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Hendrickson's View

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Hendrickson’s View

Mark W. Hendrickson

Mark Hendrickson is an economist who recently retired from the faculty of Grove City College, where he remains a Fellow for Economic & Social Policy for the college’s Institute for Faith and Freedom. These articles are from The Epoch Times and The Institute for Faith and Freedom, an online publication of Grove City College, in Grove City, Pennsylvania.

The Big Green Lie

Public discourse about climate change often degenerates into personal attacks. Those of us who point out the many holes in the allegedly “scientific basis” of global warming alarmism are denounced as “deniers.” As I wrote in my article, “Who Are the Ideologues,” the heart of alarmism is a radical political agenda — namely, for a socialistic, top-down plan that would restructure our energy usage, and therefore our economy, in the name of saving the planet from a climate catastrophe.

The climate change “emperor,” of course, has no clothes. You can read some of my rebuttals to the alarmists in my article, “Who Stole Greta’s Childhood,” but the sound bite version is that, yes, the world has gotten a degree or two warmer than in “preindustrial times” (for which we should be thankful, since before the Industrial Revolution, the Earth was sunk in the Little Ice Age — the coldest period of the last 10,000 years); yes, CO2 traps heat (although on a logarithmic scale, not a linear one, which means that future increases in CO2 will trap less heat); and it is essential to realize that CO2 isn’t the most important “greenhouse gas” (that would be water vapor), and there are multiple other factors that influence the heat content of Earth’s atmosphere — everything from solar and volcanic activity, to ocean currents, tectonic movements, cloud cover, etc.

In fact, in late 2009, when President Obama and congressional progressives were trying to pass a cap-and-trade bill designed to make Americans pay extra for the privilege of burning fossil fuels, some of the scientists in the global warming alarmist camp were backing off their claims of runaway warming. Looking at the most recent data available to them, they guessed (yes, “guessed” — all that we — even the so-called “experts” — can ever do is guess the future) that the earth was likely to cool for the next few decades. Think about that for a second: After years of telling us that the more CO2 there is in the atmosphere, the hotter Earth will get, they reversed themselves, saying, “CO2 will continue to increase, but the temperature is likely to fall.” The alarmists thereby demolished their own case by conceding the main point made by so-called skeptics: that many other factors besides CO2 drive changes in global temperatures.

The big green lie — specifically, that human activity is warming the globe to a dangerous degree requiring a radical economic, social, and political transformation — has many iterations. Although my invocation of “the big lie” phraseology may be harsh, it is bluntly and plainly accurate. Just as Hitler’s propaganda team (and indeed, all left-wing-totalitarian groups, whether Communist, fascist, or socialist) employed and continue to employ “the big lie” technique of incessantly repeating a falsehood until all but the most alert citizens are mesmerized into believing it from the sheer volume of repetition, so it is with today’s greens.

I am by no means likening alarmists to the murderous and maniacal Hitler. Indeed, the average government employee repeating the mantra of “anthropogenic climate change” today is a government bureaucrat or government-funded scientist dutifully — not maliciously — reciting the official party line. By the way, if you want to understand how politicians can exploit scientists and twist scientific research into “official science” — the best “science” that money can buy — get a copy of Michael Hart’s book, Hubris: The Troubling Science, Economics, and Politics of Climate Change.

And, if I may digress for a moment, the next time you hear someone cast suspicion on the integrity of a private-sector scientist who dissents from climate change alarmism, ask yourself why nobody ever asks scientists on the alarmist side if they or their university have ever received government grants for work on climate change. The unspoken bias in the media is that someone who works for government is an incorruptible, even infallible, truth-teller, while anyone who works in the private sector — especially for an oil company — is ipso facto a venal liar. What prejudicial rubbish!

There is, it should also be mentioned, another similarity to Hitler’s regime, and that is the nature of the political agenda that the greens have, as I explained in my article about the “Green New Deal”: What the greens want is a government-imposed reorganization of economic activity under the direction of the government — similar to Hitler’s Nazi (i.e., National Socialist) top-down agenda for the German economy.

