|We Are Starting A New Series Of Mistakes|
After these numbers were released, Biden came out declaring his administration with its two
newly elected Democrat Senators would hit the ground running.
“The price tag will be high,” Biden said of his planned package in Wilmington, Delaware. He promised to lay out his proposals before taking office on Jan. 20, he also stated, “It will be in the trillions of dollars.”
The package Biden laid out only came in at 1.9 trillion dollars disappointing some of his followers. This is because it does not include a great deal of what he has promised. Missing were things like spending on infrastructure and forgiving student loans. This, however, is only the first of many packages that will be rolling through congress in an effort to halt the economy from unraveling. To see how devastating the pandemic and the lock-downs instituted to slow its advance have been on the economy we only need to look to cities such as New York where it has become obvious the effects will be long term. Recent revelations that many large and notable companies now intend to relocate to smaller cities in coming years will only exacerbate these problems.
While the nation's average unemployment rate is around 6.7% Bloomberg
reports the Bronx's unemployment rate stands around 16%. Not only could the
virus-induced downturn result in roughly a third of the city's
businesses going under. Cities, where tourism is a large part of the
economy, have been particularly hard hit. Hotels, restaurants, and all
the businesses that serve them and their customers are suffering. The failure of these small and medium-sized firms are causing people to flee such areas en masse. Which in turn causes
vacancies to soar and rents to fall. Simply throwing money at a problem does not guarantee it will halt the formation of a self-feeding loop.
To be perfectly clear, the problem we face is that poorly spending even trillions of dollars does not necessarily create a strong economy. As usual, when it comes to government spending more often than not much of the money is simply squandered. An example of this is how many people see government spending on infrastructure as a job creator and a silver bullet for our ailing economy I would like to raise a word of caution, things are not that simple. What is clear is that when Washington begins to talk about infrastructure spending hands go out across America as politicians and businesses rush to endorse such programs. Of course, they claim this should be administered on a local level so the money is not squandered by the inefficient minions of Washington that do not understand the priorities we face.
This sets in play the feel-good issuance of what is herald as free money being gifted by those in charge. The truth is more "bridges to nowhere" and wasted spending exists than the taxpayer could ever imagine. Often infrastructure spending falls short of creating real wealth for our country but merely feeds cronyism and ends up lining the pockets of those in power and their friends. History shows much of infrastructure spending is poorly spent. In the long run, a country's economic policies and its system of taxation are far more important to the economy than government spending.
The fact governments across the world are embarking on similar spending programs should do little to reassure Americans considering the explosion of debt we have witnessed since 2008. A slew of problems come with economic decline and the working poor take much of the pain, this becomes evident in the form of more social unrest and increasing violent crime. As rents and mortgages go unpaid do not be surprised to see inequality continues to grow. We should remember this is all an experiment destined to result in a false economy so rooted in unsustainable stimulus that it cannot endure.
Footnote: Rather than seeing this as doom porn, please consider this as a strong objection to the path we are on and have been on for some time.
Republishing of this article is welcomed with reference to Bruce Wilds/AdvancingTime Blog )