bad bill for everyone in this country".
The Democrats are seeking to ram the 2,465-page bill through the US Congress via the reconciliation mechanism as the GOP resolutely opposes the legislation, which they see as a waste of money and a danger to the country's economic growth.
Meanwhile, maverick Democratic Senators Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have thrown some sand into Biden's gears, urging their party fellows to slash the bill's price tag at least in half. The two lawmakers also insist that the House should pass the Senate's $1.2 trillion infrastructure legislation first, something that progressives vehemently oppose
. Under these circumstances, "Democratic leaders' goal of passing both bills by their self-imposed October 31 deadline seems doubtful at best", admitted
4 September 2021, 14:00 GMT
that the much discussed $3.5 trillion package will cost a lot more than it's purported to, especially with the "unfunded liabilities of government programmes". What makes matters worse, the current size of the federal deficit and debt-to-GDP ratio are "unprecedented in peacetime in the United States' history", according to the economist. "It puts us in third-world country status", he highlighted.
The US' national debt is nearing a whopping $30 trillion, while the country's inflation is up 5.4% from a year ago, matching a 13-year high, according to the Labour Department.
The Dems' economic models are flawed, argued the economist. He recalled that they used to lash out at Trump's tax cuts legislation, which in fact started to pay for itself after being implemented.
While the Democratic Party is now claiming that its tax increases for the rich would pay for the bill and reduce the deficit, the opposite would happen, Laffer warned: "They will increase the deficit quite substantially, especially those taxes on high-incomers and corporates".
According to the economist, Biden's spending bill is nothing but "giveaways and redistribution". To illustrate his point, Laffer explained that "redistribution occurs when you take from someone who has a little bit more, and you give to someone who has a little bit less".
"By taking from someone who has a little bit more, you reduce that person's incentives to produce, and that person will produce a little bit less", the economist said. "By giving to someone who has a little bit less, you provide that person with an alternative source of income other than working, and that person, too, will produce a little bit less. The theorem here — and it's math, it's not left-wing, right-wing, Republican, Democrat, liberal or conservative — it's a theorem, it's math. Whenever you redistribute income, you always reduce total income, period".
Given all of the above, the economics of the reconciliation bill are "exactly the wrong thing you want for a prosperous future of this country", the former Reagan adviser underscored, agreeing that the US has not had a healthy economy for the last 20-25 years.
When asked what piece of advice he would give to the incumbent president, Laffer responded, addressing Joe Biden: "Just stop and undo what you've done already. That's all. Just don't pass this bill and undo all the stuff you've done, I mean, the Trump bill was working beautifully. Stop! First of all do no harm", the economist said, adding that the US now has the worst administration he has ever seen in American history.
15 October 2021, 17:23 GMT
Meanwhile, the GOP allowed the Dems to raise the debt ceiling by $480 billion, which, however, is not enough for Biden to push ahead with his milestone spending package. America's two major parties are expected to cross swords over the debt limit again in December 2021, with the Dems pinning their hopes on another "retreat" by McConnell.
Still, some conservative observers suggest that the Republican political dinosaur will not cave in
, leaving his political opponents to pass the debt limit suspension on their own and taking full responsibility for their mammoth spending spree.