The most recent iteration I have seen of the big lie appeared on April 26 in a daily newsletter from The Wall Street Journal, derived from a longer article: “$115 trillion — The amount the world would need to invest in clean technologies through 2050 to limit global warming to 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, above preindustrial levels, according to the International Renewable Energy Agency” (IRENA).

Before I point out the untruths in this statement, let me commend it for being honest and forthright in one important respect: the candid admission that the radical transition away from fossil fuels will be immensely costly — $115 trillion — wow! That’s larger than the entire planet’s annual GDP. Beyond that, though, the statement is arrogant, pretentious, and dishonest in more ways than one.

The arrogance lies in the implied certainty that human efforts can devise a policy mix that would act like a thermostat regulating Earth’s temperature.

The pretentiousness is the glib presumption that somebody even knows what the “right” temperature is, much less how to attain it.

The first dishonesty is the misleading phrase “clean technology” — as if renewables are clean. They are anything but “clean” while being manufactured, transported, and installed, and they are disturbingly lethal to winged wildlife.

The second dishonesty is the disingenuous inclusion in the article of two photographs of horribly polluted air in Chinese cities. Those photos were designed to create the false impression that all fossil fuels cause severe air pollution. They deliberately conflated carbon dioxide with pollution when, in fact, CO2 is invisible, and so cannot be the source of the air pollution in the photos. True, one particular fossil fuel — coal — causes visible and toxic air pollution, which is why so many utilities have replaced coal with oil, and especially with natural gas. U.S. cities like Pittsburgh, once known for sooty air, have enjoyed clear, clean air for decades by having moved away from coal — not to renewables, but to cleaner forms of fossil fuels, and some nuclear power. More importantly, CO2 is the base of the human food chain: Plants live on CO2, and in turn, plants provide nourishment for animals and humans. To imply that CO2 is some sort of destructive pestilence is a scientific travesty.

The greatest dishonesty of the big green lie is the basic premise of the climate change alarmists — that our prosperity is somehow sinful; therefore, that we do not deserve to live in a world with more temperate, human-friendly temperatures and in a more CO2-enriched, greener world than humans had to endure in the harsh, wretched Little Ice Age.

The big green lie is several decades old. It has been taught for nearly 30 years in our country’s schools, thanks to federal legislation giving the EPA oversight over schools’ environmental curriculums, which explain why young people like AOC truly believe that the world is approaching a climate-caused cataclysm. But facts are stubborn things, and I’m still idealistic enough to believe that truth will prevail in the end. So, let us push back against the big green lie with all our might and resist its suffocating, misanthropic, utopian socialistic plans. It is socialism, not carbon dioxide, where the real existential danger lies.

Guilt, Condemnation, and Totalitarian Punishment

We don’t hear much today about the religious doctrine of damnation — the belief that everlasting punishment awaits sinners. How much of that is due to religionists moderating their theological views or simply the ongoing secularization of society is an interesting question. Regardless, although such harsh judgmentalism may cause uncomfortable tensions between people, it generally is harmless. We have a separation of church and state that, while protecting the free exercise of religion, does not confer the ability of any sect to impose its doctrines forcibly on others. Religionists may condemn us verbally or in their hearts, but they have no power to control or punish us. That is the Creator’s prerogative, and we’ll just have to wait until we leave this world to see how accurate those bleak pronouncements of damnation are.

There is, however, a doctrine of guilt, condemnation, and punishment that threatens every American’s earthly well-being and happiness. I am referring to the political Left’s fanatical embrace of certain quasi-religious doctrines — specifically, that Americans collectively are guilty of various sins that merit condemnation. The progressive punishment for our sins is to subject us to a stern totalitarian agenda that offers the only salvation from our alleged sins.

