Brian Riedl, senior fellow at the Manhattan Institute, started by CIA spook and Iran-Contra suspect William Casey, has advice to provide via the oligarchy propaganda outfit New York Post. First, it is important to know how much contempt Brian Riedl has for people who might beg to disagree with him as described in this recent Tweet:
Brian Riedl is not the only one schooled in Economics. Now, let’s take a look at the dressed up ideology that passes for Economics from those on the payroll of the plutocrats in his article “A $2 trillion mistake? Here’s what Washington must do to get infrastructure right“:
First, Washington should spend only as much as it is willing to offset with other savings. Putting $2 trillion on the national credit card would boost deficits that are already on course to surpass $2 trillion a year within a decade, due mostly to entitlements.
This one’s easy. Reverse the two trillion in Donald Trump tax cuts from 2017 and the money appears. But let’s not think about that right now because our ideology is that taxes must be cut, cut, cut, taking government out of the way of business so that business can regulate the people as done in the 1800’s, and so that people don’t have any safety net to provide even the slightest freedom to change jobs (health insurance) or even to stop working as their bodies fall apart (Social Security retirement). Because “entitlements” must be cut — how bold Brian Riedl is about his goals.
These deficits are projected to push annual interest costs over $1 trillion. And if interest rates merely return to 1990s levels, interest on the debt will become the largest part of the budget.
Let’s not mention that increasing federal government debt is a fixture of the Ronald Reagan revolution. Since the failed 1981 massive tax cuts for the rich, part of which had to be repealed, and four more giant tax cuts ever since, the national debt has grown out of control by design. Yes, it is by design as Thom Hartmann explains here — “two santas” strategy.
Deeper in the debt scare is something more fundamental. Whose money is it anyway? As it stands, the Constitution gives the national government power to create money. Our founding document does not say and certainly does not require that the government must borrow the money it creates — money can be created without debt and without interest. The government can spend money directly into circulation without borrowing it. Pretty simple really.
But inflation! Spending money into the economy could be inflationary, they say. Sure it could, but increasing the money supply is inflationary whether it is created by government or by banks and whether it is spent into circulation or borrowed and attached to debt.
Yet Democrats are already calling for $40 trillion in other new spending over the decade, and Republicans just cut taxes by $2 trillion. Something has to give.
First, as already pointed out, the Republican tax cut “has to give.” As for the 40 trillion, that represents future costs for entitlements plus ideas that have not been fully designed, but it sure sounds like a scary number. Brian doesn’t have any suggestions as to which parts to keep or change, he just complains about everything. OMG, 40 trillion on needs of the people. We can’t have any of that.
At the same time, $2 trillion is too much to finance in taxes.
Didn’t he just say a second ago that Republicans gave a two trillion dollar tax cut? The money is right there. Brian Riedl is literally minimizing the tax cuts and maximizing the same exact number for spending increases from one sentence to the next. Talk about double-think.
The $1,500-a-year-per-household cost would require either raising the federal gas tax to $1.53 per gallon from 18.4 cents or raising all income-tax rates by 2.2 percentage points. A different approach is needed — one with a much smaller price tag that is also offset with spending cuts.
Excuse me for being redundant but here’s a “different approach” from Brian’s suggestion: REVERSE THE LATEST GIANT TAX CUTS!
Funny how two trillion in Republican tax cuts may favor corporations and the wealthiest people while including a not-so-generous provision to help out some regular “red state” people (more of a penalty in the “blue states” that Donald Trump resents so much) that expires at a politically convenient point, but tax increases for infrastructure must be spread equally upon all us no matter how much money we make. Brian goes on to list a bunch of objections:
One problem is bureaucratic red tape. Nearly a century ago, the Empire State Building was built in 410 days. More recently, Boston’s Big Dig took 25 years from planning to completion. Today, California’s bloated high-speed rail is expected to take nearly 40 years from planning to completion, while basic infrastructure maintenance is shortchanged.
Five people died building the Empire State Building, but those lives mean nothing compared to the “bureaucracy.” It’s basic cost accounting: the costs of regulation or potential liability versus the cost savings of not having to be safe or deal with courts. And ever since Neil Gorsuch wrote the opinion and cast the deciding vote keeping employees out of court altogether, lawsuits aren’t so much of an issue anymore.
The Boston Big Dig and the California high-speed rail projects were heavily controlled by states, but don’t let that minor point get in the way of the next ideological claim:
The solution is not $2 trillion more of federal mismanagement. Instead, Washington should get out of the way and empower states and local governments to set their own infrastructure priorities.
There it is just as if Grandpa Reagan were saying it himself: “get out of the way.” But it’s not “government” that needs to get out of the way — it’s “Washington.” By some form of magic and despite Brian’s own examples indicating otherwise, “state” governments are representative and efficient, not the federal government.
There is no ideology that would indicate that states are somehow inherently better at governing than the federal government. Getting government out of the way contorts into give more government power to the states. One theory suggests that because states are smaller, they are closer to the people and therefore more under the people’s control.
The truth is that people don’t know much about their state government. Can you name your state senator and representative (or do you even know their proper titles)? I couldn’t even find a poll on it (which is quite the indication that coverage is poor), but here’s one saying only 37 percent of Americans know their federal representative. Another truth is that the same plutocrats funding Brian Riedl also fund huge numbers of elected state officials who can do the bidding of the oligarchy outside of the mainstream spotlight.
Just to drive this point about state efficiency home, consider the Medicaid expansion in the Affordable Care Act or “Obamacare.” The Act covers nearly all the costs of the expansion but states still refuse to provide health insurance benefits to millions of people. That’s just mean — really mean. Pure punishment.
Lawmakers should also drop the illusion that infrastructure will bring economic stimulus. House Speaker Nancy Pelosi recently said this initiative is “about jobs, jobs, jobs.” Yet with the unemployment rate already at 3.6% — the lowest since the 1960s — there is no significant slack in the economy to mobilize. All the government can do is transfer capital and jobs from one part of the economy to another.
But there was growth in the 1960’s averaging 5.0 percent per year. We have not seen anything close to that ever since — and none of the five giant tax cuts have brought us back up to anything close. Apparently, growth can take place in low unemployment as Republicans love to brag about while Donald Trump occupies the White House. But that’s that propaganda and this is this propaganda. They must stay separate.
Never mind the Obama-era panic over the Labor Force Participation Rate holding steady at about 63 percent for five years now. Donald Trump is exempt from such considerations.
No wonder Brial Riedl sends out angry tweets about non-experts. Because it doesn’t take an expert to discredit his basic ideologically-blind errors.