Creighton University Economics Professor Ernie Goss has released a disturbing report on President Biden’s “War on Work.” Professor Goss compares Biden’s spending to President Lyndon Johnson’s “War on Poverty” in 1964. We all know how successful Johnson was in eliminating poverty. Actually, he institutionalized poverty. There are exceptions, but too many are satisfied to live on marginal incomes if they can do so without working.
According to Goss, “President Biden, since his inauguration, has authorized $1.9 trillion in stimulus spending, and released his fiscal 2022 budget for $6.0 trillion in what could be termed as his ‘war on work.” Goss says, “In his 4 years in office, LBJ advanced federal spending by 14% per year, and expanded welfare outlays by roughly $800 billion per year. Biden has almost doubled that growth in his first budget year alone by boosting federal spending by 26% compared to pre-pandemic levels.”
I don’t believe this applies to Iowa but all the various benefits add up to outrageous amounts for some people according to Goss. “Biden’s 2020 so-called stimulus spending of $1.9 trillion added $300 per week in unemployment pay on top of regular jobless benefits, plus $1,400 per individual in stimulus checks, and $3,000 per child in financial assistance (all discouraging work). In a recently completed study, Mulligan, Antoni, and Moore concluded that in 19 states, a household of four with two unemployed workers can receive $100,000 in equivalent pay without working (Committee to Unleash Prosperity, White Paper #8).” Who is going to work with this as an alternative?
I know it is hard to grasp what all these big numbers mean. Goss compares LBJ’s War on Poverty to Biden’s proposed budget:
“And who pays for this fiscal indulgence? Between 1964 and 1968, LBJ funded his War on Poverty by raising the nation’s federal deficit as a percent of GDP from 1.0% to 1.5%. Biden, to fund what is termed here as his War on Work, has proposed raising deficit spending as a percent of GDP from pre-pandemic 4.8% to approximately 9.9%, the highest since World War II.
Furthermore, Biden’s Plan would also push the debt held by the public (not counting internal debt) to 111.8% of GDP eclipsing the level suffered in the wake of World War II.
Ultimately the nation’s youth will pay for this overspending via either higher inflation, advancing interest rates and soaring taxes, or a combination of all three.”
Ordinarily I do not quote so extensively from someone else’s work. However, it seemed to me that in this case, summarizing would not be much different that quoting. Hopefully, Biden will not be able to get this huge budget passed. However, even a compromise budget, with a large deficit, could result in inflation down the road. A large deficit could result in a temporary economic upturn, especially coming at a time when we are still recovering from the COVID-19, but the long-term consequences would not be good.