In this humanist “religion,” progressives, socialists, pagan environmentalists, et al., have assumed a moral superiority that they believe confers upon them the right to act as judge and jury, to pronounce America and Americans “guilty” of alleged sins, and to condemn and punish us by forcing us to submit to their elitist plans. The form of that punishment — indeed, the only way for us to expiate our “sins” in their eyes — is for us to submit to the progressives’ own radical socialistic central economic plan that offers salvation if we “transform” our society into a progressive utopia. The essence of their all-encompassing central plan is to impose government control over our thought, our speech, and our lives.

Let us briefly review a few of the guilt trips that leftists are using to justify imposing tyrannical measures on the American people to achieve their utopian vision.

1. White guilt — The Epoch Times contributor Larry Elder gave a marvelous talk last week at Principia College during which he powerfully debunked the myth of white guilt. (You can read more in Elder’s book, What’s Race Got to Do with It? and in his interviews with The Epoch Times.) Leftists seek to impose collective guilt on white Americans — many, both living and dead, who have steadfastly fought for, promoted, and defended racial justice — for the sins of certain white individuals, most of whom have long been dead. Blind to the reality that there are racists among all races, the collective condemnation of an entire race is itself racist. It also illustrates the perversity of “social justice” — collectivist remedies that unjustly trample the rights of innocent individuals.

Trying to punish so-called “white guilt” is also unwise and counterproductive. Once you start trying to indiscriminately punish a whole race of people for the past sins of others, you have opened a Pandora’s box. Think of Israelis and Arabs in the Middle East — the more they try to settle old scores, the more the present generation suffers. Do we want our children to shoulder the same burden of hatred, injustice, and violence that so devastated the lives of our ancestors, or can we love them enough to break the cycle of conflict? (Indeed, imagine what a hostile place the world would be if white Americans were to seek vengeance against the descendants of the often cruel and unjust oppressions of their own ancestors.)

2. Success guilt — Dennis Prager wrote about this just last week. Both Jews and Americans have shared a cultural history that was to a considerable degree shaped by their religious faith in the God of Abraham, Isaac, and Jacob. Both of these related cultures have achieved outstanding success relative to other societies and cultures in the world. Sadly, success has triggered the envy, resentment, and hatred of many who were born into societies where those cultural values and the success they tend to spawn have been absent. How dare those Jews and Americans accomplish so much! They must be punished for such effrontery.

3. Capitalist guilt — Prager alluded to this, too, in his column. Anti-capitalism has been around for nearly two centuries — ever since capitalist entrepreneurs found ways to lift the masses of people out of poverty. The great Austrian economist Ludwig von Mises published a book entitled The Anti-Capitalist Mentality in 1956 in which he diagnosed the feelings of inferiority that anti-capitalist intellectuals struggle with. Many of these highly educated intellectuals just can’t stand seeing the masses of people richly reward entrepreneurs who serve their needs and desires while at the same time place relatively little value on the intellectuals’ abstract philosophies and academic ideologies. Billionaires (unless they are pigging out with government subsidies) are society’s benefactors. They deserve our gratitude, not our hostility. The anti-rich-people animus stems from gross economic ignorance, such as persistent belief in the long-defunct 16th-century Montaigne dogma, which falsely asserted that one man’s gain is another’s loss. More than two centuries of capitalist history have shattered that fallacy.

4. Profit guilt — Indeed, as even Karl Marx understood, capitalism excels at producing wealth, and yet Marx and his followers today decry the profit-making process that has made possible today’s unprecedented wealth for an unprecedented number of people. It is tragic that so many Americans don’t understand two crucial aspects of profits: First, profits are new wealth; the only way for a society to get richer is through the production of additional value — value that is signaled by profits. Second, because entrepreneurs in a capitalist compete to serve the people’s wants, while businesses in socialist systems have to produce what their political rulers — a socialist society’s elite — command. Obviously, people are going to be better off when production is oriented toward their preferences than the government plan’s dictates.

