Joe Biden has made the absurd claim that his $3.5 trillion socialist boondoggle is free:
That’s not what “costs zero dollars” means. https://t.co/ynULisP4CH
— Brad Polumbo 🇺🇸⚽️ 🏳️🌈 (@brad_polumbo) September 26, 2021
The idea that a $3.5 trillion (or whatever the true price tag turns out to be) boondoggle “costs zero dollars” is ridiculous. It costs $3.5 trillion, and the cost has to be paid for through a combination of increased taxes and increased debt, to be serviced by future taxpayers. In neither case is the spending “free.”
In fact, the taxes the administration proposes won’t pay for the boondoggle, and it will, if passed, increase the national debt substantially. But more insidious is the idea that if the increased taxes are levied on corporations and high-income taxpayers, the money is somehow free. Economists have studied the question of who pays corporate income taxes. The answer is, a combination of the company’s customers in the form of higher prices, its employees, in the form of lower wages, and shareholders, in the form of lower returns. This is not “free money.” And when you tax high-income taxpayers more, they invest less, with consequences that hurt all of us.
I see the Biden administration’s “costless $3.5 trillion” insanity as a manifestation of the credibility that the Democratic Party is now giving to Modern Monetary Theory–or, as some say, Magic Money Tree–which has been thoroughly discredited.