The Press-Dispatch
Issue link: https://www.ifoldsflip.com/i/1392557
B-4 Wednesday, July 14, 2021 The Press-Dispatch OPINION Submit Letters to the Editor: Letters must be signed and received by noon on Mondays. Email: editor@pressdispatch.net or bring in a hard copy: 820 E. Poplar Street, Petersburg The costs of Biden's big government It is one of the unfortunate iro- nies coming out of the Biden admin- istration that, with all the obsession about so-called equity, policies they are putting forth will only hurt the very low-income Americans they pre- tend to want to help. The Biden administration is grow- ing government at a record pace. If what they want is opportunity for every American, government policy should aim to encourage economic growth. Bigger, more intrusive gov- ernment achieves the opposite. It sti- fles economic growth. The Biden administration submit- ted its first 10 -year budget to Con- gress last month. The budget projects average annu- al economic growth for 2023 through 2031, after they're done with all the stimulus spending in 2021-22, of 1.9 percent. What does 1.9 percent growth mean? Economist John Cochrane, of Stanford University's Hoover Insti- tution, notes that from 1950 to 2000, the U.S. economy grew at 3.5 percent per year. Average real income over that period grew from $16,000 per person to $50,000. Suppose instead of 3.5 percent, growth over that period of time was two percent, asks Cochrane. With average growth of two per- cent instead of 3.5 percent, a $16,000 income would have grown over the 50 years to $23,000 rather than $50,000. In recent years, since 2000, aver- age growth has been more sclerotic, in the range of two percent. What's the problem? Too much growth of government, says Co- chrane. There are different indices that measure government intrusiveness. Cochrane points to the Doing Busi- ness report from the World Bank, which measures the difficulty in starting and running a business. Other more general measures of economic freedom — one from the Fraser Institute in Vancouver, Cana- da, another from the Heritage Foun- dation in Washington, D.C. — look at size of government, regulation and taxation. They all point in the same direc- tion. More government means lower incomes and slower growth. Per Glenn Hubbard, who headed the Council of Economic Advisers under President George W. Bush, the average percent of the U.S. econ- omy that government was taking in those 50 years after World War II, when growth was averaging 3.5 per- cent, was around 20 percent. The average percent of the econ- omy that government will take over the next 10 years, per Biden's bud- get, is 24.5 percent. At least Biden's economists are being honest to proj- ect anemic economic growth that will accompany this huge growth in government. One of the major spending initia- tives in Biden's plans is what they are calling the American Families Plan, with a price tag of $1.8 trillion. At a time when we have historic drops in our fertility rates and mar- riage rates, somehow the Biden ad- ministration thinks, contrary to ex- perience, massive new government spending and entitlement programs will be a boost to the American fam- ily. Hoover Institution's John Cogan and Daniel Heil call this massive ex- pansion of government entitlements "the largest expansion since Lyndon B. Johnson's Great Society." "For the first time in U.S. history," they note, "except possibly for the pandemic years 2020 and 2021, for which we don't yet have data — more than half of working-age households would be on the entitlement rolls." With all our division and disagree- ments today, there is no disagree- ment about the shame that the vile in- stitution of slavery was once present and legal in America. We all agree it is a blot. We all also agree that racism is de- plorable. But the reason slavery and racism are terrible things is that every hu- man being must live with dignity and in freedom. How can we arrive to the conclu- sion that the remedy and antidote to slavery and racism is putting all Americans on the government plan- Big business loves big government Politicians say they pass laws to "protect Americans from big busi- ness." People like hearing that. Many don't like big business. Unfortunately, most people don't realize that those laws often help big business while hurting consumers. "Big business and big government are not enemies like a lot of people think they are," says American En- terprise Institute fellow Tim Carney in my new video. "When government gets bigger, whether it's through spending or taxes or regulation, the big guys, big business benefits." Consider the $15 minimum wage. People think of that law as pro-work- er. But big companies like Walmart, Costco and Amazon lobby "in favor" of it. Why? Because big business can afford robots. Their competitors often can- not. "Capitalism is a cutthroat thing," says Carney. "But this isn't capital- ism. When you turn to government to regulate your competitors out of business, that's where we need to say this is wrong." "Maybe you're too cynical," I sug- gest. "Maybe (Amazon boss) Bezos really just does want people to be paid more." "If Jeff Bezos wants people to be paid more," Carney responds, "he can pay people more! But what Bezos is trying to do is outlaw competing business practices." He's not alone. When the big toymaker Mattel was caught selling toys that con- tained lead, its lobbyists got Con- gress to force all toymakers to do I'm no lawyer, that's for sure, and so I don't have expertise on the intri- cacies of the law, but I am angry as a hornet by the recent Supreme