TANSTAAFL

I learned a new word today. Objurgate:

to express public or formal disapproval of

I mean I could figure it out from its Latin roots but I’d never seen it used before. Christopher DeMuth uses it in his op-ed castigating the Biden Administration’s use of mostly unfunded benefits:

Has anyone noticed that the president has proposed increasing federal spending by nearly $1 trillion a year, while promising that 98% of Americans will pay nothing for it? The very idea would have seemed mad to every previous generation of Americans. Today it is considered conventional.

President Biden’s plans have been rightly criticized for the incontinence of the spending and the perversity of the taxes. Much of the spending is designed to exploit the pandemic crisis by transforming emergency income support into permanent middle-class entitlements for toddler care, higher education, medical services and much else. Other spending is called “infrastructure” but includes a list of progressive wants having nothing to do with capital investment. The tax increases—supposedly confined to the 2% with household incomes of $400,000 or more, but heavily weighted against capital investment—would seriously damage the economy and raise radically less revenue than claimed.

But set aside these problems and take the Biden plans as advertised, as a tremendous expansion of government paid for by a select few taxpayers plus lots of new borrowing. This is the apotheosis of a political transformation that began insensibly in the 1970s and has triumphed with barely a quiver of recognition, much less debate. It may be called the borrowed-benefits syndrome.

He concludes (and this is where my new word comes in):

I have no solution for borrowed-benefits syndrome, which has dissolved the consensus that the welfare state is something citizens should be willing to pay for. I can, however, objurgate the politicians who have built their careers on propagating the syndrome far and wide, now with unprecedented aggressiveness in the Biden administration and Congress.

I would state the issues somewhat different than he. The Biden Administration faces a number of problems:

• It believes that a lot of spending is desperately needed.
• There are serious limits to how much it can raise by increasing marginal tax rates.
• Joe Biden made a campaign promise not to increase the taxes of individuals with incomes less than $400,000.

therefore it wants to borrow. My answer: borrowing to pay operating expenses is a very, very bad practice. There is, indeed, no such thing as a free lunch. When you borrow you are borrowing from the future to spend in the present. Doing so assumes you will be in a better position to pay in the future and that may well not be the case. It’s one of the reasons for our present slow economic growth.

And another of the alternatives, monetizing it, is even worse. It risks a disastrous loss of confidence in the dollar. If that transpires, it’s game over for borrowed benefits.