President Joe Biden has kicked off his administration by confidently calling for another four years of wasteful and harmful spending. Unfortunately, the Biden-Harris administration’s fiscal agenda will slow the American people’s economic growth at home, and undermine America’s ability to support its allies and challenge its competitors abroad.
Biden’s proposed infrastructure bill, the “American Jobs Act,” offers a worthwhile starting point. For decades, Democrats and Republicans alike have turned to infrastructure spending as a way to demonstrate their willingness to “reach across the aisle” and “get things done.” After all, the public largely supports fixing roads and bridges, and there seems to be no political or cultural agenda attached to such bills.
Or so one would think. First of all, Americans are increasingly skeptical of big infrastructure spending boondoggles. In 2018, 64% of the population supported President Donald Trump’s $1 trillion dollar infrastructure plan – an impressive level of consensus given the anti-Trump hysteria on the Left at the time. But a CNBC nationwide survey from early in April 2021 showed that only 36% of respondents backed Biden’s $2.25 trillion proposal. The same respondents supported measures like fixing roads and expanding broadband internet by large margins, so it would seem that something else is raising people’s suspicions about the plan.
We will never be able to take on hostile foreign nations if our own government remains hostile to the principles of responsible spending and governance.
As it turns out, Americans are absolutely right to be skeptical about what the Biden-Harris administration plans to do with that $2.25 trillion – because actual improvements to transportation, utilities, and communication make up less than half of the proposed spending.
An analysis of the bill by Politico, which relied on a generous definition of “infrastructure,” showed that only around $930 billion of the bill’s proposed spending would go toward roads, bridges, broadband, and similarly tangible projects. (Interestingly, that’s pretty close to the price tag of Trump’s $1 trillion plan.) Politico describes the Biden administration’s efforts to classify the remaining $1.3 trillion in the bill as “infrastructure” as either “stretching things,” “very distant,” or “not even close” to the truth. Sen. Kirsten Gillibrand, D-N.Y., may believe that anything can be infrastructure, but a $10 billion “civilian climate corps” and $20 billion in grants to inept city governments and far-Left nonprofits under the guise of “racial equality and environmental justice” are not infrastructure by any meaningful definition of the term.
But the Biden administration is not just spending more than $2 trillion on a grab bag of big government plans and progressive politicians’ wish lists. The president is requesting a $753 billion budget for the Department of Defense in the next fiscal year – even more than this year’s $740 billion. Like the “infrastructure” plan, though, this proposal stretches the definition of defense to include green energy and climate initiatives.
The pandemic stimulus package from earlier this year was also filled with wasteful, even harmful spending: $129 billion went to public schools, with no condition that they reopen their doors. Another $750 million went to overseas health programs, and more than $1 billion went to a “racial justice in farming” initiative that included an “equity commission” – presumably to ensure that an explicitly race-based program did not accidentally help the wrong people. All the while, our national debt has soared past $28 trillion.
The Biden-Harris’ administration’s utterly misplaced budget and policy priorities are an excellent way to weaken the international community’s confidence in America – and the status of the U.S. dollar as the world’s reserve currency. What incentives will any nation have to cooperate with a country that seems hellbent on digging itself deeper into debt in order to pursue a frivolous, self-sabotaging agenda?
Worse, our irresponsible spending makes it easier for our rivals to undermine us. The United States owes at least $1.1 trillion to China, a country that has been engaging in dishonest practices for years – including economic (as well as governmental) espionage and the theft of intellectual property – in order to maintain its export advantage. Now, China is taking the lead on developing a digital currency that has the potential to displace the dollar as the world’s reserve currency.
Cryptocurrencies such as Bitcoin and Ethereum have great potential as means of payment that transcend national borders. They offer increased confidentiality and remain immune to inept or malicious monetary policy inflicted by governments.
But while China’s digital yuan may be a tempting choice for nations facing sanctions from the United States, it is also likely to give the Chinese regime greater control over world affairs. Privacy and decentralization are supposed to be the main advantages of any digital currency. One that is controlled by an authoritarian state hostile to the West would offer none of these benefits.
It is not clear how America can stop China from implementing a digital yuan. China’s ascension as a global economic powerbroker will not be reversed anytime soon. But the U.S. government can certainly take steps to strengthen the dollar as much as possible and cement its legitimacy with the international community. At the very least, this would mean only spending money on our needs. Infrastructure funds should go toward roads and bridges, and defense spending should go toward providing for our national security instead of waging wars of choice abroad and political purges of the armed services at home.
To truly get America back on track, though, significant cuts are needed across the board – an approach the Biden administration is unlikely to consider. Conservatives need to get serious about opposing every bit of wasteful and unconstitutional spending in the next four years, even when it is not politically expedient to do so. And they need to keep opposing that spending after the next Republican administration takes power.
If most of Biden’s spending bills become law, the American people will take a hit. Democrats will find innovative ways to separate people from their money. That includes a proposed capital gains tax hike that seems to be aimed squarely at middle-class Americans who increased their investments during the pandemic, as well as a proposed mileage tax (now on hold) which would target drivers. The latter would have a particularly harsh impact on rural Americans.
Despite these tax increases, the United States will have to borrow more money to finance both parties’ government-expanding agendas, often loaned to us by China. Alternately, the government can simply print more money as it did at the height of the pandemic and hope that inflation rates won’t soar.
This is not how serious countries maintain their financial health, much less how superpowers maintain their influence. This is how declining world powers cede ground to more pragmatic and determined competitors – and leave other nations with no choice but to accept the growing power of a ruthless authoritarian state like China. Being more than $28 trillion in debt is a serious challenge. So is malicious behavior by China. We will never be able to take on hostile foreign nations if our own government remains hostile to the principles of responsible spending and governance.