Lifestyle or Liberty
President Biden has proposed trillions of dollars of government spending in an attempt to transform America. Much or even most of this spending is designed to promote social justice goals and also includes much of the Green New Deal. Socialist Bernie Sanders stated that President Biden could be “the most progressive president.”
The Economist magazine recently published an article stating that "Joe Biden wants to Europeanise the American welfare state,"” noting that he is proposing “an ambitious reweaving of the American safety-net.” The Economist observed that Americans (both Democrats and Republicans) like free stuff such as universal pre-school, per child allowances, free community college and that such a transformation would bring America more in line with the rest of the developed world. Most of these benefits are not targeted at lifting the poor out of poverty but at making the lives of middle-class Americans more comfortable. Converting America into a place where people are “working to live” instead of “living to work” would make America just like every other country, not an exceptional country that the rest of the world admires.
But there are a few problems with this progressive vision as has been explained in previous commentaries such as A Nordic Fantasy (March 19, 2019) and Safety Net or Spiderweb? (October 10, 2018). But for those of you that have not read (or can’t recall) these previous discussions, let’s do a quick review.
First is how to pay for it. The Europeans do it by very high taxes paid by everybody, not just the rich and big corporations. About 50% of government revenue in Europe comes from value added taxes (VAT) which are like sales taxes, and also like sales taxes, are regressive and are an extra burden on the poor and the middle class. High marginal income tax rates dip deep into the middle class as well.
Europeans can tolerate this tax burden because they are more culturally, ethnically and linguistically homogenous than is the United States. This homogeneity makes it easier to share the burden with their fellow countrymen, out of a sense of solidarity and national unity among all the people. The progressive emphasis on identity politics has shattered any sense of national unity in America and, instead of solidarity, has pitted various identity groups against one another.
The European corporate tax rates are all lower than Biden’s proposed rate. In order to remain competitive internationally after President Biden raises corporate tax rates American corporations would have to pass the impact of these taxes onto workers and consumers. The progressive agenda is popular because most Americans believe somebody else will be paying for it. They are laboring under a misconception.
Social welfare states are less productive than countries with a greater emphasis on free markets. Sweden’s rapid economic growth from 1870 to 1970 slowed dramatically after the wholesale adoption of far-reaching social welfare policies according to a study by Assar Lindbeck. Europe has trailed the United States in economic growth for decades even though US growth has also slowed as the social welfare system in our country has become more entrenched.
But the real problem with Europe’s social welfare states is that they can’t protect themselves. For seventy years they have relied on the United States to protect them. They have chronically failed to live up to their NATO obligations and most still fall short despite former President Trump’s cajoling.
All the trillions that President Biden wants to spend to transform America are intended to make life easier with government provided benefits. The American Jobs Plan and the American Families Plan are a cornucopia of benefits for lower and middle-class Americans. The benefits include free pre-K, free community college, direct payments for children, and additional tax credits all while promoting the Green New Deal and a Black Lives Matter inspired equity of outcomes in US institutions. The tons of money dedicated to education are unlikely to improve the quality of education given the promotion of diversity, equity and inclusion (DEI) programs being pushed on schools across the country. The US spends more on education per student than almost every other country. But most of the money President Biden wants to dedicate to education goes to teachers, not students. There is no mention in his plan of charter schools or any other alternative to public schools operated by unionized teachers (and their unions along with DEI administrators) that are failing our students today.
Another ton of money is dedicated to reducing America’s carbon footprint even though prior to the pandemic the United States had reduced its carbon footprint more than any other country in the world. Experts admit that all these billions of dollars will do little to reduce greenhouse gases in the Earth’s atmosphere. China gets about 58% of its energy from coal-fired power plants and plans to build hundreds more. And India is doing much the same. Between 2014 and 2019 China increased its coal-fired energy power plants by 22% and India increased 35%. The US reduced its coal powered energy by 24% in the same period. China produces four times as much energy from coal as the US. All of President Biden’s Green New Deal spending may push back the time until the end of the world as forecasted by Rep. Ocasio-Cortez by only a few days.
Europeanization of the United States as being implemented by the Biden administration would do little to achieve the announced goals of all these trillions of dollars of spending (while greatly benefiting the unannounced goals of entrenching unions across the country, hiring DEI trainers in our institutions and assuring Democratic control for the foreseeable future). To achieve these ends President Biden is proposing a massive increase in his 2022 budget, most of which is generated by non-discretionary spending (also known as entitlements) but also increasing non-defense discretionary spending by 16% while limiting the increase in defense spending to 1.7%, which is less than their estimated inflation rate of 2.3 %. The Europeanization envisioned by the Biden administration and ardently promoted by the progressive left will leave the US, just like Europe, unable to defend itself.
We are living in a period reminiscent of the 1930’s that saw the rise of Nazi Germany, Fascist Italy and Imperial Japan at a time when America was still trying to recover from the Great Depression. Like the 1930s our adversaries are arming themselves in preparation for possible conflict, just as the Nazis, Fascists and Japanese did before World War Two. China has four aircraft carriers under construction and have upped their defense budget for a decade. The Russians are rebuilding their nuclear forces in violation of the Strategic Arms Limitation Treaty and recently tested a hypersonic rocket that is designed to defeat American missile defense systems.
These rising authoritarian states are not just building up their capabilities. They are putting their capabilities to use to advance their interests around the world. China is terraforming rocky outcrops into islands to assert its control of the South China Sea in defiance of the rights of other countries. The Chinese Communist Party is destroying the traditional culture of the Uighurs in Western China and brain washing them in reeducation camps. It is doing the same in Tibet and now has taken over Hong Kong and has thrown everyone that believes in democracy into jail. It intends to do the same with Taiwan.
Russia has invaded the Ukraine and annexed the Crimea as well as the Georgian provinces of Abkhazia and South Ossetia and it has troops in the breakaway Moldovan province of Transnistria. It poisons political dissidents in Russia and also in foreign countries. Its client state Belarus used a fighter jet to divert and hijack a commercial flight in order to arrest a political dissident.
Throw in some rogue states like Iran, North Korea and Venezuela and it is easy to see that the world is a dangerous place, and it is becoming more dangerous every year.
Despite all his trillions of dollars of plans, President Biden has no plan to deal with these existential threats. He needs to choose between lifestyles and liberty. Now is not the time to waste trillions of dollars on unproven and unreliable renewable energy projects, or on progressive social policies that create unintended consequences that are worse than the social injustice they are intended to fix. Now is not the time to eviscerate the private sector when it needs to generate the revenue needed to reinvest in the technology and innovation we need to compete with our adversaries around the globe.
We cannot afford to pile on more debt from wanton deficit spending that undermines the value of the dollar as the world’s reserve currency. We need to get our fiscal house in order and pursue policies that unite all our peoples.
On December 29, 1940, a year before America’s entry into World War Two, President Franklin Delano Roosevelt gave a speech laying out the dire situation that the country faced and said, "We must be the great arsenal of democracy. For us this is an emergency as serious as war itself. We must apply ourselves to our task with the same resolution, the same sense of urgency, the same spirit of patriotism and sacrifice as we would show were we at war." Our situation is not as dire as that faced by FDR, but the situation is deteriorating, and we are not prepared. We need a strong America, not a “woke” America.
Thanks for listening.