Biden’s bid to remake America
If Joe Biden’s American Jobs Program is enacted, the federal government will take a great leap toward irreversible control of the destiny of the Republic.
To finance this leap, U.S. corporations are to be forced to turn over to the government a far larger slice of their earnings. The corporate tax rate is to be raised from 21 to 28 percent. And that is only the first of the new or added taxes to come — on incomes, capital gains and estates.
The bait to lure Republicans into embracing this $2.3 trillion in spending is the modest fraction to be allocated to infrastructure. The rest is to be used to grow social programs and launch new ones. Biden plans to lead the nation into a new endless war on climate change.
He is determined to emulate FDR and LBJ, and to be remembered as a president who raised federal power to new heights. The significance of what Biden has already done, with his $1.9 trillion American Rescue Plan, cannot be denied. Before the COVID-19 pandemic hit in March 2020, the U.S. was looking at yearly trillion-dollar deficits. Then, in that final year of the Trump presidency, came a massive surge in federal spending of some $4 trillion. The final 2020 deficit exceeded $3 trillion. and the U.S. debt exceeds the gross domestic product for the first time since World War II. The riptide of new spending is coming in stronger and stronger. Why? The reasons are many.
First, fear of the social, economic and political consequences of a recession is far greater in Congress and the country than the fear of an outbreak of inflation.
Second, the drivers of deficit spending are growing bolder as the traditional resistance grows weaker. Inside the Republican Party, the deficit hawks are going the way of the passenger pigeon — toward extinction. Then there are the other driving forces of larger deficits. Social Security, Medicare and Medicaid are all programmed for growth. Nor did Donald Trump extract us from the draining wars of the Middle East. Also, for a decade, the Federal Reserve has held interest rates down and inflation has not been the threat it was at the end of the 1970s when Chairman Paul Volcker brutally squeezed it out of the economy. The only way interest rates can go now is up, and with the federal debt as huge as it is today, interest rates do not need to rise too far to consume a large chunk of the federal budget.
Over the last century, it has been the fate of the Republican Party to retreat, regroup, resist and retreat again on this macroissue of deficits and debt.
When the Depression and war ended, Eisenhower Republicans made no effort to repeal FDR’s New Deal. When Barry Goldwater was nominated in 1964 and went down to crushing defeat, LBJ, who cut his teeth in the New Deal, used his massive majorities on the Hill to launch his Great Society, programming new spending far into the future.
The financial crisis of 2008 and 2009 brought us our first trillion-dollar deficit. While Trump unleashed the private sector with his tax cuts the pandemic and the economic crisis it engendered brought about a bipartisan clamor for government to resolve the crises.
There appears to be no historical evidence that once a Western democracy expands central power and control of the nation’s resources that it ever willingly gives up those gains.
Pat Buchanan is a nationally syndicated author.