Tag Archives: political economy

Progressive-Democrat Power Grab

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It turns out their Wuhan Virus “relief” bill, of which 9% actually contains money for dealing with the virus, has a blatant, deliberate attack on the federal structure of our nation. It’s an attempt to dictate to the States, individually and severally, that they’re not allowed to reduce their taxes [emphasis in the original].

The bill explicitly bars states from cutting taxes. States “shall not use the funds,” the bill says, “to either directly or indirectly offset a reduction in the net tax revenue” that results “from a change in law, regulation, or administrative interpretation during the covered period that reduces any tax (by providing for a reduction in a rate, a rebate, a deduction, a credit, or otherwise) or delays the imposition of any tax or tax increase.”

All of us need to remember this assault on our nation in the fall of 2021.

Imagine That

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Sometimes, a Federal stimulus isn’t necessary. Sometimes, a recovery is already in progress before Congress can get around to acting, even with the basely partisan Progressive-Democrat-controlled Congress and a Progressive-Democrat White House.

Like with the present “stimulus” bill, the American Rescue Plan Act of 2021.

See the figure just below.

Of the top 10 performing States by overall recovery and tax revenue increases for 2020 over 2021, seven are Republican run, and one—Vermont—is split, with a Republican Governor and a Progressive-Democrat Legislature.

Of all of the 24 States with increases, Ohio, Tennessee, Mississippi, South Carolina 12 are Republican-run, 2 are split with Republican Governors and Progressive-Democrat Legislatures, and 3 are split with Progressive-Democrat Governors and Republican Legislatures.

This is another demonstration that the Wuhan Virus “relief” bill—ARP—that the Progressive-Democrats rammed through Congress on strictly partisan lines is just another Blue State Bailout. Progressive-Democrats are masquerading their bill as necessary to bring our economy fully out of the downturn Federal and State governments created in their responses to the Wuhan Virus situation.

Never mind that the recovery is in full bloom already, and will stay that way until the Biden administration’s exploding regulation-writing and energy industry limitations start taking effect.

Social Safety Nets

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The nearly $2 trillion Wuhan Virus “relief” bill, the American Rescue Plan Act, wending its way through Congress on strictly party lines, is being masqueraded as a safety net for folks badly impacted by the Wuhan Virus situation.

Aside from the plain fact that no such bill is needed anymore—our economy is rapidly recovering, and would continue to do so were it not for the Biden administration’s burgeoning reregulation imperative, explosive spending plans, and its impending tax increases—there’s another aspect of this bill.

I’ve written elsewhere about the 91% of spending in this bill that has absolutely nothing to do with the virus. This is about the “safety net” spending. That spending includes items like these:

  • the largest direct stimulus payments ever provided in legislation at $1,400 per adult who filed tax returns with a Social Security number—which is nearly every working, or was working, person. It includes retirees, who lost no income due to the virus, and so they do not need virus stimulus/replacement money
  • expands the Earned Income Tax Credit and Child Tax Credit to the largest amount on record.
    • increases the Child Tax Credit amount to $3,000 per child and $3,600 for children under age six
    • increases the maximum Earned Income Tax Credit in 2021 from $543 to $1,502
  • continues the temporary weekly federal unemployment payments of $300 on top of state jobless benefits
  • recipients will get a tax waiver on $10,200 of unemployment payments. Heretofore, unemployment payments, as income replacement payments, were taxable as ordinary income
  • $86 billion bailout for union-managed multi-employer pension plans and single employer pension plans
  • $27.4 billion for rental and utility payment assistance
  • 15% benefit increase for food stamp recipients
  • reparations—direct payments, to the tune of 120% of outstanding indebtedness, for socially disadvantaged farmers and ranchers
  • “aid”—bailouts—for State and local governments—every bit as much handout to these political entities as are the above to individuals

All of these are handouts paid to folks who aren’t working and encourage, however weakly, those folks to continue not working and collecting the handouts. They’re not hands up paid to folks who are looking for work, are working temporarily reduced hours, and especially there are no criteria tying the payments to actively seeking work or increased work.

A legitimate social safety net would be a program that offers limited hands up to folks who’ve had a run of bad luck, or who have exercised bad judgment and learned their lesson, or who have misbehaved and mended their ways. Those hands up also would be tied to measurable efforts to find work or increased hours of work.

