Those progressives over at American Prospect, it is possible to wonder whether they’ve quite got the basics of how the economy works at times.
So, sure, they want to spend lots more money through government, we get that. We think they’re insane, getting the Feds to do stuff is not efficient. Still, differences in political beliefs and all that.
We can also note that they’re already running out of money. They’ve only been in power under 3 months and are already worrying about how they can retop the coffers. You know, having already spent everything.
At which point this suggestion:
President Biden is proposing to spend $2 trillion on physical and human infrastructure, and more in additional waves of social investment. He wants to pay for this with some $2 trillion in revenue increases over 15 years, which will cover the costs of the spending, and then begin to reduce deficits.
But some Democrats, notably Joe Manchin, are balking at some of the tax hikes. In addition, more spending is still to come, especially for the caring economy.
We need some alternatives to increases in tax rates. Here are several revenue raisers that don’t increase tax rates and also are good policy on their own terms
As I say, they’ve already spent everything and are looking around for more ways to get ahold of yet more. One of which is this:
Fifty-year infrastructure bonds. Biden has agreed that the next round of spending needs to be paid for. But we could make a partial exception with special 50-year infrastructure bonds that would take advantage of today’s very low interest rates and lock in low borrowing costs for government. If 50-year bonds covered, say, one-fifth of the cost, that’s another $400 billion we don’t need to raise with increased tax rates.
Err, bonds do need to be paid back, right? So it’s not an absence of tax rises, it’s a delay in tax rises.
Further, given the Fed’s funding of much spending – by QE buying of bonds – this is really just monetisation of fiscal policy. Again. Something which doesn’t have all that great a record when done to excess now, does it?
Why is it so difficult to get these people to grasp the basics?