In my last four columns, I discussed Emsi’s free eBook, “The Demographic Drought” (bit.ly/3b7teIE) and the effects of the collapsing birth rate. The ebook discusses the sansdemic that is upon us. Sans meaning without; demic meaning people.
Because of the pandemic, 3.2 million boomers retired in 2020, compared to 1.5 million who retired in 2019. The rate at which baby boomers are exiting the workforce is far larger than the rate at which Generation X, millennials, and Generation Z can offset.
Further exacerbating the labor shortage, ever more Gen-Xers, millennials, and zoomers are electing not to work. The labor force participation rate which peaked in April 2000, has steadily fallen to 61 percent today.
Bank of America says that anyone earning less than $32,000 per year before the pandemic is financially better off not working, collecting federal and state unemployment benefits instead. Why would anyone choose to work when the government pays more not to work? With fewer people working and the cost of labor skyrocketing, businesses are making the rational choice of substituting low-skilled laborers with machines.
Further exacerbating the problem is that Biden and the Democrats are spending money like drunken sailors. I’ve seen my share of drunken sailors. The difference is that drunken sailors are spending their own money which eventually runs out. Not so for Democrats. They just keep spending and printing more money, charging it forward to our kids’ and grandkids’ accounts. They raised the U.S. national debt from 110 percent to 128 percent of GDP in a mere six months.
Nevertheless, the Democrats are literally going for broke. Last week they proposed another $4.1 trillion in federal spending in addition to the $600 billion on infrastructure. This would be the largest spending increase in U.S. history, going from 20 percent to 25 percent of GDP. They are making this an entitlement, meaning these new programs will expand automatically without an annual appropriation by Congress, making them politically impossible to rein in. It’s the progressive wish-list from hell. Every major program that Biden has asked for is robustly funded including expansions in Medicare, Obamacare, teachers’ unions, affordable housing, home healthcare, food, welfare, benefits for illegal immigrants, free pre-K babysitting, paid-family leave, free community college, a vast climate agenda with permanent green-energy subsidies, etc.
There are only three ways to end our runaway deficits: cut spending, raise taxes or allow deliberate inflation. Democrats naturally propose to pay for the additional $4.7 trillion by taxing the rich. Coincidentally, the entire wealth of all U.S. billionaires is $4.7 trillion. Even if the Democrats confiscated every penny, we would still be $28.5 trillion in debt. As Margaret Thatcher famously said, “the trouble with socialism is that you eventually run out of other people’s money.” The Soviet Union learned this the hard way. But combined with a dwindling workforce, the Democrats cannot tax their way out of our escalating debt, and there are simply not enough workers to pay for their insane spending.
Biden promises that his eight years of spending will be paid for with 15 years of tax increases. When was the last time you saw a federal project paid for as advertised? The Congressional Budget Office and the Office of Management and Budget never correctly predict the effect of spending on the U.S. national debt. The CBO underestimates the 2025 projected debt by 36 percent and the OMB by 27 percent. I plan on revisiting their predictions in four years.
That only leaves one solution for politicians: to deliberately inflate. Right on schedule, the U.S. inflation rate has increased from 1.4 percent when Biden took office to 5.4 percent today. And economists predict the inflation rate will continue to soar. How can it not? Meanwhile, liberals and journalists think this is a good thing. CNBC headlined it this way: “Inflation’s silver lining: higher salaries.”
Bernie Sanders actually won the 2020 presidential election. Bidenomics is Bernie socialism on steroids. The problem with our politicians passing these financially ruinous laws is that there is no personal accountability: they have no skin in the game. What we need is a contractual rider that says when the $4.1 trillion is not paid off in 15 years as promised, the personal wealth of every politician who votes for the plan will be confiscated and used to pay off the remaining debt.
Courtney served 20 years in nuclear engineering aboard submarines and 15 years as a graduate school instructor. He now spends his spare time chasing his grandchildren around the Palouse.