5. Prosperity guilt — A core value of today’s environmentalism is the misanthropic and incredibly wrong belief that human prosperity is an evil that will render Earth uninhabitable. These ideologues are ignorant of the environmental “Kuznets curve.” It’s a total myth that the more prosperous people get, the more polluted their environment gets. The way the world really works is that after an initial increase of pollution as poor societies climb out of subsistence standards of living, the increasing wealth of those societies enables them to direct wealth and effort to the cause of environmental protection. The felicitous result is that economically advanced countries pollute less than developing countries. Alas, so fanatical are greens in their belief in the evil of humanity that they remain willfully blind to two great environmental blessings that have come to the present generation: first, that temperatures have modestly risen above the grimly cold Little Ice Age, making life safer; second, that the CO2 enrichment of Earth’s atmosphere over the past century has produced a huge greening of the planet. We should celebrate, not mourn, but the funereal guilt-mongers want us to mourn.

So, here is the upshot of all the guilt trips that leftists are foisting on us: In the grip of their beliefs — their fanatical, unquestioning faith in the guilt of the American people for the above-listed “offenses” — the Left condemns all who dare to dissent from its catechism. We dissidents are, ipso facto, bad people; thus, we deserve to suffer and be punished for our sins. There is no nuance in the leftists’ thinking, no mitigating factors, no sense of context; non-leftists are wrong — period. Consequently, the United States gets no credit for the considerable progress we have made and continue to make. Instead, we are deemed guilty because we have not yet fully realized our ideals. To leftists, the perfect has become the mortal enemy of the good.

If, by the way, you object to my characterization of leftists as “fanatical,” perhaps “messianic” would be a more appropriate adjective. Think of Senator Edward Markey (D-MA) who, when unveiling the grand socialist central economic plan known as the “Green New Deal,” described the proposal as “a mission to save all of creation.” “All of creation”??? If that isn’t messianic, then nothing is. Be aware of how often leftists use the religious language of salvation. Often when they promote their vision, they assert that their policies are necessary to “save” us — and tragically often, to save us from imaginary problems (e.g., wealth, success, a greening world, etc.).

This messianic zeal has congealed into a hatred of conservatives, libertarians, Republicans — literally any American who dissents from the leftist agenda. The Left has become a Leninist movement, embracing hatred of its political opponents with all the fervor that Lenin himself mustered.

The hatred that the Left feels toward its political opponents is manifest in its aggressive attempts to obliterate, destroy, and smash those opponents by canceling and silencing them. It is seen in its blatant effort to do an end-run around democracy by resorting to such machinations as D.C. statehood, packing the Supreme Court, dictating election rules to states, ramming through legislation with zero opposition input or support, etc. Under the intoxicating influence of what I have termed “the three meta-errors” of progressivism (faith in government competence, belief in human willpower, and the tyranny of good intentions), the Left feels perfectly justified in arrogating totalitarian powers to itself. It may call it “democratic socialism,” but it is anything but democratic.

Like Marx, Lenin and other past socialist revolutionaries, today’s Left believes that the end justifies the means. It seems to have convinced themselves that by dictating a radical top-down central plan on the American people, the result will be a bright, utopian future. Don’t hold your breath.

If you want to find the utopia that the Left desires, go to Washington, D.C., take a hard left, and look for it between the unicorn farm and Atlantis. No radical social plan animated by hatred for people and based on mutilations of truth can possibly bless the human race. If you need to see it in black and white, check out The Black Book of Communism — Communism being the end of the road that Marx said starts with democracy and passes through socialism. The human race has suffered enough from the socialist/Communist virus.

To advocate socialism today can only be explained by a rejection of reason and an adherence to a secular faith that elevates hope over experience. The fanatical adherents of this quasi-religious dogma, having judged American society guilty of cardinal sins, have condemned us to a state-imposed hell that is becoming increasingly totalitarian by the day.

The good news is: We Americans are not guilty of the sins with which the Left has charged us. There is, then, no justification for condemnation and no need for the totalitarian agenda that it is pushing. As has ever been the case, America and Americans will flourish if we remain free of dictatorial government plans and controls.

Urban Emigration: A Worrisome Outlook for American Cities

     

Migration seems to be a constant in history. Migratory trends fluctuate, but they inevitably surface somewhere as human beings seek greener pastures and a better life.

