It seems that both Gov. Roy Cooper and President Joe Biden think the money printer can go “Brrr” anytime they’re feeling generous with taxpayer money. But it’s not just Cooper and Biden. With each passing year, whether under Democratic or Republican leadership at the federal level, fiscal conservatives have had little to comfort ourselves with, as the knowledge that the federal debt continues to grow exponentially. There’s an exception to this silly rule, though. The fiscal conservatism of our state legislature over the past decade. Kudos to our lawmakers who have been much more responsible with taxpayer dollars than their predecessors.
But back to Cooper and Biden. Both of them have recently issued reckless spending proposals. John Locke Foundation’s take on Cooper’s budget can be found here. Neither Cooper nor Biden seem particularly interested in economic principles that are necessary for good governance, unless one considers demand side economics a winning tactic (Spoiler: it’s not).
Let’s take a quick gander at Biden’s whopper of an infrastructure plan. At the tune of $2.3 trillion, it’s a doozy.
The federal government only “owns” 5% of the nation’s infrastructure, yet exerts substantial control over the remaining 95% by way of regulations and taxes, according to Chris Edwards at the Cato Institute. The foolhardiness of several of the spending focuses listed above warrant their own article, but let’s briefly survey two of these spending proposals, just for fun.
Electric vehicles. Biden wants folks to buy ’em and he’s even willing to give purchasers some of your tax dollars to make that decision more attractive to the tune of $174 billion. Gas prices are climbing and one wonders if looming regulations from the Biden administration will exacerbate those prices further. However, electric vehicles are known to have negative environmental and social impacts and all-electric vehicles are not more efficient, when weighed against other factors, than gasoline vehicles. But, darn it, we’re going to subsidize them with $174 billion!
Manufacturing. In American industry is there a sacred cow more sacred than manufacturing? $300 billion of Biden’s infrastructure plan would go to this. One-sixth of this money is earmarked for semiconductor chip manufacturing, which is certainly something we’ve seen a shortage of due to a confluence of factors, not the least of which are geopolitical skirmishes between the U.S. and China.
Yet beyond the semiconductor conundrum, economic protectionists on both sides of the aisle regularly repeat the refrain that we need to bring manufacturing back to the U.S., all the while ignoring the fact that our manufacturing output has risen over the decades. They levy their tariffs with abandon and scold companies and consumers for accessing goods at lower prices in foreign markets as if it is a patriotic duty to pay more just so it can say “Made in America” on the bottom of the box. An excessive focus on manufacturing during a time when our economy continues to dematerialize, isn’t forward thinking and might be something we come to regret. Policymaker beware (and be aware).
There’s much more to unpack in both Biden’s infrastructure plan and Cooper’s economically-illiterate budget but the biggest question for taxpayers should be, “How are we going to pay for this?” The short and sad answer is: Higher taxes.
Anytime government wants to grow, it must do so at the expense of taxpayers, whether directly or indirectly.