Biden: Democrats Are Party of Fiscal Responsibility, Republicans Would Make Inflation Worse
President Joe Biden, with a straight face, tried to argue the Democrats are the party of fiscal responsibility and if Republicans were in charge inflation would be worse.
As a reminder, every Republican voted against the $1.9 trillion American Rescue Plan after Biden took office in March 2021, because even top Democratic economists warned it would be inflationary.
Further, no GOP member of Congress voted for the misnamed “Inflation Reduction Act,” the $700+ billion, scaled-down version of Build Back Better in August, because experts warned the new spending and tax program won’t address inflation and may make it worse.
Then of course there is Biden’s student loan cancellation plan via executive decree that is estimated to cost $400 billion according to the Congressional Budget Office.
The Committee for a Responsible Federal Budget reported last month that the “Biden Administration has enacted policies through legislation and executive actions that will add more than $4.8 trillion to deficits between 2021 and 2031.”
Despite all these facts and more, Biden said at the White House last week, “Everything [Republicans] are proposing would make inflation worse.”
Biden: “Everything Republicans are proposing would make inflation worse.” pic.twitter.com/LPsJ5RnCEF
— Greg Price (@greg_price11) October 21, 2022
During those same remarks, Biden touted cutting the deficit by a “record” $1.4 trillion.
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So the Democrats drove the deficit way up, then brought it down while still running a $1.3 trillion deficit and claimed victory.
Former President Barack Obama made a similar claim. After Obama took office in 2009, he and the Democratically controlled Congress ran the deficit up over $1 trillion dollars for the first time in U.S. history, which persisted for his entire first term.
Republicans won control of the House in the 2010 midterms (actually taking office in 2011) and the Senate in 2014, imposing some fiscal restraint on Obama. The deficit fell to $438 billion in 2015, though it rose again to $587 billion in 2016 as the economy slowed during Obama’s last year in office.
Part of the reason was the built-in costs of Medicare and Social Security also rose as more and more Baby Boomers hit their retirement years.
Biden’s argument why Republicans regaining control would allegedly make inflation worse is that they would seek to make the Trump tax cuts permanent.
“They’ll pass massive tax cuts for the wealthy, make them permanent — which they’re not now — the individual tax cuts,” Biden said.
“It’s mega MAGA trickle-down. Mega MAGA trickle-down — the kind of policies that have failed the country before and will fail it again. It’ll mean more wealth to the very wealthy, higher inflation for the middle class. That’s the choice we’re facing,” he added.
Pres. Biden on Republicans’ plans for the U.S. economy: ‘It’s mega-MAGA trickle down — the kind of policies that have failed the country before and will fail [the country] again’ pic.twitter.com/VPLHzBqY52
— NowThis (@nowthisnews) October 21, 2022
To borrow a Reaganism: There he goes again.
Democrats derided former President Ronald Reagan’s supply-side tax cut policies as “trickle-down economics,” but following across the board tax cuts, like those passed under former President Donald Trump, the economy took off, experiencing 4.6 percent growth in 1983 and 7.2 percent in 1984.
It should also be noted that federal tax revenues doubled during the 1980s from approximately $500 billion to $1 trillion, as the economy grew nearly a third larger from 6.8 trillion to 9.2 trillion GDP.
That’s the whole point behind the right kind of tax cuts: They create increased economic activity, which leads to higher profits, more jobs and increased revenues.
Eighteen million jobs were created during Reagan’s eight years in office (when the population was nearly 100 million fewer than now). The inflation rate stood at 4.4 percent in 1988, Reagan’s last year in office, down from 12.4 percent in 1980 when he was elected president.
During Trump’s term, prior to the COVID shutdowns, the nation experienced its lowest unemployment rate in 50 years and highest number of people employed, ever — 160 million.
Further, the federal treasury took in over $4 trillion in revenues for the first time ever in fiscal year 2021 and received approximately $4.9 trillion this year.
By way of comparison, the federal government took in $3.3 trillion in revenues in 2017, prior to the Tax Cuts and Jobs Act being implemented.
So Trump’s tax cuts worked as advertised by encouraging economic growth, which creates new jobs and leads to more revenue.
By the way, inflation stood at 1.4 percent when Trump left office in January 2021 versus the 8.2 percent now.
Biden derided the tax cuts as a $2 trillion giveaway to the wealthy and corporations, which even The Washington Post reported in 2019 is not an accurate characterization.
Inflation is ultimately caused by too many dollars chasing too few goods.
Republican policies counter both by incentivizing the economy to create more goods — as former Trump and Reagan economic adviser Larry Kudlow effectively explained this past summer — and generating more tax revenue, which if managed properly can lead to lower deficit spending.
When you pay people not to work, with Federal Reserve printed money, the opposite dynamic is actually in play: more dollars plus less stuff equals inflation.
In an interview with Tucker Carlson last year, billionaire co-founder of MicroStrategy Michael Saylor did a good job laying out how governments through time, to their downfall, have followed the policies Biden is following now.
“Inflation is a phenomenon whereby a government authority prints more currency, and why do they print more currency? Because if I want to pay a trillion dollar bill, I either have to tax you a trillion dollars or I have to print a trillion dollars of money,” Saylor said.
“It turns out that it’s a lot easier to print money than it is to tax people. And so it’s either inflation or taxation,” he added.
He offered the examples of the Persian, Greek and Roman empires, along with the Italian Renaissance states, and the kings of England where this dynamic played out.
House Republican Majority Whip Steve Scalise told Mario Bartiromo Tuesday that the GOP’s first order of business if they retake the House will be to counter the Democrats’ inflation-causing policies.
WATCH ?@SteveScalise on House Republicans’ plan to rein in reckless spending:
“Stop the madness—all these multi trillion dollar spending bills, that’s what’s driving up inflation. It’s the Biden-Pelosi agenda.” pic.twitter.com/JQWZpcglI9
— House Republicans (@HouseGOP) October 26, 2022
American voters “recognize really bad policy when they see it,” Scalise said. “Stop the madness — all these multitrillion-dollar spending bills, that’s what’s driving up inflation. It’s the Biden-Pelosi agenda.”
