The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Magical Thinking as Economic Policy

Posted on | July 29, 2022 | 2 Comments

“In psychiatry, magical thinking is a disorder of thought content; here it denotes the false belief that one’s thoughts, actions, or words will cause or prevent a specific consequence in some way that defies or circumvents commonly understood laws of causality.”

Joe Biden evidently believes that recession can be avoided by pretending there is no recession, and that inflationary spending proposals can be enacted by dubbing them “The Inflation Reduction Act.”

Of course, it is somewhat sarcastic to speak of what Biden “believes,” let alone what he “thinks,” given that his mental condition has deteriorated to such a dysfunctional state that his cognitive processes cannot really be described as “belief” or “thought,” in the literal definition of those words.

In 2022, of course, many words have lost their meanings. Newsweek ran the headline “Joe Biden’s Eyes in Video Spark Wild Conspiracy Theories,” but is it really a conspiracy theory to say that the appearance of Our Alleged President in that 17-second video clip looked like some kind of CGI green-screen deepfake? Considering how we were assured by the same media outlets that it was a “conspiracy theory” to believe Biden’s dopehead son Hunter left a laptop full of incriminating evidence in a computer repair shop — which everyone now admits actually happened — hasn’t “conspiracy theory” become just a pejorative epithet meaning facts the media don’t want you to know about? But I digress . . .

The shameless effrontery of the people running the White House keeps surprising even hardened cynics like me. Just when you think their capacity for bald-faced lying has reached its absolute rock-bottom, they somehow manage to go even lower. Remember the “Build Back Better” act that died in the Senate last year? The mendacious bastards just repackaged it and called it “The Inflation Reduction Act of 2022”:

The latest compromise includes the previously agreed-upon health care provisions as well as a 15 percent corporate minimum tax, a proposal to close the carried interest tax loophole, and a provision for IRS enforcement. Additionally, it contains historic spending for climate, though it’s on a smaller scale than what the House envisioned last year.
All told, Democrats estimate the bill will bring in $739 billion in revenue and will invest $433 billion in spending. It also addresses Manchin’s goal of reducing the deficit and would do so by $300 billion or more. The bill’s investment in areas like clean energy, tax credits, and reducing health care costs is notable, though it’s much less ambitious than the provisions in the $1.75 trillion bill that the House passed last year.

That’s according to the liberal site Vox, which repeats the Democratic Party’s claims about projected revenue and deficit reduction as though this stuff will actually happen. News flash: It won’t.

When you employ magical thinking as the basis of economic policy, it’s possible to imagine almost anything, including $735 billion in tax revenue by imposing punitive taxes on corporations, as though the smart guys who run international business conglomerates are just going to leave that money sitting around and wait for Uncle Sam to come get his 15 percent share. But when the tax man shows up, those CEOs will point to the accounting numbers which prove that, in fact, they haven’t got two nickels to spare. The IRS guy will shrug and say, “Oh, well,” then walk away empty-handed. And then the CEOs will make gigantic donations to the Democratic Party, and the fact that all these hundreds of billions of dollars in projected tax revenue never made it to the Treasury Department will be forgotten, quite conveniently for all concerned.

You can’t tax your way out of a deficit.

Call that McCain’s Law of Fiscal Policy, if you wish, but every time Democrats get control of the White House, they keep trying the same thing. Democrats never met a wasteful billion-dollar boondoggle or welfare giveaway they wouldn’t support, and they throw away taxpayer money on all sorts of useless or harmful projects, and don’t you dare suggest that a single penny be taken away from the Department of Health and Human Services budget, you damned racist Republicans who want to shove Grandma off a cliff. Democrats want federal taxpayers to fund programs to hand out free needles to junkies sleeping on the sidewalk, send drag queens to entertain kindergartners in every school in America, and subsidize economically dubious “green energy” projects, while still claiming that they’re in favor of reducing the deficit.

Magical thinking: “Corporate minimum tax!” This will miraculously solve all the budget problems, Democrats expect us to believe and, considering that 38.2% of voters actually approve of the job Biden’s doing as president, there are tens of millions of Americans stupid enough to believe anything. Yet the fact remains: You can’t tax your way out of a deficit because, as the First Corollary to McCain’s Law of Fiscal Policy, the federal government will automatically grow to consume whatever additional revenue new taxes might actually produce.

