The Democrats are back in the spending driving seat and they are about to accelerate the speed of the money printing press.
The Democrats are likely to pass a new $1.9 trillion stimulus bill, over $312 billion of which is dedicated to policies that have absolutely nothing to do with the pandemic.
It is one thing to send out stimulus checks and support small businesses, but why do teachers and schools need to be funded as well as state and local governments?
It is pathetic how beholden the Democrats are to the teachers’ unions.
Teachers won’t even go to work, but they will still get billions in funding if the Democrats get their way.
State and local governments that have racked up massive debt should not be bailed out by taxpayers in other states that have managed their finances properly.
These aren’t the only spending provisions being proposed in the pork laden $1.9 trillion bill…not even close.
Here is a list of spending proposals as reported by Breitbart:
- $110 billion expansion of the Child Tax Credit. The bill would increase the tax credit from $2,000 to $3,000 and make it fully refundable for one year.
- $23 billion expansion of the Earned Income tax Credit to childless adults for one year. The proposal would expand the tax credit, including those aged 19-24 years old and over 65 years old.
- $8 billion expansion of the Child Care and Dependent Care Tax Credit to $4,000, or $8,000 for two or more children, for one year.
- A $58 billion provision giving grants to multi-employer pension plans and changes single-employer pension funding rules.
- A $54 billion provision expanding the federal minimum wage to $15 per hour by 2025.
- A $34 billion expansion of Affordable Care Act (ACA) subsidies to reduce the maximum cost of insurance plans.
- A $16 billion increase of the base Medicaid match rates to states that recently expanded Medicaid under the ACA.
- A $9 billion provision allowing states to expand Medicaid coverage for prisoners close to release and for pregnant and postpartum women for five years.
Where is this money coming from?
That is a rhetorical question of course.
The Federal Government is spending money we don’t have.
The national debt spiked to $27 trillion, up from $22 trillion at the start of last year. Who is buying government debt? Answer: The Federal Reserve.
That’s right, the Fed is “monetizing the debt” by buying Treasury Bonds. Try and wrap your mind around that for a moment.
By buying government debt from private investors, the Fed makes the remaining bonds more valuable. These higher-value Treasuries don’t have to pay as much in interest to get buyers.
The lower yield drives down interest rates on the US debt. Lower interest rates mean the government doesn’t have to spend as much to pay off its loans. That’s money it can use for other programs.
In his testimony to Congress, Boston University economist Laurence J. Kotlikoff said, “America is broke today…indeed, it may well be in worse fiscal shape than any developed country, including Greece.”
By his projections, the Federal Government has $215 Trillion of unfunded liabilities. Most of these liabilities are driven by Social Security, Medicare, and Medicaid. These programs account for 60% of the yearly federal budget. The costs of these programs will continue to rise as more and more Baby Boomers retire.
But who cares about future generations? The current crop of politicians will be long gone by the time America becomes insolvent.
If history has taught us anything, it’s that you can’t print your way out of financial catastrophe. The printing press is the cause of economic Armageddon, never the cure.
The laws of economics don’t change, and they never will.