Biden’s Fiscal Dementia

It’s always an intellectually sizzling moment when President Biden goes out there and starts speaking about the economy and his economic policy. Today, he spoke at a Martin Luther King Jr. event sponsored by that well-known even-handed centrist, the Reverend Al Sharpton. While virtually everyone cherishes King’s phrase, “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character,” Mr. Biden didn’t bother with that unifying theme. Instead, he called Republicans “fiscally demented.” How’s that for a unifying theme to welcome a new GOP Congress? Not good. Of course, Mr. Biden bragged that the deficit came down $350 billion in 2021 and a trillion dollars in 2022, but he neglected to mention that almost every nickel of that came from ending various Covid emergency spending programs. Not ending all of them, because he’s still giving away student loan cancellations, which will cost $600 billion over the next 10 years according to several estimates, but he forgot to mention that. He also forgot to mention that his spending agenda in the past two years has come to roughly $6 trillion. So much for his fiscal dementia claim. Now, unfortunately some Senate Republicans helped Mr. Biden by voting for $3 trillion of that incredible spending, including the recent omnibus bill. Also, Mr. Biden got roughly $3 trillion in spending on his own, without anybody’s help. The point is, he hasn’t done anything to reduce spending or cap spending or restrain spending. Not one droplet of fiscal restraint on his part. And hopefully the era of Republican Senate compliance with Mr. Biden’s big-government socialism has come to an end with the GOP House. As usual, Mr. Biden tries to take credit for creating new jobs — except the problem there is that he hasn’t created any new jobs; it’s just that jobs lost during the Covid pandemic have returned. That’s a good thing, but it’s way below the trend line, which would’ve probably added 5 million to 7 million actual new jobs from the pre-Covid Trump baseline trend. Mr. Biden is proudly bragging about his 15 percent minimum corporate tax, which will damage growth and is a phony concept to begin with, since companies are using legal tax credits, or expensing provisions legislated into law by Congress. Mr. Biden also mocks the GOP House IRS vote to stop another $80 billion for 87,000 IRS agents, a bill that Biden says would help the wealthiest. Actually, congressional analysis by CBO and Joint Tax strongly suggest middle- and lower-income people will pay the bulk of these new IRS audits, beginning with the $600 audits, which is surely a middle-class issue. Then Mr. Biden rails on about trickle-down economics as he always does and blames what he calls the $2 trillion Trump tax cut for helping rich people. Actually, study after study on the left and the right have shown the biggest winners from the Trump tax cuts were middle- and lower-income people, minority groups, with a falling poverty rate. The most recent CBO numbers on taxes shows that what was supposed to be a $1.5 trillion revenue loss from the Trump tax cuts actually turns out to be an almost $1.5 trillion revenue increase — roughly 40 percent in just five years. So perhaps Mr. Biden has a bit of fiscal dementia himself. Meanwhile, Speaker McCarthy made it absolutely clear this weekend that the GOP wants new spending caps and budget cuts in their debt negotiations. Also, a former chairman of the Council of Economic advisers during the Trump administration, Kevin Hassett, has a great idea: Mr. McCarthy should offer Democrats $3 in spending cuts for every $1 added to the debt ceiling. Now that’s what I call fiscal intelligence. From Mr. Kudlow’s broadcast on Fox Business News.

Biden’s Fiscal Dementia

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