Tim Nerenz:

Some people seem to be having a hard time connecting the dots between excessive government spending and inflation but the relationship is quite simple.
Inflation is too many dollars chasing too few goods and services (high school econ) and when the government spends more than it takes in, the Federal Reserve “prints” more money to cover the deficit. How many is too many? That is a function of the supply side – GDP.
In 2018 the government taxed 16% of GDP and spent 19%.
In 2019 the government taxed 17% of GDP and spent 21%.
In 2020 the government taxed 17% of GDP and spent 32% – the one-off covid emergency stimulus.
In 2021 the government taxed 18% of GDP and spent 31%. – so much for one-off; it’s the new baseline.
They are spending 53% too many dollars, while at the same time pursuing economic policies that constrain production of goods and services – our store shelves did not empty themselves.
Government spending was $4.4 trillion in 2019 and $6.8 trillion in 2021. Combined 2018 and 2019 spending was $8.4 trillion, and combined 2020 and 2021 spending jumped to $13.5 trillion.
That is $5 trillion (too many dollars) dumped onto a $20 trillion economy (not enough goods and services).
Historic first-ever Treasury Secretary Yellen said recently that the additional government spending was not inflationary. I don’t know which is worse, that she knows better and is lying or doesn’t know better and is still Treasury Secretary.
The U.S. has climbed to the #3 spot in the world in debt to GDP ratio (a bad thing); worse than Lebanon and closing in on Greece, the economic dumpster fire of Europe.

There is a way out, but Congress has to pass it and the idiot at 1600 Pennsylvania Ave. N.W. has to sign it.

Daniel J. Mitchell:

Based on research from the Congressional Budget Office, I’ve shared estimates of the potential economic damage from the fiscal plan Joe Biden unveiled last year.

But now he has a new budget. So what if we simply focus on the tax portion of that plan and ignore all the new spending?

The Tax Foundation has crunched the numbers from Biden’s tax agenda and has published some very sobering numbers about this latest version of the President’s class-warfare proposals.

What caught my attention was this chart showing the United States (light-blue bars) already is out of whack with major competitors and trading partners (green bars) – and Joe Biden wants to make a bad situation much worse (red bars).

And when I write “out of whack,” that’s not an idle statement.

it turns out that the United States would have the highest income tax rates in the world.

Higher than Greece. Higher than France. Higher than Italy. Here are some of the grim details.

…the tax increases in the Build Back Better Act (BBBA)…would raise revenues by $4 trillion on a gross basis over the next decade. The Biden tax increases in the budget and BBBA would come at the cost of economic growth, harming investment incentives and productive capacity… The budget proposes several new tax increases on high-income individuals and businesses, which combined with the BBBA would give the U.S. the highest top tax rates on individual and corporate income in the developed world… Taxing capital gains at ordinary income tax rates would bring the combined top marginal rate in the U.S. to 48.9 percent, up from 29.2 percent under current law and well-above the OECD average of 18.9 percent. …Raising the corporate income tax rate to 28 percent would once again bring the U.S. near the top of the OECD at a combined rate of 32.3 percent, versus 25.8 percent under current law and an OECD average (excluding the U.S.) of 22.8 percent.

The good news, relatively speaking, is that the United States would not have the highest aggregate tax burden (taxes as a share of economic output).

And the U.S. would not have the highest tax burden on consumption (no value-added tax in America, fortunately).

But with all of Biden’s new spending (along with the built-in expansions of government that already have been legislated), it may just be a matter of time before the U.S. copies those features of Europe’s stagnant welfare states.

The net result is lower living standards for the American people. The only open question is how far we drop.

Anyone who votes for any Democrat deserves everything bad that happens to them. Unfortunately the rest of us do not but will suffer as we are now.