Home
/
RELIGION & LIBERTY ONLINE
/
Biden’s ‘stimulus’ for a growing economy is all about central control
Biden’s ‘stimulus’ for a growing economy is all about central control
Apr 3, 2025 3:23 PM

President Biden wants to pump nearly $2 trillion more into the U.S. economy under the guise of “economic stimulus.” But the country’s economy has already been growing for months, proving that American politicians have adopted the term “stimulus” for a new regime of spending programs that drive up debt needlessly, taking a page out of Xi Jinping playbook.

Read More…

Proposals for “economic stimulus”, the use of monetary or fiscal policy to stimulate the economy, have e a permanent fixture of our politics.

President Joe Biden recently proposed $1.8 trillion dollars in additional “economic stimulus” in the form of the American Families Plan. This represents an extension of the unprecedented wave of government spending and proposed spending which began last year in March by the Trump administration with the CARES Act ($2.2 trillion) and continued this March with the Biden administration’s American Rescue Plan ($1.9 trillion). Along with the proposed American Jobs Plan ($2.2 trillion) the grand total of this spending and proposed spending is represents over a third of the size of the entire economy of the United States.

As originally envisioned by the economist John Maynard Keynes the logic of “stimulus” was for government to provoke a “response” in the private sector through fiscal and monetary policy that would raise aggregate demand for all goods and services during recessions where there was a danger that the economy would not self-correct. Keynes posited that if not for stimulus spending on the part of government, high unemployment, decreased productivity, and patterns of lower growth may otherwise persist.

This was the logic behind the Economic Stimulus Act of 2008 ($152 billion), Emergency Economic Stabilization Act of 2008 ($700 billion), and the American Recovery and Reinvestment Act of 2009 ($831 billion) in the wake of the financial crisis of 2007-2008.

What is curious about this latest round of stimulus initiatives, aside from their enormous size, is that fact that they do not fit the traditional countercyclical model of “economic stimulus.” The International Monetary Fund currently projects economic growth in the United States to be 5.1% in 2021 and 2.5% in 2022. The United States is also currently facing a labor shortage, modity prices, and a bull market in stocks.

Our political class, on a bipartisan basis, has adapted the Keynesian language of stimulus for a pattern of an easy and unjust fiscal policy and unsustainable deficit spending detached from our actual economic circumstances. This rhetorical sleight of hand was made transparent by Biden’s proposed increase in the top rate of the capital gains tax from 20% to 39.6%. Such a policy disincentives private-sector investment and would raise significantly less revenue than promised. What then is the actual motivation behind such proposals if not “stimulus”?

Niall Ferguson, Milbank Family Senior Fellow at the Hoover Institution, makes pelling case in an essay in the latest issue of The Spectator, “The China model: why is the West imitating Beijing,” that what is actually being pursued is a policy of central planning modeled on the supposed success of the Chinese model:

In late March, for example, Joe Biden proposed to Boris Johnson a western version of China’s One Belt One Road initiative. ‘I suggested we should have, essentially, a similar initiative, pulling from the democratic states, helping munities around the world that, in fact, need help,’ Biden told reporters after the call. Conventionally, ‘OBOR’ (also known as the Belt and Road Initiative) is described as a vast infrastructure investment programme, though a vast propaganda and dodgy loan programme might be more accurate.

No one has had quite the temerity to suggest that Biden’s domestic spending programme is also somewhat Chinese in conception as well as in scale. It began with the $1.9 trillion Covid relief bill (the American Rescue Plan). Then came the $2.2 trillion infrastructure bill (the American Jobs Plan). And just last week we were presented with the $1.8 trillion American Families Plan. Plan, plan, plan — if only J.K. Galbraith were still here to see his theory vindicated.

bined price tag for all these es to just under $6 trillion, equivalent to more than a quarter of US economic output (though the spending on both the Jobs and Families plans is spread over multiple years). Republicans are not well positioned to criticise, having inadvertently legitimised both universal basic e and Modern Monetary Theory with the emergency measures they passed last year. It has been left to former Democratic officials, notably Larry Summers and Steve Rattner, to express disquiet at the scale of the fiscal expansion, which not only risks overheating an already recovering economy, but also permanently increases the role of federal government in the economy.

While China’s rapid economic development over the past thirty years has been impressive it was fueled by market liberalization away from state ownership and central planning. Recent trends in China under the leadership of Xi Jinping have increased control over both state-owned and private enterprise leading to a fiscal situation that former finance minister Lou Jiwei ha characterized as “extremely severe with risks and challenges.”

Ferguson rightly warns, “It is one thing pete with China. I firmly believe we need to do that in every domain, from artificial intelligence to Covid vaccines. But the minute we start copying China, we are on the path to perdition.”