Court decision upholding the federal "evic- tion moratorium." On Tuesday, the high court in a di- vided 5 -4 opinion will allow the mor- atorium to continue until August. This moratorium allows people to stay in their apartments and other rental units and not pay the rent they agreed to. This policy started more than a year ago when the pandemic was in full force. But the policy is unconsti- tutional — an affront to basic prop- erty rights and the sanctity of con- tracts. It should have never been al- lowed and implemented in the first place and certainly has no place in the law now that COVID-19 is over and there are 9.1 million open jobs in the country. Since when can the government tell a private enterprise that it can't collect its rightful payments from its customers? What's next? Poli- ticians promising to end hunger in America by allowing poor people to go into a grocery store or 7-Eleven and taking whatever food they want without paying? This law puts all the cost of achieving a social objective — not having people lose the roof over their heads — during tough times on businesses and individuals. Amazing how humanitarian the political class is with other people's money. This is also a case where the left's do-gooder edicts defy basic com- mon sense. I am friends with sever- al owners of apartment buildings and rental units. Guess what happened the day after these lo- cal, state and feder- al waivers on pay- ing rent are imple- mented? Over half the tenants and, in some cases, as many as 90 per - cent of the occu- pants stopped pay- ing their rent. The latest national estimate is that landlords are losing about $13 billion A MONTH in rental payments. But as one apartment owner tells me: "If I can't collect the rental payments, I can't pay the bank the mortgage on the property. I may have to default on the loan." The latest estimates from CNBC are that more than 11 million Americans have stopped pay- ing their rent on time — or have just stopped paying entirely. What is especially galling about this story is that we are creating another new de facto federal enti- tlement: free rent. Now apartment dwellers are indignant when the landlords try to get their monthly payments. Many hang signs outside their windows that say, "No justice, no rent" — as if the apartment own- ers are responsible for the social ills in our country. The signs used to say, "No jobs, no rent," but no one is sympathetic to that view now that jobs are aplen- ty from coast to coast. Speaking of justice: How do edicts like this help in the left's cru- sade of increasing affordable housing? If apartment and rental housing owners can't legally collect rental pay- ments, they aren't going to build more units. They will build less. In the court case, the los- ing plaintiffs argued — persuasively — that "Con- gress never gave the CDC the staggering amount of power it now claims." Who elected the bu- reaucrats at the CDC? These are the same people who were caught asleep at the switch when the pan- demic hit these shores. They were too busy studying gun violence and LGBTQ issues. These kinds of dic- tates should be rarely imposed, and when they are, they should come from Congress, not from a federal agency that is completely separated from the voters and thus the will of the people. The government's argument was that the CDC believes the regu- lations are necessary to "prevent the introduction, transmission, or spread of communicable diseases." Never mind that the pandemic is over and that anyone who wants to be pro- tected against COVID-19 has ready access to the vaccines. This country really is headed down the road of tyranny when the government tells our citizens they don't have to pay their bills. For three consecutive years (2018 - 2020), the Medicare trustees have formally warned that the program has become excessively dependent on general revenue transfers from the Treasury rather than its dedicat- ed revenue streams, such as payroll taxes and premiums. When this happens in just two con- secutive years, the president and Con- gress are required—by law—to act. Specifically, the president must pres- ent, within 15 days of submitting his annual budget, a legislative proposal for putting Medicare's fiscal house in order. And Congress must then con- sider the legislation on an expedited basis. Yet, despite the repeated warnings and their statutory obligations, nei- ther the White House nor Congress has moved to slow the cost increase and decrease Medicare's growing de- pendence on general revenue financ- ing. Continued failure to act puts the stability of the program at risk, accel- erating the program's spending, driv- ing up Medicare beneficiaries' premi- ums as well as imposing ever larger burdens on the taxpayers. Get exclusive insider information from Heritage experts delivered straight to your inbox each week. Subscribe to The Agenda >> It's important to remember that Medicare was created as a traditional social insurance program, not a wel- fare program. The original arrange- ment was that beneficiaries would fi- nance the Part A program through payroll taxes and pay premiums to cover half of Part B program costs. In 1970, when the program had been just four years in operation, general revenues accounted for just 25 per- cent of Medicare's total income; the rest was funded by payroll taxes (62 percent) and beneficiary premiums (14 percent). That balanced mix no longer ex- ists. General revenues have shoul- dered the largest share of Medicare financing since 2009. By 2016, gen- eral revenues passed the 45 percent mark—the level deemed sufficient- ly "excessive" to warrant the Medi- care trustees to is- sue an official "fund- ing warning." Clear- ly, what was initially designed as a "so- cial insurance" pro- gram is morphing into yet another fed- eral income transfer program. Its costs are grow- ing faster than na- tional health spend- ing, private insurance and the nation- al economy. Through general reve- nues, taxpayers now provide about three out of every four premium dol- lars for Part B (physician services) and Part D (prescription drug) ben- efits. In raw numbers, the taxpayers' general revenue transfer to Medi- care will nearly double in the com- ing decade, rising from $ 356.2 bil- lion to $705.3 billion. Within the next 20 years, Medicare would con- sume about 26 percent of all federal tax revenues, dramatically reducing resources available for other federal programs—from defense to transpor- tation to education and welfare. Medicare, along with other entitle- ment spending, is a leading driver of federal deficits and debt. The latter now over $28 trillion—an alarming figure that merits a formal warning of its own. But that conventional debt figure is dwarfed by Medicare's unfunded ob- ligations, the dollar value of the ben- efits Medicare has promised to deliv- er that are not paid for with dedicat- ed revenues. The total unfunded ob- ligations for Medicare now amount to $45.7 trillion—about $140,000 for ev- ery man, woman and child in the U.S. Because this debt is accumulating over a long period (75 years), some try to dismiss it as having no pressing relevance. But for current and future taxpayers, this increasing debt is re- al, relevant and inescapable. Financ- ing it, say the trustees, "... will require general fund transfers of this amount, and these transfers represent a formal budget requirement." Rising Medicare costs ar- en't just a fiscal problem. They are hard on Medicare benefi- ciaries, too. In 2020 alone, Part B and D premiums and cost-sharing rose to about 24 percent of the "average" So- cial Security benefit. As the trustees reported, the rap- id growth of program costs "places steadily increasing demands on beneficiaries and tax- payers." Despite these growing fiscal chal- lenges, President Biden has ignored the Medicare trustees' warnings and failed to submit a legislative proposal to shore up the program. Instead, he has proposed expanding Medicare by lowering the age of eligibility from 65 to 60. This would only strain the pro- gram further. According to one repu- table estimate, it could cost between $40 billion and $100 billion annually. Biden's proposed financing? Gen- eral revenues. Soon, the Medicare trustees will once again release a new report on the financial condition of the Medi- care program. It is possible that they may reissue a Medicare funding warning. For Washington's political class, it will be another test. Most will fail it. If they are not going to abide by the law they enacted, they should at least repeal it. That would be better than ignoring it and making a mockery of the rule of law. There is, of course, another op- tion. Some brave Capitol Hill souls may take the law and its intent seri- ously, assess what is right for future taxpayers and beneficiaries alike, and behave like statesmen. Robert E. Moffit, Senior Fellow of Health Policy Studies, specializes in health care and entitlement programs, especially Medicare. Race for the Cure By Star Parker Give Me a Break John Stossel Points to Ponder By Rev. Curtis Bond Continued on page 5 Continued on page PB Eye on the Economy By Stephen Moore Whatever happened to property rights? Heritage Viewpoint By Robert E. Moffit, Ph.D. Biden is ignoring the Medicare trustees' warnings No to 'defunding of the police' As I write this, the Wabash Val- ley is reeling from shock over the reported 'ambushed murder' of a Terre Haute police officer. The de- tails surrounding the shooting are bi- zarre. The assailant drove his pick- up truck up to the FBI office in Terre Haute, early Wednesday afternoon. He got out of his truck and threw a Molotov cocktail toward the office. At that moment, Detective Greg Fer- ency of the Terre Haute Police De- partment was exiting the building and encountered the assailant. The assailant shot at the officer with a large caliber handgun, fatally wound- ing him. An FBI agent inside heard the commotion and ran outside, engag- ing the suspect and wounding him; escaping in his pickup truck, the sus- pect drove himself to an area hospi- tal where he was apprehended. The FBI has portrayed the shooting as a 'premeditated ambush murder.' The motive behind the assault on the fed- eral building and police officer is un- known. What is known is the suspect went there intending to do harm. The anarchy that is sweeping many big cities in America is making its way into the heartland of America. Many social analysts and newspa- per columnists are pointing to the movement to 'defund the police' as one catalyst behind the rise in vio- lence against police. The cry to de- fund the police took on a life of its own after several recent high-pro- file police shootings of blacks and the growing 'Black Lives Matter' movement. Several major metropol- itan cities have defunded their police departments only to experience sky- rocketing crime rates. A citizen of San Francisco recent- ly posted on Twitter, "every single one of my friends right now is con- sidering leaving San Francisco due to crime fears. My friends are scared for their children, and their husbands are scared for their wives." An offi- cial in the DA's office responded that Continued on page 5 Continued on page 5 Court