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Bill Hagerty: Democrats' spending spree would be economic disaster

This post was originally published on this site

Democrats’ reckless $3.5 trillion tax-and-spend spree will be an unprecedented disaster for hardworking families.

As the Senate continues its debate around a $1 trillion infrastructure proposal, we know what is just around the corner: It’s a completely partisan 50-50 vote with Vice President Kamala Harris as tiebreaker, and we can expect everything Democrats took out of the bipartisan deal that they couldn’t get agreement on. It will fundamentally reorient our nation toward socialism. What’s worse — it’s going to be done without a mandate from Americans; rather, it’ll be rammed through on a wholly partisan basis by one of the narrowest congressional majorities in U.S. history.

It must be stopped.

In the short term, the Democrats’ reckless $3.5 trillion tax-and-spend blowout will dramatically increase the size and scope of the federal government. And it will likely add further fuel to already rampant inflation as our economy continues its record recovery from the pandemic that began under the Trump administration.

Over the longer term, the Democrats’ plan will institute policies that further dependency on the federal government, slow job creation and productivity, harm small businesses and workers, and freeze the investment that is critical to maintaining and creating jobs and to increasing real wages. The Democrats’ plan will burden our children and grandchildren with even more debt, with some groups estimating the actual cost to be north of $5 trillion.

When the Democrats throw around trillions of dollars like Monopoly money, the inflation it fuels acts as an insidious tax on hardworking, middle-class Americans’ paychecks and savings. We saw a 12% annualized inflation jump in consumer prices from May to June and the highest year-over-year jumps in decades across numerous critical inflation metrics.

Tennesseans and Americans across the country are feeling the pain of paying far more of their incomes on everyday items and housing expenses and receiving far less. Americans’ average weekly earnings adjusted for inflation have fallen 2.5% since January. Seniors are among those most affected by such inflation as the price of goods and cost of living continues to soar — rapidly eroding the value of their cash savings.

Having spent my life in business, I know that there is a name for a CEO who orders undisciplined budgeting and massive amounts of spending: former CEO.

Our economy has recovered at record speed since the lockdowns of 2020 thanks to Operation Warp Speed’s vaccine success and the solid foundation laid by the pro-growth, pro-worker economic policies of the Trump administration. The Biden team was handed successful vaccines and an economy far along the path to recovery with record 34% gross domestic product growth in the third quarter of 2020.

By January, our unemployment rate had already fallen back to 6.3% from a pandemic high of 14.8%. The pandemic-driven recession lasted just two months last year, the shortest in U.S. history. By the second quarter of this year, our GDP level surpassed where it was before the pandemic. The Federal Reserve is forecasting 7% economic growth for 2021.

Yet instead of continuing those proven pro-growth policies, the Democrats are hell-bent on “transforming” our economy and trying to reorient the U.S. toward failed socialist policies. They are attempting to shield their agenda by messaging that current economic conditions justify spending another 20% of GDP. The same charade was used for their $1.9 trillion — or roughly 10% of GDP — partisan spending spree in March, and people all across America are experiencing its inflationary effects.

This was done without a single Republican vote — and we are looking for a replay, albeit on a much larger scale, in a matter of days. Damn the torpedoes; Democrats are pressing forward with a partisan spending spree as inflation is skyrocketing. In December, the Federal Reserve was predicting 1.8% inflation for 2021. By June, it was predicting 3.4%. Americans can see where this is headed. We saw it in the Carter administration, and it wasn’t pretty.

Making matters worse, Democrats are imposing policies that actually cut against economic productivity — giving away unemployment incentives, raising taxes on job creators, actualizing the Green New Deal, undercutting American workers’ wages with open borders, throwing away our energy independence, raising death taxes, freezing American investment, and killing capital formation.

Sadly, this isn’t a pig-in-a-python moment, and the harmful effects of this spending spree will be long lasting. America is nearly $30 trillion in debt. We need to stop endangering our children’s and grandchildren’s future and rein in this partisan, socialist spending before it is too late.

Bill Hagerty represents Tennessee in the U.S. Senate. This piece originally ran in the Washington Examiner.