The economy cannot shoulder a $ 3.5 trillion burden
As the country recovers from a medical and financial calamity, we are finally approaching a point of relative economic stability after a year of spending more than $ 5,000 billion to keep the economy afloat. But with Congress on the verge of passing a $ 3.5 trillion infrastructure bill, we risk dealing a catastrophic blow to an already fragile financial system. Before emptying the nation’s wallet and removing funding from future priorities, we desperately need to consider the consequences of passing the biggest spending bill in U.S. history.
With US national debt exceeding $ 28.8 trillion and the country expected to default on its obligations by mid-October if the debt ceiling is not raised, our near-term economic future is anything but. certain. If Congress fails to come to a compromise and the country defaults on its debt, we could instantly be plunged into another recession, with the potential loss of 6 million jobs. Even without the doomsday scenario of a default, we still risk an economic downturn due to an increase in cases of the delta variant and other strains of the virus. As the world has painfully learned over the past 18 months, not planning ahead has dire consequences, and maximizing our spending now could easily lead to a lack of funding for unforeseen crises in the future.
While the $ 3.5 trillion figure on the infrastructure bill already looks huge, the even more concerning figure is $ 24,000, the amount of spending in the proposal per US taxpayer. The vague plans put forward by the Biden administration to raise the corporate tax rate by 7% and the capital gains rate by 19.6% would not only not generate enough revenue to cover the full cost of the bill, but would significantly weaken small American businesses in dealing with it. The cost of that spending would ultimately fall on middle-class taxpayers and the next generation of Americans, who will be burdened with two decades of reckless spending on both sides of the aisle.
Another major risk comes from inflation. After the $ 5,000 billion pumped into the economy during the pandemic, the economy is dangerously overheated, with August’s consumer price index rising 5.3% year-on-year, what makes inflation more and more likely is here to stay. Since wages are not rising fast enough to keep up with ever higher prices, this increase imposes a huge cost on the lower and middle classes. Since last year, the price of food has increased by 3.7%, energy and utilities by 25% and gasoline by an astronomical 42.7%. Recklessly flooding the economy with an additional $ 3.5 trillion could prove devastating to families who are already struggling to pay their bills.
Meanwhile, the bill’s $ 3.5 trillion price tag is made up of a mishmash of items that do not meet Merriam-Webster’s definition of “infrastructure,” making it seem like the bill was retro-designed from its eye-catching cost. Unlike the bipartisan $ 1.2 trillion infrastructure bill passed by the Senate and due to be voted on in the U.S. House, the $ 3.5 trillion bill splurges on many partisan priorities that do not meet the urgent needs of our country’s crumbling infrastructure. The $ 1.2 trillion bill offers one-time upgrades at a fraction of the cost, with $ 110 billion for roads and bridges, $ 66 billion for railways, $ 47 billion for deal with looming climate disasters and even $ 7.5 billion to build electric vehicle charging stations. omnipresent. This bill is not just a victory for American workers, the environment and infrastructure, but a victory for bipartisanship and unity. On the other hand, the $ 3.5 trillion bill includes partisan priorities such as universal kindergarten, a free community college, expanded child care credits, and an expansion of the Affordable Care Act. . While all ideas are positive in theory, these hardly constitute impending crises or “infrastructure” needs. In practice, this wishlist would do America more harm than benefit, raising inflation and putting the nation in debt while fixing some important issues for ordinary citizens.
In a time when America is more polarized than ever and our lawmakers seem to disagree on anything, now is not the time to sow our growing division with a controversial plan that puts our economic future on the line. danger. Instead, our lawmakers should follow the lead of Senator Joe Manchin, DW.Va., who called for a “strategic pause” in government spending until our economy is healthy again. By choosing to pass the bipartisan $ 1.2 trillion bill instead, we can find common ground and work together to rebuild our nation, proving that despite our differences, Americans are still able to unite. to make real progress. Hopefully, Congress will make the responsible decision.
Nikhil Sharma is an opinion columnist and can be contacted at [email protected].