Giving handouts—especially broadly targeted or altogether untargeted handouts—making them repeatably renewable or outright permanent, and not keying them to working is no safety net. It’s

Why We Can’t Have Nice Things

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Here’s a partial list of what’s in the Progressive-Democrats’ Wuhan Virus “Relief” bill, just passed in the Senate and sent to the House for its concurrence.

A bill, incidentally, passed on strict party lines, after Senator Joe Manchin (D, WV) showed his word to be worthless after he swore up and down that he’d not support any bill that didn’t have support from “his Republican friends,” and then voted for its passage.

  • $350 billion for state and local governments—never minding that many States, such as California, Virginia, Arizona, and Colorado, had revenue increases over 2019
  • Over $128 billion for schools—never minding that 95% of that won’t be paid out until after 2021
  • $570 million—$280 per day(!), up to $21,000—for Federal employees to take up to 15 weeks off from work
  • $45 billion for Obamacare
  • $300 per week in enhanced unemployment, the first $10,200 would be tax-free to households with incomes under $150,000—even though unemployment benefits, as replacement income, heretofore was taxable as that income
  • $4 billion for agriculture, including $1 billion for, among other things, “socially disadvantaged” farmers getting their loans forgiven up to 120% of their loan. Never minding the intrinsically racist and sexist nature of that, since non-disadvantaged farmers don’t get a penny of loan forgiveness, at all, and that the 20% excess “forgiveness” is naked “reparation”
  • $50 million in “environmental justice” grants
  • $91 million in “outreach to student loan borrowers
  • $270 million for the National Endowments of the Arts and Humanities
  • $200 million for the Institute of Museum and Library Services
  • $10 million for the “preservation and maintenance of Native American languages”

The sad thing—or would be sad were it not for its dishonesty—is that some of these inclusions would be worthy of straightforward debate on their merits, did the Progressive-Democrats have the integrity to propose them separately and on those inclusions’ merits.

That partial list, by itself, works out to $1 trillion of money wholly irrelevant to (unneeded, with a recovering economy) Wuhan Virus “relief,” money that would be better spent on Biden’s—and Trump’s—vaunted infrastructure repair and buildout.

Or on making permanent the personal income tax rate reductions from the Trump tax reform.

Or in addition to the miserly $1,400 “stimulus” payments, make it $3,000 in our pocket direct payment checks.

We need to remember this in 2022.

Yes, It Is

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But for reasons different from Congresswoman Alexandria Ocasio-Cortez‘ (D, NY). Or it would be, if Ocasio-Cortez hadn’t slept through so many of her economics classes.

[Congresswoman] Alexandria Ocasio-Cortez [D, NY] called the debate over raising the minimum wage to $15 per hour “utterly embarrassing” and reiterated her push for the Biden administration to override the Senate parliamentarian and include a pay floor increase in the Democrats’ coronavirus relief package.

It is embarrassing that a Boston University cum laude BA in economics could have so little understanding of basic economics. It is embarrassing, too, that so many grown adults alongside her in Congress could have so little understanding of basic economics.

It is well-known that the more something costs, the less of it that will be bought or otherwise acquired—or even sought after. Of course, that applies to labor as well as to the goods and services that labor produces.

It is well-known that if the output of labor isn’t worth the cost, the laborer won’t be hired in the first place.

It is well-known that minimum wage jobs—the jobs allegedly targeted by the Progressive-Democrats’ drive for $15/hr—are low/no skill jobs.

It is well-known that the primary workers in those low-no skill jobs are teenagers trying to earn some summer money for a number of reasons, earning some college money; existing college students looking to earn money for their current expenses; first-time workers looking to gain work experience and resume material; single parents looking to plus up their family’s income; two-parent families with one or both parents looking to plus up their family’s savings. Very few of these minimum wage jobs are the sole job held by the worker.

From that, it should be easy to understand that the ones who will be hurt the most by a mandated minimum wage increase will be precisely those folks, as they’re the ones who will be priced out of their jobs, and the small businesses who can’t afford to pay that much in wages.

It’s also lost on the Progressive-Democrats, or they simply don’t care, that the ones most hurt by such a move are minority low-skill workers and the minority-owned or -operated small businesses that can’t afford the labor cost.

We even have empirical evidence of the failure of such a minimum wage: in Seattle, where employment has fallen off in the aftermath of that city’s mandated wage increase.

Yet the Progressive-Democrats push on, with their eyes wide shut.