Biden Goes off the Deep Spend

May 17, 2021

The worst campaign ad is a bad economy. And right now, that's exactly what the Democrats in charge of every lever of government are worried about. While President Biden seems quite content to blow through trillions of dollars on programs Americans don't need -- or want -- the party's leaders are starting to exchange nervous glances about what the economic indicators (and past administrative bosses) are saying about the storm ahead.

Bill Clinton's Treasury secretary, Larry Summers, has been trying to get people's attention on the looming disaster for months. When Democrats insisted on going it alone on another COVID stimulus package, he went to the editorial pages of the Washington Post and said flat-out: it's risky. Sure, he agreed, the motivation for helping people is compelling, but "much of the policy discussion has not fully reckoned with the magnitude of what is being debated."

If the package is enacted, he said (and it was), "Congress will have committed 15 percent of GDP with essentially no increase in public investment to address [other] challenges. After resolving the coronavirus crisis, how will political and economic space be found for the public investments that should be the nation's highest priority?" Please, Summers wrote, Democrats have to make sure that COVID relief is enacted in a way that "neither threatens future inflation and financial stability nor our ability to build back better through public investment."

His advice, like everyone else's, was ignored. Democrats plowed full steam ahead without so much as a glance at Republicans and set in motion the crisis unfolding now. Inflation is no longer a question of "if," but "how bad?" Prices are through the roof, employers can't find workers to fill the gaps, and what is Biden's response? Let's spend more. Now, Summers, who saw the disaster coming a mile away, says he's more concerned now than he was when the pandemic package passed. "Data are pointing more towards higher inflation than I expected," he told Axios. "And sooner."

The White House is trying to head-off the concerns, insisting that all of this is just temporary. Summers disagrees. "If the spending is coming up front and the taxes are coming down the road, then on net, that's going to add fuel to the fire." Making matters worse, all of the pain that manufacturers and other businesses are experiencing is only being passed on to consumers with supply shortages and higher costs.

But Democrats should have seen this coming, Senator Rick Scott (R-Fla.) argued. "There's never been a time that I know of in history where you have had a significant increase in money supply where you don't have inflation." At the end of the day, "You have to stop the reckless spending," he said. "The federal government's got to start living within its means."

And if the president won't listen to Republicans, he'll be forced to listen to voters. After all, it's not just his agenda that's at risk. It's his party's shrinking majorities. If anyone should have learned that lesson, it's Joe Biden. He was there when Barack Obama went about "fundamentally transforming America," only to pay for it one year later. By the time Obama left office, NRO's Matthew Continetti reminds everyone, Republicans had full control of Washington and most state houses around the country. Twelve years later, conservatives can only hope that cycle -- fed by the Left's reckless and insatiable desire for Big Government -- repeats itself.