The revenue dog is never fast enough to catch the spending rabbit, you might say, but even if you believe that this latest “compromise reconciliation” bill will somehow reduce the deficit — which no intelligent person honestly believes — please tell me, how the hell is it supposed to reduce inflation? Because that is the official name of this preposterous legislation: “The Inflation Reduction Act.” Apparently, we are expected to believe that ramming this thing through Congress to “invest $433 billion in spending” will reduce inflation, as if out-of-control federal spending weren’t the principal cause of our inflationary spiral. Instead, Democrats want us to believe, the real cause of inflation is — brace yourself for genius-level insight — corporations aren’t paying enough taxes!

There are no adjectives strong enough to describe my disgust with the gross cynicism behind the “Inflation Reduction Act of 2022.” No honest person could possibly endorse this fraudulent legislation. Yet the magical thinking of Biden’s economic policy keeps producing insults like this:

President Joe Biden on Thursday reminded Americans suffering from inflation and high gas prices that he sent them a check for $8,000 in 2021.
“There’s reason to be down but I started thinking about it … the first year, we were able with the rescue plan, we were able to send them a check for eight grand,” he said. “I mean a check. Beyond that by the way, there was more than that.”
The president spoke about the trillions he spent in the Democrat-passed American Rescue Plan during a conversation he had with his economic advisers on the state of the economy. His mention of the “$8,000 check” was likely a reference to the temporary expansion of the child tax credit provided to some families in 2021 until it expired this year.
Biden complained that Americans forgot what he did for them in 2021, even as he admitted it was “totally understandable.”
He pointed out that even for Americans making $120,00 a year, $8,000 dollars should have meant a lot to them.
“That’s a lot of money, and so it helped save a lot of people in terms of getting thrown out of their home and rental housing and a whole range of things,” he said. . . .
“Does that make any sense to everybody or is it just me?” he asked his advisers.
Treasury Secretary Janet Yellen agreed, noting the trillions in government spending boosted the economy, despite the high inflation rates that followed.
“We need to bring down inflation, but we need to preserve the success that that plan achieved in the labor market,” she said.

This makes me so angry, it’s impossible for me to write any sentence that doesn’t include the phrase “fucking bullshit.” Think back, if you will, to what actually happened with the so-called “American Rescue Plan. The first COVID “stimulus” bill passed in March 2020, at a time when were were being told that a lockdown of “two weeks to slow the spread” was necessary, which was immediately followed by “30 days to flatten the curve.” So by May 1, all the lockdowns would be over, right? No, the pandemic panic brigade insisted on lockdowns ad aeternum — we must “follow the science!” — and so millions of people were forced out of work. Months went by and, with so much of the economy locked down, the need for more “stimulus” was obvious, but the Democrats who controlled Congress wouldn’t pass another stimulus bill before the election.

Meanwhile, thanks to the Trump administration’s “Operation Warp Speed” project, COVID vaccines were developed in record time — but not in time for the election. So then the election happened and, while the first vaccinations were being administered, Congress belatedly passed another $900 billion “stimulus” package in December 2020, a month before Biden took office. The vaccine promised a swift return to normal (even though Florida had been back to normal for months, without causing any great crisis), and therefore, the need for additional “stimulus” wasn’t obvious. And it was at this crucial moment that Democrats rammed through “The American Rescue Plan Act of 2021,” a $1.9 trillion — yes, trillion, with a “t” — stimulus package, which took effect in March 2021, just three months after the previous $900 billion stimulus bill, so that the federal government injected $2.8 trillion in new spending into the economy in a span of 90 days.

“Gosh, I wonder why we have all this inflation now?” said nobody.

Oh, and of course I didn’t get any “eight grand,” and neither did you, because we were still working and paying our bills, same as always. The question of who did get “eight grand,” I’ll leave you to figure out for yourselves, but here Joe is telling Americans they shouldn’t complain about inflation because “we” — notice the first-person plural pronoun, by which he means Democrats — “we were able to send them a check for eight grand.” WHAT DO YOU THINK CAUSED THE INFLATION, JOE? DO YOU THINK MAYBE IT WAS $1.9 TRILLION IN ‘STIMULUS’ TO PAY PEOPLE TO STAY HOME INSTEAD OF WORKING?

Excuse my all-caps rant there. I’ve been trying to ignore this kind of stuff — concentrate on pleasant things, like the Patriots opening training camp — but today I made the mistake of reading actual news and saw they were calling this legislative monstrosity “The Inflation Reduction Act of 2021,” and suddenly found myself thinking, “You know, those guys who stormed the Capitol may have had the right idea all along.”

Everybody should have known the Biden administration would be a disaster, but even I never imagined how bad it would be.

UPDATE: Welcome, Instapundit readers!




 

Category: Economics, Joe Biden

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2 Responses to “Magical Thinking as Economic Policy”

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