A new migratory trend is emerging within our country: More people are moving out of large American cities and fewer are moving in; hence, some urban populations are starting to shrink. The potential ramifications of this trend are ominous.

Before I write about what is at stake for cities and the people who reside in them, let’s look at the life cycles of cities and the reasons why an increasing number of people are either exiting cities or deciding not to move into them.

The primary factors that impel the growth and development of cities are of an economic nature. I don’t mean to discount or devalue social considerations; human beings are social creatures and we crave contact with others, but without a viable economic base, cities don’t grow. In some cases, they don’t even survive. Think of the ghost towns in the Old West: Bustling communities sprang up in areas where gold discoveries were reported, only to die out and be abandoned when neither mining nor any other industry provided an ongoing economic base to sustain a human community in those locations.

Look at where major American cities (and indeed, major cities around the world) are situated. The largest tend to be found on the shores of rivers, lakes, and oceans, or other locations that give ready access to key natural resources and the flow of commerce. That’s economic reality. In our country, the emergence of heavy industry in the 19th century led to major migrations from rural areas to urban centers, driven by individuals seeking greater economic opportunities. In today’s so-called post-industrial age, populations follow technological changes. Urban areas that attracted a critical mass of workers equipped with high-tech skills have thrived, while those less successful in keeping in step with current economic trends have languished.

So, what factors are driving the current flow of people away from American cities? The consensus opinion is: COVID-19. As a recent Wall Street Journal headline succinctly put it, “The Pandemic Changed Where Americans Live.” Indeed, many American businesses and individuals, spurred by pandemic-induced social distancing, have learned how to use newer technologies like Zoom conferences to conduct business without a need for daily trips to a downtown office. Technology has, to some extent at least, broken up long-settled patterns of conducting business while increasing options for where workers reside.  

At the moment, it is too early to say if this trend is a short-term, transitory response to the pandemic (as the Brookings Institution believes), or whether the trend will continue and perhaps even gather momentum in a post-pandemic society. There is, however, another significant driver of today’s ex-urban migration. While cities require an economic base to survive and thrive, great cities offer many embellishments and people-pleasing activities that attract people to live in or visit those cities, thereby expanding and enhancing the quality of life while generating additional jobs and prosperity there.

In the last year, however, the desirability and attractiveness of city living have suffered a serious blow. Riots, violence, vandalism, the wanton destruction of businesses (many of the mom and pop variety that represent a family’s best chance at achieving its American dream) along with increased crime and shootings, have encouraged many residents to move out and discouraged other people from moving in. There’s a simple truth here: People don’t want to live near danger. And fewer people will want to visit those cities, shop in their stores, or take in their cultural attractions. Who wants to go into a city where storefronts have been disfigured or boarded up, and where police protection can’t be taken for granted? What parents would choose to raise their kids in such surroundings?

According to the Journal article cited above, “Big cities including New York, Chicago, San Francisco, and Boston saw hundreds of thousands more residents move out than in . . . causing the net loss of households from migration to widen by 71 percent in 2020 from the previous year.” This exodus, by the way, preceded COVID. Many businesses and individuals have become fed up with high-tax jurisdictions and have been fleeing in droves. Now, urban emigrations are accelerating both because of pandemic-related factors and the worrisome increase in urban violence.

Tax bases and revenues were already shrinking due to people leaving cities. As emigration increases, tax revenues will continue to shrink. This poses a major threat to affected cities. Some cities run the risk of a grim, downward-spiraling cycle taking hold.

Fewer residents will result in lower government revenues. Fewer people residing in or visiting cities means less need for restaurants, entertainment, public transportation, etc. This, in turn, causes layoffs and closures in those types of service, translating into additional tax losses and fewer people visiting cities because of fewer amenities being available there.

With fewer tax dollars to spend, the quality of civic services — including police and fire — is likely to deteriorate. That could impel an increasing number of residents to move out. To make up for these lost revenues, we can expect desperate government officials to try to raise taxes. To the extent that they do, they will drive even more taxpayers out of their cities. What is happening currently is that higher-income residents are fleeing cities at a faster rate than lower-income people. This will accelerate the shrinkage of urban tax bases, because higher-income people pay a much higher share of taxes than lower-income people. It will also cause the “social justice” crowd to howl, because it will be lower-income people who will be left to live in newly impoverished cities.

