“Drink coffee and do stupid things even faster” — Sign in a coffee shop.
Apropos the sign, an avalanche of stupidity is coming our way. Just 5 days away from his inauguration, President-elect Joe Biden has outlined the first part of his “American Recovery Plan”. It is virtually indistinguishable from the progressive wish list Nancy Pelosi has been going on about for the last 20 years or so. The only difference is that now progressives actually have a shot of getting what they have always wished for.
Consider just some of the proposals being put forward in the spectacularly misnamed American Recovery plan. To begin with, the price tag for this monstrosity is $1.9 trillion. That comes right after the $900 billion relief package Congress passed just last month. Not to mention the $2.2 trillion CARES act Congress passed in March of 2020. And this is only phase 1 of the Biden proposal. He promises more, fully backed by Bernie Sanders as the upcoming chair of the Senate Budget Committee.
If Congress approves the Biden phase 1 package it would amount to $5 trillion in additional spending thus far for Covid and Covid marketed relief efforts. That spending is over and above the normal appropriations for running the government, all passed in a 10 month period. And it’s all done with borrowed money.
So let’s look at some specific proposals. Among other things that have absolutely nothing to do with Covid, Biden plans to increase the minimum wage to $15 an hour. If enacted, this is guaranteed to make things worse for the people who are the supposed beneficiaries.
The unemployment rate is highest for people with low incomes and relatively little formal training. Plenty of these people work in the hospitality industry, specifically restaurants, which are among the hardest hit by the pandemic. Recent survey data suggest that about 110,000 restaurants, about 17% of the total, have closed their doors permanently because of Covid.
The Biden solution is to raise the cost of labor for an industry in free fall. Very clever. Not only that, the restaurants that survive will simply switch their compensation systems to a European style one in which customer costs associated with tipping are built into menu prices (service compris) and tips are eliminated. The effect will be lost jobs and reduced employee compensation for those who keep their jobs. Oh, and the survivors’ tax bills will rise because, let’s face it, virtually nobody reports all their tips to the IRS.
Other goodies in the package include checks for $1,400 to round it up to $2,000. Schumer and Pelosi have indicated that they are enthusiastically on board. What this is supposed to accomplish beyond the buying of votes is left unspecified. And of course, this is to be financed, by more borrowing, because we are assured “there is plenty of money available”.
Another $350 billion or so is slated for “emergency” relief for state and local government finances. Translated into English, this means that the states that manage their finances well will be required to bail out predominantly blue state public pension plans that are underfunded to the point where in some cases, like Illinois, they are approaching insolvency. And not to put too fine a point on it, the sorry state of pension finance has nothing whatsoever to do with Covid. Bailing them out will just put off the day of reckoning until it gets worse.
Another $170 billion will be forked out “so that schools can re-open”. But of course, the schools didn’t need to close and stay closed in the first place. This is just a gift to the politically powerful teachers unions who have argued for closing the schools and keeping them closed.
Private schools have opened independent of the state. And not just the elite ones. The K- 12 Catholic schools in Massachusetts opened successfully and have had almost no Covid infections. In other places, relatively affluent parents (like here in Fairfax County) have hired private tutors to run learning pods for groups of children.
Needless to say, the teachers unions have opposed these efforts while fighting to keep the schools shut down for in-person learning. This is in spite of the fact that already the data clearly show a catastrophic fall-off in the academic performance of disadvantaged children. Let’s face it, the public schools are run for the benefit of the staff, not the kids. That’s why the kids are being sacrificed.
As more details of the Biden plan seep out, it will become clear to all with eyes to see that the Biden trajectory is simply Obama redux on steroids (or perhaps coffee). It will be all about centralization, command and control. The crushing hand of the state will weigh in on every decision. Fantasies aside; there is nothing moderate about it.
JFB
