A case in point: following months of massive government spending, businesses across the country are struggling to stay open, either because they can’t find enough workers or because they can’t source the inputs they need to meet customer demand. It’s great that they have willing customers flush with taxpayer cash from government largesse, but that doesn’t mean much if they aren’t able to supply the in-demand goods or services.
So, what sense does it make for the Biden administration to focus most of its energies on trying to salvage legislation that calls for trillions and trillions of dollars in new government spending of taxpayer money, which it plans to finance with historic tax increases? That won’t solve the problems afflicting the American economy; it will exacerbate them.
In addition to more than $1 trillion in so-called “hard” infrastructure spending, the Democrats want to spend trillions more on green energy subsidies for people who choose not to work, all at a time when there are millions of unfilled job openings and shortages of basic inputs such as lumber and microchips. Stimulating the demand side of the economic equation without addressing deficiencies on the supply side will only drive prices up while keeping a tight leash on potential growth—in a word, stagflation.
You can’t “Build Back Better” without either workers or supplies. You would think that was fairly obvious, but apparently it is not.