I don’t want to overstate the case and say that the current exodus from cities will be fatal to cities. They will survive, I’m sure. But don’t be surprised if cities experiencing loss of population enter a period of stagnation and end up with much smaller populations (hence, smaller tax bases). This already has happened in some cities: See Detroit, which entered a half-century of decline in the 1960s due to the toxic policy mix of not controlling crime and constantly raising taxes.

To what extent American cities can withstand population losses, nobody can say. But if urban governments don’t find a way to re-establish a sense of law, order, and safety, people will continue to abandon and avoid those cities, greatly increasing the chances that those cities’ best days are behind them.

Put another way, what some of America’s largest and most famous cities need now more than anything else is a restoration of order and safety. The big question is: Which of those cities will have leaders emerge who are capable of meeting that need?

Raise the Corporate Tax Rate? Economic Obtuseness in High Places

Having proposed trillions of dollars of additional federal spending, President Joe Biden and his allies have launched a belated and somewhat desperate search for additional tax revenues. The economic reality is that there simply isn’t enough wealth available in the private sector to fund the explosion in government spending. The danger is that changes in the tax code may do more damage than good.

One wrong-headed proposal is President Biden’s plan to raise the tax on corporate profits. Over a decade ago, I wrote in this space why corporate taxes make no economic sense. The basic problem with taxing corporate income is that corporations are merely unpaid tax collectors for the government, and the actual burden of those taxes fall on individuals — either being “shifted forward” to consumers in the form of higher prices, or “shifted backward” onto workers via lower pay or fewer jobs, or in the form of lower returns to investors. Reams of economic research show that the lion’s share of the burden falls on workers.

A great achievement of President Donald Trump was to lower the corporate profits rate from 28 to 21 percent. The results were spectacular and historic: As reported in The Washington Post, in the third year of the Trump presidency (alas, right up until the COVID-19 outbreak), the U.S. workforce was enjoying the lowest overall unemployment in half a centur, all-time highs in employment for black and Hispanic workers, and strongly rising wages.

Why would any president want to undo the gains experienced by American workers? To do so seems mean-spirited at worst and economically obtuse at best. It represents the triumph of ideology over economics: Raising taxes on corporations is sold to the public as “making the rich pay their fair share.” In reality, workers of modest incomes will pay the highest price.

The problem here is that political scheming is prevailing over economic truth. Most people look at the proposal to raise corporate taxes superficially. I doubt most of them would support that proposal if they understood the counterproductive economic consequences of such taxes. This is the old, old problem of seeing only the stated purpose of a policy and not discerning through economic understanding what the actual consequences will be. (The French economist Frederic Bastiat wrote about the problem of the seen and the unseen over 170 years ago, and Grove City College economics professor Dr. Caleb Fuller gives a great explanation in his recent lecture at the website of the Institute for Faith & Freedom.)

In the formation of public policy today, politics always trumps economics. That is because in politics, you can vote for what you want. In economics, you don’t have a choice: economic principles are inviolable and not subject to majority vote or government edict. So, politically you can get the policy that you want, but no policy can alter economic law, so you won’t get the results you hope for unless the policy is consistent with economic principles.

One sad example of economic knowledge being shunted aside for political expediency is provided by Secretary of the Treasury Janet Yellen. Although she is an economist (and married to a Nobel Prize-winning economist), Yellen is dutifully serving her boss, President Biden, by calling for higher corporate taxes instead of exposing such taxes as nonsensical and economically harmful. Incredibly, Yellen, writing in The Wall Street Journal, perversely characterized the trend for countries to strengthen their economies by reducing corporate taxes as “a race to the bottom” rather than a race to greater prosperity.

