Any amateur magician knows palming a card or coin involves secretly taking something while distracting watchers. Biden’s big spending is that same trick, writ large.
Massive (unnecessary) federal spending on COVID, unemployment, anything-goes-infrastructure – games the system. Democrats promise money while taking more money – from the middle class. Here is how.
Putting aside whether spending is wanted, the question “how will you pay for it?” gets a slick answer: “Cut waste, tax the rich.” Convenient – but duplicitous. Nothing on the public record suggests Democrats – or many Republicans – have ever enduringly “cut waste.”
Why? Because finding federal waste, as bureaucrats strive to hide it, is tough. Once found, getting a program to end rather than show up under another shell is just as tough. As Ronald Reagan quipped, “federal grants are like rabbits, they multiply like crazy, and when they’re out, you can’t catch them.” See, e.g., Address Before a Joint Session of the Indiana State Legislature in Indianapolis.
“Tax the rich” is no less duplicitous. It sells as class warfare, if you favor that, which most do not. But it is another foil. Confiscating private wealth above the median falls way short. One analysis noted taxing wealthy Americans and corporations could generate $9.3 trillion, but “more realistically, $3.9 trillion.” Democrats have already spent that money.
“Even annually seizing 100 percent of all income earned over the one-million-dollar threshold could not generate more than $8.9 trillion.” How do you think that move affects the following year, job creation, productivity, investment, and production? Think it might go down? See, e.g., Issues 2020: Taxing the “Rich” Won’t Pay for Politicians’ Promises.
America’s tax base is, in the end, our hard-working middle class. Biden’s secret is that – when vote-buying and “infrastructure” spending are over – a massive burden falls on the middle class.
How can this be? The answer is simple. Inflation is the natural outgrowth of excess federal spending. As the government spends nonexistent money, the dollar’s value falls – that is, purchasing power in our pockets falls. The government prints money which chases less wealth.
This means we all pay more for less, a hidden tax on what we consume and invest. Plus, we earn less (since the dollar is worthless) for work done, which generating higher relative taxes on that work. But inflation is not the only “tax” that hits the middle class when we overspend.
We also pay with higher real prices for goods produced by corporations facing higher taxes since they pass the cost of taxes along. We pay with reduced job prospects, as companies cut employment and slow hiring, to compensate for having to shell out for higher taxes.
To slow inflation, the federal reserve raises interest rates, which raises the cost of borrowing – for companies and individuals. Whatever inflation does, the real economy slows as investment slows in response to higher costs of borrowing. That means another drag on employment.
As individuals, if we are borrowers with variable interest rate loans, mortgage, or credit card debt, we will pay increased interest – as the Fed raises rates to slow inflation. That is another tax.
To all this, add another Biden-driver of inflation. Beyond excess federal spending, Biden-Harris has shocked energy markets, ending US energy independence, shutting down efficient fossil fuel sources, shrinking supply which raises prices while increasing dependence on foreign sources. Who pays for that? The middle class.
Other sources of economic instability, which eventually fall on the middle class, include unforeseen implications of wider regulation of domestic companies, national security mismanagement – which triggers trade friction and emergency response.
To that, add higher crime, triggered by reduced support for law enforcement, border security, indulging lawlessness.
The cost of Biden’s crime spike for America’s middle class is just beginning but includes increased risks to businesses and families, elevated concerns over personal and property safety, a national exodus from major cities, more gun buying, and less confidence in the future.
Net-net, the rich will remain insulated from most social pressures, the poor increasingly dependent on endless federal largess, particularly as businesses struggle to hire from those paid to be unemployed, and the bulk of new spending, inflation, taxes, and insecurity – will fall on the middle class.
That fact – Biden’s sleight-of-hand – is not discussed, as it undercuts the narrative. The truth is Biden’s class warfare will not impair the rich or save the poor; it will hit the middle class.
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