For those out there that still have financial scruples, the transition from Trump to Biden is feeling more and more like being tossed out of the frying pan, into the fire. We have gone from spend-but-don’t-tax (Trump), to spend more-tax more (Biden). But to restore meaningful economic growth coming out of a pandemic, the policy we need is spend-less-tax-smartly.
On Tuesday, In Michigan, President Biden touted his infrastructure plan, highlighting a $174 Billion subsidy for electric vehicles. In the same bill, curiously named the “American Jobs Plan,” Biden would eliminate federal tax breaks for fossil fuel companies. This is one of the more shameless examples of corporatism in recent memory, and it has no place in a free society. Our government does not exist to pick favorites among industries. The free market, driven by consumer choice, is an extremely efficient selector of winners and losers. And, even if you think that a higher level of State intercession in the free market is justified by the exigency of climate change, subsidies like this are still not the best policy because they don’t move the needle on global warming relevant to their cost. As this study sets forth, there are reasonable, cost-effective countermeasures which would move the needle much more on the climate change front—only one of which is budgeted for in Biden’s infrastructure plan ($180 Billion in clean energy R&D might move the needle relevant to its cost, to give credit where it’s due.)
But here we are discussing climate change mitigation in the context of a $2 Trillion infrastructure plan—that’s exactly the problem. Infrastructure should be one of the easiest, most non-partisan bills imaginable. But in no universe should it come with a $2 Trillion price tag. Granted, there are colossal inefficiencies built into modern federal construction contracting (from EPA Environmental Impact Assessments, to DOT’s buy-American mandate, to unionized labor, it’s easy to see how construction costs have nearly quintupled from 1960 to present, and are now the most expensive in the world. But even so, fixing our roads, bridges, pipelines and electrical grids (conventional infrastructure) can be done for far less than half of Biden’s price tag—closer to $600 Billion. Something else to keep in mind here is that States and private companies can and should shoulder much of the costs of building out infrastructure—not the federal taxpayer. Federal infrastructure should be limited in scope to major, public construction projects that cross state lines or navigable waterways, per the constitutional purview of the commerce clause. Oil companies, for example, are entirely capable of building their own pipelines without federal tax dollars—They have before and could again. Telecom companies can build out their own broadband lines without federal tax dollars—They have before and could again. Railroads are more than capable of financing new lines—They have before and could again. States, likewise, have long proven capable of building out toll-roads, bridges, turnpikes, without federal assistance. Point being: we shouldn’t think of infrastructure as the exclusive jurisdiction of the Federal government.
With the national debt approaching $30 Trillion, “throw money at the problem,” is rarely going to pass muster as sound policy. Yet, this seems to be the Biden administration’s strategy. Between his Covid Relief Plan , the American Jobs Plan, and the American Families Plan (https://www.washingtonpost.com/us-policy/2021/04/28/what-is-in-biden-families-plan/), the administration is near $6 Trillion in proposed spending. Now, unlike President Trump, he does plan to pay for this unprecedented federal binge, at least partly, by raising taxes. While this might be a net win for the national debt in the short term, it would almost certainly stifle growth in the longer term, as history has shown. More Obama era “stagflation,” anyone?
So, as is often the case, everyday Americans find themselves stuck between two administrations with deeply flawed fiscal policies. Right when we could really use smart, efficient, pro-growth policies to turbocharge our COVID recovery, we’re offered corporatism, bureaucracy, higher taxes, and $6 Trillion in new spending. Out of the frying pan, into the fire.
A lawyer, writer, and world traveler, Adam brings a versatile and independent perspective to the Liberty movement. His first foray into politics came in law school, volunteering for Arnold Schwarzenegger’s gubernatorial campaign in California. Then in 2012, Adam worked with Ron Paul’s presidential campaign before exiting politics for while. He worked in the private sector for nearly a decade, negotiating energy transactions and advising companies on legal and ethical compliance. But he always kept one foot in the policy arena, authoring liberty-leaning political commentary in blog posts and the occasional op ed.
Now, Adam is pivoting full-time to policy because he feels the country is at a cultural and economic crossroads. He hopes to craft sound policy and contribute independent thought leadership to help restore free minds, free markets, and free inquiry for all Americans, regardless of background.