Will ‘Human Infrastructure’ Overheat the Economy?

Democrats defend their $3.5 trillion proposal against inflation concerns.

By and
20

Good afternoon and Happy Friday. Let’s get to the news.

You Get a Trillion! And You Get a Trillion!

On Tuesday, Democrats on the Senate Budget Committee reached a breakthrough on a $3.5 trillion proposal to address President Joe Biden’s agenda on health care, education, climate, and poverty programs. Biden ventured to Capitol Hill Wednesday to sell the plan to Senate Democrats.

Democrats and the White House see this package as a complement to the narrower, almost $1 trillion bipartisan infrastructure deal a coalition of moderate lawmakers struck recently to shore up the nation’s roads, bridges, airports, and broadband internet.

If both are passed—and at this point that remains a big if—the price tag would represent an astronomical amount of federal spending, as Republicans have been quick to point out. It also comes on the heels of $4 trillion of COVID-19 relief and stimulus enacted under both Biden and at the tail end of the Trump administration. 

Keep reading with a free account
Create a free Dispatch account to keep reading Get Started ALREADY HAVE AN ACCOUNT? SIGN IN
20
By and
Comments (20)
Join The Dispatch to participate in the comments.
 
  1. Avatar photo
    Tracie

    "Sixty-five percent of respondents think increased government spending has contributed to the phenomenon."

    Surprises me that % of respondents actually knows how inflation works, basically. Maybe that's the people who learned and retained some rudimentary econ education + all the people repeating headlines in right wing media.

    Collapse
  2. Avatar photo
    David Chen

    Boomer/GenXers: Where did you kids learn to live on credit cards?
    Me: Looks at them and wonders how that new Alzheimer drug is going.

    Collapse
  3. Randall Briggs

    Republicans have no moral ground from which to criticize Democrat spending. When they've had control of the checkbook, they've spent like drunken sailors on shore leave with somebody else's credit card.

    Collapse
  4. Avatar photo
    Adicesa14

    Did I just read we do not know, but maybe … maybe not. It was noted that raising the interest rate could be a factor in maintaining lower inflation. It seems to me, the interest rate has been (artificially?) kept low for years, which minimizes government debt service, and forces investment into the stock and commodity markets. This dual effect is a benefit for politicians and folks with enough capital to diversify in markets, but not those lower on the economic scale. So, those with less $’s can gain no growth, and the FED options are to raise rates or establish negative rates (like the Europeans) to maintain the economy. Central planning at its best!

    Certainly, keep spending.

    Collapse
  5. P Satter

    Living in a state that started providing free community college in 2015, there are many details to be managed and some unintended consequences in a program like that which likely not have been considered.
    Would a federal program supersede our current state program, and would it really be managed better at the federal level? Will universal pre-K also supersede Head Start which already provides preschool for underprivileged families? Doing all this simultaneously and randomly over the top of many already existing state programs currently addressing the issues seems a bit problematic.
    I would be happy if a much smaller amount of infrastructure money was targeted directly at addressing the root problems causing homeless people, not just temporary rental assistance. It's a new and rapidly increasing problem without good programs and serious policies to address it.

    Collapse
  6. Avatar photo
    Candwsmith

    After reading this article I checked my mail. In it was a postcard sent by a friend from Portland, OR…on May 6. Today is July 16. These guys can’t do the jobs they are supposed to do now. No More money for anything.

    Collapse
  7. Avatar photo
    Candwsmith

    After reading this article I checked my mail. In it was a postcard sent by a friend from Portland, OR…on May 6. Today is July 16. These guys can’t do the jobs they are supposed to do now. No More money for anything.

    Collapse
  8. Avatar photo
    Mike Shigley

    There seem to be three major issues: the effect of the amount of the appropriation on inflation; the level of taxation on certain types of income; and the appropriateness of the federal government paying for certain programs in the bill.

    Collapse
  9. Avatar photo
    Earl King

    Perhaps I am simply too old...I remember when Democrats proposed Billions in new spending. Any increase in capitol gains or attempts to tax the wealthy will fail to bring in that revenue. The wealthy have plenty of options. Income Tax is just that. Income. I remember when John Kerry ran for President. His wife is loaded and the majority of their income came from Municipal Bonds which are untaxed. As has been pointed out they can borrow against their fortune...and that is non taxable. Mess too much with Capital Gains taxes and you'll get less of them. In fact the quickest way to get less tax on something is to tax it.

    Collapse
  10. Avatar photo
    Justin Stapley

    Yes, the pandemic has been horrible. Yes, the economy was greatly impacted by it. But I've yet to see a salient argument that squares why exactly THIS crisis has required the most massive spending regime in American history, and why that still isn't enough.

    Collapse
Load More