Friday, January 15, 2021

Biden's pandemic-relief / economic stimulus bill: an opening gambit that indicates how Democrats intend to jump into this next era

 $1.9 trillion. Whew! That's s lot of addition to the debt and deficit.

Is all of it really related to to addressing the virus and attendant economic fallout?

Well, certainly the parts having to do with vaccination, testing and contract tracing self-evidently are.

An argument can be made for aid to state and local governments. States and municipalities generally are obligated by law to keep their governments in the black, and in this past year, that's resulted in a lot of layoffs and curtailing of services.

Tax credit for children? Again, a case can be made. 

Another big check - $1400 per person - to everybody that has received a $600 check recently? Now we get a little questionable. It's another band-aid at best. It does nothing on the structural level, which is where resources need to be applied. 

But then we get into the stuff that has the strong odor of wanting to permanently impose a new degree of statism on the nation under the guise of doing something about the current crisis. Expansion of child-care subsidies and family-leave benefits look primarily to be ways to double down on social engineering. The Left has long wanted to use the heavy hand of government to lessen the primacy of the family unit in our society and get the kiddies out of the home at the earliest possible age. And child-care subsidies amount to making Citizen A foot the bill for Citizen B's choices in life. 

Of course, the retort to that is, and has been for some time, "But families can't make it on one income anymore!" Is that universally true? It seems to me to be laden with assumptions about how much leeway a husband and wife don't have about setting household budget priorities. 

And family-leave policy is, at its root, using the coercive power of government to make private organizations conduct operations in a manner not necessarily of their own choosing. Certainly, any business that has a great staff member who turns up with a work-home balance challenge engendered by the arrival of a new family member (or the illness of a family member) is going to be motivated accommodate that in order to retain that person's contribution to the company. But that ought to be thought out and agreed upon between the business and the employee.

Which gets us to the most egregious item in Biden's grab-bag of goodies: an increase in the federal minimum wage to $15 / hour.

Longtime LITD readers know that the minimum wage is a major burr in my saddle.

To reiterate, there are at least three reasons it's bad and wrong:

  1. It is government telling a private organization how to conduct its operations.
  2. It distorts the market value of an hour's worth of labor
  3. It elbows the most economically vulnerably among us - minority youth - out of the labor market. 
You can always find some wiseacre who will cite certain sectors in certain cities in which a hike in the minimum wage has not had a big detrimental effect. Debating such folks can take one down a rabbit hole. Various studies come to different conclusions, and often hedge at that, given all the variables involved. 
Plus, anecdotal evidence of restaurant, coffee shop and bookstore owners in progressive areas who had to lay off staff and/or cut hours and/or close abounds.


 The nonpartisan Congressional Budget Office estimates that even gradually raising the minimum wage to $15 by 2025 in a growing economy would likely kill 1.3 million jobs, and perhaps as many as 3.7 million. Imposing a drastic minimum wage increase on small businesses that are already struggling to stay afloat during a recession is especially absurd. Moreover, forcing restaurants, which are failing at record rates, to raise their own tipped minimum wage by 600 percent is economic malpractice. Perhaps high-cost cities like New York City and San Francisco can afford a much higher minimum wage, but other parts of America with lower incomes and prices will not be able to absorb this policy. It has no business in a relief package.

So we can begin to see the broad contours of how confident Dems are that they can at least float a pretty aggressively leftist initiative right out of the gate.

The Senate, tied as it is, is not going to sign on to this in its present form.

But be prepared for howls about heartlessness when conservatives object to the statist stuff. 

One favorable aspect of the scenario is that, with Trump out of the way, Congressional righties can articulate the case for their position in a coherent manner, based on principles and not on good or bad "deals."

Let's hope they're up to it.


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