More Speed Less Haste

If you read between the lines of the editors’ of the Washington Post’s latest offering you may detect a concern that the House Democrats may scuttle the “infrastructure bill”. They rather clearly blame the moderate Democrats:

Lawmakers are supposed to vote on a budget resolution that would clear the way for the Democrats to advance a big “reconciliation” bill, which would enable them to pass a range of taxing and spending policy through the Senate with only Democratic votes. But nine centrist House Democrats, enough to deny a House majority, insist that they will not vote for the budget resolution until the House passes a different bill, the $1 trillion infrastructure package the Senate approved earlier this month.

Doesn’t equal if not more blame belong to the progressives who insist on an additional $3.5 trillion (or $4.5 trillion or $5.5 trillion depending on whom you read) to gain their votes for the already bloated $1.5 trillion “infrastructure bill”?

They conclude:

The reconciliation bill promises to slash drastically child poverty through an enhanced child tax credit, cut the ranks of the working poor with a boosted earned-income tax credit, enshrine in law an ambitious federal climate policy and promote many other worthy reforms. But is pumping up Medicare, including for many wealthy seniors, more important than shoring up Obamacare or ensuring that low-income people caught in Medicaid’s coverage gap have basic health-care access? Does the nation need free community college when it can instead enhance Pell Grants for the neediest? The reconciliation bill’s answer to these questions is: Do it all. And to pay for it, the reconciliation bill’s architects suggest some significant new revenue sources, such as higher corporate taxes, and some squishy pay-fors, such as projected economic growth.

Democratic infighting must not ruin what is a rare opportunity in Washington, a moment when substantial reform is possible. Instead of issuing ultimatums, the party that narrowly controls the House should get to work.

The reason I use quotation marks around “infrastructure bill” is that so little of it is devoted to infrastructure. Again, that depends on whom you read. Here’s one assessment from Fortune/i>:

Infrastructure as many people think of it—construction or improvement of bridges, highways, roads, ports, waterways, and airports—accounts for only $157 billion, or 7%, of the plan’s estimated cost. That’s apparently what Vought was referring to. The definition of infrastructure can reasonably be expanded to include upgrading wastewater and drinking water systems, expanding high-speed broadband Internet service to 100% of the nation, modernizing the electric grid, and improving infrastructure resilience. That brings the total to $518 billion, or 24% of the plan’s total cost.

No matter whose assessment you read the majority of the $5.5 trillion in spending is not infrastructure unless you define everything that makes life possible infrastructure which is to remove any meaning from it. If everything is infrastructure nothing is infrastructure.

There’s something else I would remind you of: when your willingness to pay (what you’ll spend) exceeds the cost of what’s on offer, the price of what’s on offer will rise. In some sense that’s the point of all the spending. The administration clearly wants the wages of home healthcare workers to rise. Make more money available for it and that’s what will happen.

I should also mention that even Modern Monetary Theorists believe that if government spending increases faster than aggregate product, it will produce inflation. Again, in some ways that’s probably the point of all the spending. The debt is less burdensome when the dollar is worth less.