The Democrats cynically call the new kill the economy bill “The Inflation Reduction Bill.” The more accurate name should be” The Deficit. Inflation/Unemployment Bill”
“At a time when the economy is sinking, the Democrats want to extract $313 billion out of private sector.
Worse yet, they want to sick the IRS on Americans and take an additional $124 billion out of the private sector.
By the economic law of demand, those higher taxes would put even more downward pressure on the U.S. economy.
That’s not the only damage the Democrats want to do to the economy.
They also want to spend an additional $400-plus billion dollars — all of which would be deficit spending and which requires the printing of more money.”
Oh, the so called deficit reduction does not start till 2027!! What could go wrong with that? More inflation, fewer jobs, more businesses moving out of the United States.
Count on Dems’ Tax and Spend to Aggravate Biden Stagflation
By Tom Del Beccaro, Newsmax, 8/1/22
The economy, despite the Democrats’ word games, is in a recession in addition to suffering from high inflation. The reason why the economy is so troubled is the unsustainable growth in government spending and its associated printing of money.
The Democrats’ tax and spend bill will only make things worse.
The cause of inflation is not that hard to understand.
According to Milton Friedman (in 1963), “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
Starting with the COVID-19 pandemic lockdowns in March of 2020, the U.S. governments forcibly and dramatically decreased economic output.
The United States’ economy shrank 3.4% in 2020. Even though government has “allowed” the economy to reopen, overall unemployment employment remains lower today than before COVID.
Now, we are facing a recession. As a result, economic output is falling once again.
As for government spending, the TradingEconomics.com chart below says it all:
U.S. government spending was an outrageous and very damaging 44% of the economy.
Incredibly, total government spending at all levels of government, for 2020 and then again in 2021, reached $10 trillion.
As you can imagine, the additional federal spending was all deficit spending.
Indeed, in 2020, the Federal deficit set an all-time record of $3.13 trillion.
It remained an incredibly high $2.77 trillion in 2021. Of course, those exploding deficits were “financed” by the printing of money by the federal government.
That is why America is suffering from such inflation.
The excessive printing of money matched by weak to falling output.
Yes, global events and the lack of a resolution of the supply chain problem exacerbates our economic problems, but the base cause of inflation remains American unsustainable government spending and policies that are causing the economy to contract.
What could be a worse combination than that?
The new tax and spending bill emanating from the Democrats.
Democrats want to raise taxes on American business as part of that package.
At a time when the economy is sinking, the Democrats want to extract $313 billion out of private sector.
Worse yet, they want to sick the IRS on Americans and take an additional $124 billion out of the private sector.
By the economic law of demand, those higher taxes would put even more downward pressure on the U.S. economy.
That’s not the only damage the Democrats want to do to the economy.
They also want to spend an additional $400-plus billion dollars — all of which would be deficit spending and which requires the printing of more money.
In plain terms, the Democrats’ prescription for what ails the American economy, recession and inflation, is more of the very policies that caused the recession and historically high inflation.
Americans need to realize: that since 1950, average economic growth in this country has reduced from an average of 4% a year to 2%.
In that time, government spending has increased dramatically along with the national debt.
Unless and until government officials and voters understand that government spending should be under 25% of the economy, we can expect years of weak economic growth and inflationary pressures.
The Democrats bill would only make things worse.Tom Del Beccaro is an acclaimed author, speaker and national columnist as well as a radio and television commentator. Tom is the Chairman of carevival.com. Read Tom Del Beccaro’s Reports — More Here