The first step to counter movements toward more centralization and control over the economy is to call those measures by their name and reject the framing of these issues as “stimulus.” Jesus admonishes us that, “All you need to say is simply ‘Yes’ or ‘No’; anything es from the evil one.” (Matt 5:37)

Serious issues such as government spending must be debated openly and honestly. That can’t happen if our leadership misleads the public by obfuscating the true nature of their proposals.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
‘The Great Awokening’: The threat of America’s new political religions
The decline of religion in America is real—that is, depending on how you define “religion.” Weekly church attendance is in decline, as is self-identification with a formal religion, denomination, or belief system. Meanwhile, the rise of the “nones” seems increasingly steady in speed, replacing religious-cultural standards and norms of old with a modern menu of “personal spiritualties” based on any number of humanistic priorities—from humanitarianism to political activism to self-helpism to the garden-variety exultations of hedonism, materialism, fortability. But not...
FAQ: What happens in a confidence vote?
Prime Minister Theresa May will face a confidence vote today between 6 and 8 p.m. local time (1 to 3 p.m. Eastern time). The result is expected no later than 9 p.m. London time. What is a confidence vote, how does it work, and what happens afterwards? What is a confidence vote? Under the UK’s parliamentary system, the ruling party’s leader es prime minister. If the leader loses his or her support, Conservative members of Parliament vote to express their...
How taxing work affects employment
Note: This is post #104 in a weekly video series on basic economics. An important factor influencing an individual’s decision whether to keep working as they get older is their government’s tax and retirement policies. Taxes on earnings plus penalties, like losing retirement benefits, gives us an implicit tax rate, explains economist Alex Tabarrok. Countries with higher implicit tax rates for older workers see a much lower labor force participation rate for people considered retirement age. (If you find the...
An Aleksandr Solzhenitsyn centenary
On this day in 1918, Russian writer and historian Aleksandr Solzhenitsyn was born inKislovodsk, Russia, to Taisia and Isaaki Solzhenitsyn, parents of peasant stock who had received a university education. When he died in 2008 near Moscow, Solzhenitsyn had published his monumental Gulag Archipelago and other literary and historical works — which continue to appear in English for the first time. Over the next few weeks, we’ll be posting Acton archival material and new writings and media on the blog...
Samuel Gregg: Paris is burning
“Since 1789, we’ve all had good reason to worry whenever riots break out in Paris,” says Acton research director Samuel Gregg. “Whether it’s 1848 or 1968, social upheaval in France rarely ends well.” The sheer fury vented throughout France by thegilets jaunesmovement over the past three weeks has highlighted specific grievances animating many French citizens. The truth, however, is that the burning cars, blocked highways, vandalism, lawlessness, and running battles between rioters and police in the streets are symptomatic of...
FAQ: Who is Annegret Kramp-Karrenbauer, Angela Merkel’s successor in Germany?
On Friday, December 7, Angela Merkel’s ruling Christian Democrats elected Annegret Kramp-Karrenbauer as party leader. “AKK,” as she is known, is liberal on economic issues, conservative on social issues, and once called for the Roman Catholic Church to ordain a “quota” of female clerics. Here are the facts you need to know. What happened at Friday’s CDU party leadership vote? Annegret Kramp-Karrenbauer narrowly won the delegates’ vote to e party leader of the Christian Democratic Union (CDU) in a narrow,...
5 Facts about international human rights
Today is the 70th anniversary of the Universal Declaration of Human Rights, a milestone document in the history of human rights. In honor of the observance, here are five facts you should know about international human rights: 1. Prior to the 1940s there were a number of documents, such as the the British Magna Carta and the U.S. Bill of Rights, that advanced the recognition of human rights. But few documents were recognized internationally as applying to all people at...
From inmates to entrepreneurs: How work transforms the soul and spirit
James, Gene and Dexter at Refoundry With the promising (but now passing) prospect of a new wave of criminal justice reform circulating around Capitol Hill, discussions have reemerged as to how we might improve the justice system to better help and support our prison population (current and former) in rehabilitating their lives and avoiding the status quo of systematic detours. Meanwhile, at a cultural and institutional level, we continue to new ways of helping individuals better recognize their gifts and...
5 Facts about Aleksandr Solzhenitsyn
Yesterday marked the 100th anniversary of the birth of Aleksandr Solzhenitsyn. The celebrated novelist and dissident is considered by many to be a key figure in the demise munism and the collapse of the Soviet Union. As Daniel J. Mahoney says, “Solzhenitsyn embodied, in thought as well as deed, the two great moral wellsprings of European civilization: humility and magnanimity, humble deference to an ‘order of things’ and the spirited defense of human liberty and dignity.” In honor of his...
A Hanukkah meditation on Maimonides … and venture capitalism
If the average person had to describe a capitalist, he might name “Dickens’ unredeemed Scrooge, or Gordon (‘Greed is good!’) Gecko from the movieWallStreet.” However, the real patron saint of venture capitalism may well be the great Jewish theologian and philosopher Moses Maimonides,writes Laurie Morrow, Ph.D., in a Hanukkah meditationfor Acton’sReligion & Liberty Transatlanticwebsite. “Rambam” believed that the highest form of charity is enabling someone to start a business or take other means so that he will no longer have...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved