President Biden on Wednesday pitched a new plan to Americans before a joint session of Congress: more spending.
The just-released $1.8 trillion plan, presented just weeks after Biden signed a $1.9 trillion in COVID relief spending into law, includes “free” community college as well as universal preschool for all three and four-year-olds.
“Mr. Biden could usher in a new era that fundamentally expands the size and role of the federal government,” The New York Times reported.
How Much Debt Is Bearable?
The announcement comes months after the Congressional Budget Office released a report projecting a $2.3 trillion deficit in 2021.
Biden’s plan will almost certainly make the deficit worse. Though the plan contains various tax increases to fund its programs, the taxes are likely to fall well short of government outlays, economists say.
“The laws of economics are more rigid than the laws of the federal government, and these tax hikes are unlikely to yield the windfall Biden expects,” Joshua Jahani, the managing director of Jahani and Associates, noted in a recent NBC News article.
As a result, the $28.2 trillion national debt will swell even faster. Worse, when unfunded liabilities are included in the balance sheet, as private companies are legally required to do, the debt exceeds $120 trillion.
How much risk these obligations present is unclear.
This article is excerpted from the FEE Daily, a daily email newsletter where FEE Policy Correspondent Brad Polumbo brings you news and analysis on the top free-market economics and policy stories. Click here to sign up.
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