The Costs of Biden's Big Government
It is one of the unfortunate ironies coming out of the Biden administration that, with all the obsession about so-called equity, policies they are putting forth will only hurt the very low-income Americans they pretend to want to help.
The Biden administration is growing government at a record pace.
If what they want is opportunity for every American, government policy should aim to encourage economic growth. Bigger, more intrusive government achieves the opposite. It stifles economic growth.
The Biden administration submitted its first 10-year budget to Congress last month.
The budget projects average annual economic growth for 2023 through 2031, after they're done with all the stimulus spending in 2021-22, of 1.9%.
What does 1.9% growth mean?
Economist John Cochrane, of Stanford University's Hoover Institution, notes that from 1950 to 2000, the U.S. economy grew at 3.5% per year. Average real income over that period grew from $16,000 per person to $50,000.
Suppose instead of 3.5%, growth over that period of time was 2%, asks Cochrane.
With average growth of 2% instead of 3.5%, a $16,000 income would have grown over the 50 years to $23,000 rather than $50,000.
In recent years, since 2000, average growth has been more sclerotic, in the range of 2%.