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Government spending ‘changing people’s lives’ as economy sinks

Government spending changing peoples lives as economy sinks


Finally, a statement President Biden and his critics can both agree on.

The commander-in-chief insisted during a speech to AFL-CIO union members in Philadelphia Tuesday that government spending was “changing people’s lives.”

His opponents ironically concurred, pointing to annual inflation that soared to 8.6% last month.

“I don’t want to hear any more of these lies about reckless spending. We’re changing people’s lives!” Biden shouted at one point during his remarks.

“Under President Biden, Americans’ lives have changed for the worst,” tweeted Rep. Mike Rogers (R-Ala.).

“Pres. Biden is right,” tweeted Sen. John Kennedy (R-La.). “40-year-high inflation, formula shortages, and $5 gas are changing lives …”

Inflation has surged to a 40-year high.
AP

“You’re changing their lives alright,” snarked Sen. Josh Hawley (R-Mo.). “$5+ gas, no baby formula, historic inflation, historic crime wave”.

Back on the Philadelphia stage, Biden denied the charge by Republicans, federal bankers and even Amazon and Washington Post owner Jeff Bezos that his spending had spurred inflation, which has driven up prices more steeply than at any time since 1981.

The president invoked two large spending bills: his $1.9 trillion American Rescue Plan Act, which Democrats passed last year without Republican support, and last year’s $1.2 trillion bipartisan infrastructure bill.

The Rescue Plan Act wasn’t offset by new revenue and therefore contributed to the $30.5 trillion national debt. The Congressional Budget Office said the infrastructure bill would add $256 billion to the federal deficit.

Gas prices
Gas prices have seen a nationwide increase over the past few months.
Getty Images

The larger bill gave state and local governments $350 billion, along with $1,400 stimulus checks to most Americans, an extended $300 weekly unemployment supplement and an expanded annual child tax credit to $3,000-$3,600, up from $2,000 per child.

Biden has previously said the spending improved people’s lives — while also causing them to compete for scarce resources.

“The irony is people have more money now because of the first major piece of legislation I passed. You all got checks for $1,400. You got checks for a whole range of things,” Biden said in November. “It changes people’s lives. But what happens if there’s nothing to buy and you got more money to compete for getting [goods]? It creates a real problem.”

A study released in late March by researchers at the Federal Reserve Bank of San Francisco said that in the final quarter of 2021, about 3 percentage points of US inflation — or nearly half of it at the time — may have been caused by government pandemic spending.

Biden went on to claim Tuesday that he “put America in a position to tackle a worldwide problem that’s worse everywhere but here: inflation” — even though US inflation actually is higher than in most other Western nations.

Inflation in the US in May — 8.6% — was higher than the Eurozone average of 8.1% and South Korea’s 5.4%. Australia’s most recent data — 5.1% in March — was higher than the US inflation rate of 8.5% that month. Canada’s most recent data — 6.8% in April — was higher than the comparable 8.3% US rate.

Biden also claimed the federal deficit declined thanks to his leadership.

“Last year, we cut the deficit by $350 billion,” he said. “By the end of the fiscal year, we will have cut the federal deficit by another $1.6 trillion in one year.”

Shopper
Biden did not reference the coronavirus pandemic as a cause for the high deficit in 2020.
AP

But Biden didn’t mention that the deficit was so large in 2020 because it was the first year of the COVID-19 pandemic and featured enormous bipartisan spending bills — including the $2.2 trillion CARES Act — while the Treasury brought in less revenue due to the economic shock.

Biden proceeded to urge Congress to dust off and pass his stalled $2 trillion social and environmental spending package, which centrist Sen. Joe Manchin (D-WVa.) effectively killed in December, citing inflation and what he called budget gimmicks to undercount costs.

Biden said inflation is “sapping the strength of a lot of families,” but “the problem is Republicans in Congress are doing everything they can to stop my plans to bring down costs on ordinary families. That’s why my plan is not finished and why the results aren’t finished either.”

In addition to blaming Congress, Biden recently has pointed the finger at Russian President Vladimir Putin’s invasion of Ukraine, which increased fuel and food prices, and on pandemic supply chain bottlenecks. The president has also blamed what he’s described as corporate greed by meat producers, oil companies and shipping conglomerates.

Critics often blame his spending and his efforts last year to discourage the production and distribution of fossil fuels.

In his speech to the AFL-CIO, however, Biden cast himself as the person most responsible for economic improvement during his first year in office, which was facilitated in part by the mass-distribution of COVID-19 vaccines the began in December 2020 during the Trump administration.

Biden said his Rescue Plan Act “put money in the pockets of hardworking Americans who were in trouble and being thrown out in the street because they couldn’t pay the rent through no fault of their own” — neglecting to mention he took office while eviction protections were still in effect from his predecessor Donald Trump’s executive order to establish a moratorium after Congress allowed a legislated pause to lapse in July 2020. The executive-branch decree was ended by the Supreme Court in August 2021.

“My predecessor became just a second president in history to leave office was fewer jobs in America than when he took office, but you stepped up. The other one by the way, was Herbert Hoover,” Biden taunted. “And just remember those long lines of cars stretching miles back waiting for just a box of food to be put back in their trunk? It wasn’t just poor folk.”

Biden continued: “And while it was going on, America created more billionaires during that crisis in 2020 than any year in history. Talk about a contrast: Ordinary people waiting in line for an hour for a box of food. The policies in the past created more billionaires than ever in American history. Folks, it’s hard to believe, but it’s true. That’s what we inherited. And then with your help we went to work.”

Although the US did add roughly 56 billionaires in the first nine months of the pandemic, according to the Institute for Policy Studies, bringing the total to 659, Biden’s invocation of food lines previously has been an issue due to the fact that local government-ordered shutdowns forced people into needing the aid.

Biden last month claimed that “the MAGA crowd” — referring to Trump’s slogan “Make America Great Again” — downplayed massive food lines at the start of the pandemic — despite then-first daughter Ivanka Trump organizing a government program to distribute boxes of food and the fact that Trump pressured conservative Republicans to extend enhanced unemployed pay and to give more generous stimulus checks.



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