Either figure means the federal government’s share of the economy would dramatically expand. Penn Wharton’s figure means that Biden’s plans would make federal spending roughly 24 percent of gross domestic product by 2030, the highest figure outside of the post-recession budgets in 2009 and 2020 in more than 50 years. Riedl’s figures show it could exceed 25 percent by then. State and local governments spend around 15 percent of GDP, after accounting for transfers from the federal government. Assuming that does not change, either figure places total government spending with the Biden agenda at roughly 40 percent of GDP. That would be roughly equivalent to government spending levels in Canada and Britain and well above that in countries such as Australia and New Zealand.
Biden’s plan also doesn’t pay for itself even though it would significantly increase taxes. The competing analyses agree that Biden’s tax proposals would raise between $3.4 trillion and $3.5 trillion in new revenue. His overall plan, then, would dramatically increase the federal deficit, which has already ballooned to nearly $1 trillion per year under Trump before the novel coronavirus struck. Budget watchdogs are already warning that deficit levels are dangerously high and unsustainable. Biden’s plans would make the crisis much, much worse.
This prospect should alarm Americans. Even the United States can’t simply print money forever to pay for its government. Eventually, the chickens will come home to roost. International experience suggests such reckonings usually come in the form of runaway inflation, rapid increases in interest rates, loss of access to credit markets or all of the above. The only way to prudently avoid such crisis scenarios would be to raise taxes on everyone to reduce the deficit. That could take the form of new value-added taxes, a route Canada took to curb its government borrowing. It could also mean extending the top income tax rates to much lower levels of income, as virtually every other developed country already does. Or it could mean higher taxes on gasoline and other carbon fuels, again something most other countries already levy. The result, however, is the same: Everyone pays more now to fund the level of government spending they want.
Biden’s proposals would be among the largest in decades. Riedl’s figures show that Biden’s proposed spending increase is more than that proposed by former Democratic nominees John F. Kerry, Barack Obama and Hillary Clinton combined. The Penn Wharton Budget Model’s Kent Smetters goes further, calling it the largest proposed spending increase since George McGovern’s run in 1972. Normally, an unprecedented set of proposals would be the center of public discussion. Instead, we hear virtually nothing about them from the candidate or the media.
That deafening silence is bad for democracy. Elections should be about choices. Trump has been remiss in not offering anything approaching a coherent second-term agenda, an absence that should also concern Americans. But that doesn’t excuse avoiding discussion of Biden’s agenda. Many Americans simply don’t know what they are planning to vote for, and that means many are likely to be in for a rude surprise should Biden win.
This, in turn, means that public silence will ultimately be bad for Biden. The centrist suburbanites whose votes will be key to electing him aren’t progressives. They have voted for center-right Republicans even as recently as 2018, when many voters split their tickets between orthodox Republican governors and anti-Trump Democratic congressional candidates. A good portion of them will surely take Biden’s claims to be a moderate at face value and will be surprised when big government is suddenly back on the agenda. Obama similarly campaigned as a centrist in 2008 only to make Obamacare his main governing priority. The result was the 2010 Republican tsunami that eliminated his party’s dreams of realigning U.S. politics for a decade.
Biden’s big spending proposals deserve more attention than they’re getting. Americans already express low trust in government; that will surely go even lower if they are presented with an unexpected bill at the end of this election meal.
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