What is in the Build Back Better Plan?
I don’t know, and can’t find out. It is commonly referred to as the human infrastructure bill, and there is a great deal of support for it. It appears to offer free two-year college degrees. That sounds wonderful, until one stops to consider three things:
- First, if it is a two-year extension of free public schooling, what differentiates it from simply adding Grades 13 and 14 to high school?
- Secondly, College for Everybody misses the point of having a college degree. In most workplaces, few people need a college degree to do their jobs. The observation that people with college degrees make more money is correct, but misses the reason. It is not that if we confer college degrees on everyone the need for the college degrees will increase and the money to pay degree holders will magically be available. The first step is to create more jobs that need college degrees.
- This is described as free, but carries a price tag of $108B. That level of cognitive dissonance is beyond my ability to comprehend.
It also includes $80B for added funding of Pell Grants. That’s likewise free. It is needed because of inflation. The inflation in cost of college has risen more than twice the rate of general inflation in the last thirty years; every time more money is made available for students to attend college, costs increase. We have created the problem we’re using free money to address, which will only exacerbate the problems.
There’s $450B to support parents’ outsourcing child care to someone else. This unsurprisingly free benefit continues the assault on the nuclear family and increased dependence on government.
There is a provision for banks to report all activities involving more than $600. There is already significant regulation of banking institutions to control money laundering and support of terrorism. No one has adequately explained why it is necessary for the Federal Government to know the amount and timing of the typical citizen’s mortgage payment, or how purchasing a new sofa is indicative of terrorism. In fact, regulatory compliance costs for cash transactions of $10K or larger are already a high barrier to entry into the banking industry, in part because they are regressive. The less money a bank has, the higher the costs of compliance as a percentage of expenditures.
One source of new revenue is supposed to be raising rates on profitable companies currently paying no taxes. This does not pass the laugh test. If a company has profits but pays no taxes on them, it is because the tax code allows the company deductions not applicable to others. One can increase tax rates to 100% or 1,000%, and it will have no effect unless the deductions are addressed.
It includes an unspecified amount – actually, none, since it’s free!!! – to expand Medicare benefits to include universal free vision, dental and hearing services. The benefits are already available through Medicare Advantage, under which insurance companies accept a patient’s Medicare Benefit and in turn offers to take care of the patient, usually through a provider network. Other television advertisements encourage people to get all of the benefits they are “entitled to”[sic], and actually make money by getting more “free” benefits.
This rage for free stuff has infected our entire culture. Everyone wants as much “free stuff” as he or she can get. Politicians this know this, but if they say it aloud they will be severely punished by the ruling elite authoritarians, who have taken hypocrisy and virtue signaling to heretofore unseen heights. Cost shifting is not cost saving. That is so fundamental to an understanding of how capitalism functions that if one does not grasp this concept, one should probably never make economic decisions.
I want my Obama phone! Just use the money from his stash! We heard those cries and our Congress is set to deliver. As we watch we are seeing the MMT at work and it doesn't seem to deliver. Wonder what the Fed can do to quell this transitory inflation? Wages must rise as people decide employers must pay more for the worker's services, but inflation is rising faster than wages making a joke out of the increase. And those increased wages can't be rolled back negating the notion of transitory inflation.
For our new greener economy we must reduce fossil fuels use, so increases in fuel costs are a good thing, right? Except that fuel or energy underlies the economy itself. Those goods get produced using energy, transported using energy. By decreasing fuel supplies we increase the price of fuel which in turn increases all prices, independent of labor. We can arrive at a greener economy and were on a path that some demanded to be increased at the public's expense.
One wonders if the Congress has any idea about the whole of America. Their self-dealing seems way out of touch with reality. Rising interest rates back into realistic costs of capital will make the Federal budget outlays balloon and rather than increases in entitlements, we face the need for reductions to allow for those higher interest payments. Taxes on all must increase, do they not understand?