Q&A – The Largest Government Spending Deals In American History
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Today’s entry: Happy morning Brian, I have a question for you that I thought you might be able to answer for me, it is: when was the last time Congress was asked to raise the debt ceiling while voting on a $3.5T+ package of new expenditures? What past pending spending package even comes close to this?
I think the time has come that all Americans take a Civics course and re-educate themselves on how this government is supposed to work and who the pols actually work for and represent.
All the best and keep up the great work you do!
Bottom Line: First, speaking to the contextual elements of your analysis you’re exactly correct. Nobody knows what the heck is really in the reconciliation legislation because it’s written as though it’s Obamacare 2.0. By that I mean the legislation is open-ended introducing what would be the largest expansion of government social programs since The New Deal. I’m going to come back to The New Deal in a moment to address the context of your question. But first, as Nancy Pelosi infamously said in 2009 during the passage of the ACA, we’ve got to pass the bill so you can find out what’s it. With the reconciliation legislation, it’s the principal of open-ended legislation on steroids. For that reason, even the $3.5 trillion tag that’s thrown around is really just the jumping off-point for costs associated with what’s being attempted here.
According to analysis by the Tax Policy Center, the true costs of federal legislation have historically been near-exclusively underestimated. Quoting the Center’s report: When estimators miss on the low side, it is often because they are trying to project costs of those government programs and tax subsidies that are both permanent or “mandated,” absent new legislation, and essentially open-ended. That’s exactly the scenario we have here. The reconciliation package is open-ended and additionally it’s being tied congressionally to another simultaneous $1.2 trillion infrastructure package. To that end, analysis by the Committee for a Responsible Federal Budget identifies the real cost of the reconciliation package alone at a minimum of $5 trillion dollars. At a certain point the numbers are so high it just all might sound like Monopoly money. Factor in most Americans are financially illiterate, meaning they’re not especially well-versed in their own finances, let alone whatever the heck this stuff means in Washington. It’s this ignorance the Democrats, who seek to radically transform this country from free-market capitalism into a quasi-socialist economy, rely on to press forward. So, about the costs...
We’ve never seen anything close to what’s currently being attempted in American history. First, a question for you...what federal legislation would you suspect would be the most expensive in American history adjusted for inflation? I asked myself that question before researching it. My answer was The New Deal. Guess what? That’s wrong. And that historical reference point can apply in shocking context to just how radically Democrats are currently seeking to overhaul the United States of America. Here are the most expensive federal spending laws adjusted for inflation (cost in today’s dollars):
- 2020 CARES Act - $2.2 trillion
- 2021 American Rescue Plan - $1.9 trillion
- 2009 Affordable Care Act - $1.2 trillion
- 2009 American Recovery and Reinvestment Act - $1 trillion
- 2020 Coronavirus Response and Relief Act - $900 billion
- 1933 The New Deal - $850 Billion
So, wrap your brain around that one for a moment. The New Deal isn’t even in the top five most expensive federal spending laws in American history after what’s happened over the past year plus. You can observe that all of the most expensive laws have happened since 2009 with the top two having happened within the past year. That’s all excluding the costs of the bi-partisan Senate Infrastructure plan tagged at $1.2 trillion – which would equal the fourth largest spending package in American history and as for the reconciliation package. You can see it’d obliterate anything that’s ever been done. In terms of how radically it’d transform our society, even if you accepted the false premise of the legislation checking it at $3.5 trillion – it'd be greater than 4 times the impact of The New Deal.
Make no mistake, what’s being attempted right now isn’t just unpreceded, it’s easily the most radical transformation of our society in the making. One in which the country not only can’t afford – unless you’d like your inflation which is already running at the hottest rate in over 30 years – to spiral higher – but that would leave this country permanently transformed into a quasi-socialist entity. The stakes have truly never been bigger. That’s why no news out of Washington is the best news.