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Good oped: "Biden White House has made 4 big economic mistakes in just 4 months"
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Original Message
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In just four months, the Biden economic wizards have made several major economic mistakes, some of which were contained in the American Rescue Plan (ARP).
First, there’s that pesky $300 per week supplemental unemployment insurance that is most definitely making it harder for small businesses to hire back staff and limiting job growth. That the Biden team insisted on including an extension of those payments in the ARP was an early indication that they are ignorant of how real-life businesses function.
Next up is the ARP itself, and subsequent proposals to spend another $4 trillion. The White House’s $1.9 trillion stimulus bill that passed in March was too big and too inflationary; talk of trillions more on the way alarmed the public even as prices on everything from soft drinks to diapers began to rise.
Growth during the first quarter, when the bill was crafted, approached 6.5 percent; after-tax personal income rose 13 percent. Spending was primed to soar; last year consumer net worth rose 10 percent, to $130 trillion, thanks to rising stock and home prices, and Americans held an estimated $2 trillion of excess savings.
Though there were still millions of people unemployed, it was clear that thanks to vaccines, businesses reopening and past giant stimulus bills, the economy would boom, and job creation would follow. Dropping $1.9 trillion of extra stimulus into the mix was excessive and has contributed to surging inflation, which is even now souring consumer optimism and possibly dulling the vibrant snap-back.
The third major economic goof of Biden’s first four months in office – also related to the ARP – was highlighted recently in Krugman’s own paper with the headline: “New Worry Over State Revenues: They’re Soaring.”
Rising state incomes should not be a negative, unless you’ve just sent an unnecessary $350 billion in taxpayer dollars to those swollen state coffers, which is what Biden and his trusty experts did in the ARP.
[link to thehill.com (secure)]
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