As Yellen is the previous chair of the Federal Reserve, which is charged with promoting employment, it is jarring to see her now championing a policy that will (ceteris paribus) put downward pressure on jobs and wages. This reminds me of Salmon P. Chase, who, when he was Lincoln’s Secretary of the Treasury, oversaw the introduction of a new unbacked paper money (the “greenbacks”) to help fund the North in the Civil War, and then later, as Chief Justice of the U.S. Supreme Court, ruled greenbacks were unconstitutional.

The bottom line here is that regardless of what anti-economic contortions Janet Yellen imposes on the rest of us, it will be impossible for President Biden and Congress to increase tax revenues enough to pay for even a modest portion of his astronomical spending proposals, but of all the options they are pursuing, raising the corporate tax rate would be the worst.

Washington’s Bi-Partisan Fiscal Folly

For years, I have been sounding the alarm about chronic federal deficit spending — practiced by both Republicans and Democrats — steering our country into a fiscal abyss. I feel like a broken record as I periodically chronicle the folly of it all. The process has taken on a sense of inevitability as we watch what feels to me like a slow-motion train wreck.

I have remarked on various milestones along this dangerous course:

Americans as a people and a polity are astoundingly indifferent to debt and have embraced it as the (temporarily) normal way to live.

One significant marker along the way was the grim prospect of more of our tax dollars going to service the national debt than to national defense. (I also pointed out that this has only been possible because a compliant central bank, the Federal Reserve System, has suppressed interest rates — the cost of borrowing money — for over a decade and, indeed, has painted itself into a corner that makes ultra-low interest rates the only policy option until a financial cataclysm occurs.)

I noted that populist President Donald Trump — despite adopting a number of economically intelligent policies — was completely unwilling to rein in federal spending. Unlike some Republican leaders in previous years, Trump perceived that Democrats’ big-spending agenda was unstoppable. He indicated this major concession by readily agreeing to suspend Uncle Sam’s statutory debt ceiling in the summer of 2019 and he then adopted a $1.4 trillion increase in the government’s discretionary spending in December 2019.

Since then, the deficit spending problem has accelerated at a dizzying pace. The pretext or trigger or (ir)rationale (whatever you prefer to call it) was the COVID-19 pandemic. In my article about the December 2019 spending blowout, I underscored the simple mathematic fact of life that federal deficits were growing because even though the government’s revenue was increasing by 4 percent, spending was rising by 8 percent. Fast-forward to the present: According to bipartisanpolicy.org’s Deficit Tracker, as of this April, “While revenues have grown six percent year-over-year, cumulative spending has surged 45 percent above last year’s pace.”

Again, the pretext or trigger for this was the enormously problematical federal response to the COVID-19 pandemic. Thus, in Fiscal Year 2020, the federal government spent $6.55 trillion while collecting $3.42 trillion in revenue. In other words, almost half of federal spending was covered by new debt. This happened with the full support of a Republican president.

It has worsened under President Joe Biden. Currently, more than half of federal spending is being financed by debt. Apparently determined to reestablish the Democratic brand as the party of Bigger Government, Biden already has pushed through his $1.9 trillion “American Rescue Plan.” And now he is pushing his “infrastructure” package with an initial price tag of $2.2 trillion, although The Wall Street Journal estimates that it could ultimately cost over $4 trillion.

Meanwhile, having recently completed my 2020 income tax forms, it struck me that Uncle Sam is paying me more than I am paying him. I am the definition of a middle-class taxpayer, by no means a poverty case. So, tell me: How can any government afford to pay its middle-income citizens more than they pay the government? This brings to mind President Grover Cleveland’s statement, “Though the people support the government, the government should not support the people.” The government not only “should not” support us, it literally cannot. Government has no wealth but what it first takes from real people, so if most people either pay no taxes or receive payments from the government, the inevitable result is an unviable fiscal policy.

This is folly — fiscal insanity, actually — of the first order. And yet, official Washington charges blithely on toward its eventual fiscal crack-up.     *

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Mark Hendrickson

Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College, Grove City, Pennsylvania. These articles are from V & V, a web site of the Center for Vision & Value, and Forbes.com.

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