Remember last fall when a bunch of Nobel economists assured us that gobs more spending by Joe Biden wouldn't have serious inflationary impacts?

 Here's what the ring leader of Tom Nichols' vaunted expert class of economists had to say at the time:

Some, however, have invoked fears of inflation as a reason to not undertake these investments. This view is short-sighted. ... We need safe school buildings and bridges, and affordable child and elder care, whether inflation is 2% or 5%. With the investments being financed by tax increases, the inflationary impacts will be at most negligible ...

The Build Back Better package ... would transform the U.S. economy to be more efficient, equitable, sustainable, and prosperous for the long run, without presenting an inflationary threat.

From Joe Stiglitz' letter last September, here. Robert Shiller of all people signed on to this load of hooey. Carl Schramm unloaded on all this yesterday, here.

Stiglitz wrote that with a straight face when inflation had already soared to 5.3% in July. The orgy of coronavirus spending in 2020-2021 was already stoking the inflation engine, but the experts then simply ignored it, and called for more! more! more!

Now look where we are, even without more.

Government spending in the United States hasn't been financed by tax increases in decades. We wouldn't be $30 trillion in the hole if it were. It's financed by borrowing, and the interest payments on that borrowing progressively accumulate to crowd-out other spending. One day soon interest payments on the debt will become the biggest part of the budget, severely limiting our ability to allocate resources responsibly.

 

 

Build Back Better is well and truly dead: House passes $1.5 trillion omnibus to fund federal government through September

 $780 billion is for the Department of Defense.

The bill(s) go to the Senate next.

The usual sausage making, with a little spice added in.

Story.

$2.2 trillion Build Back Butter bill Democrats insisted would cost nothing CBO estimates would cost $367 billion over ten years

 

 

 

 

 

 

So-called Democrat moderates in the House voted for it anyway, 220-213, undermining Republican claims their votes could be peeled away once the infrastructure bill had been passed separately.

Between the $250 billion cost of the infrastructure bill and the $367 billion cost of the Build Back Better bill, the optimistic CBO estimated combined ten year costs will dig a $617 billion hole in addition to the $6.8 TRILLION in fiscal year deficits for 2020 and 2021 spent since the onset of the pandemic to alleviate it.

The pandemic spending orgy, which was bipartisan, makes this all seem like a kerfuffle about relatively little.

Already pared back from $3.5 trillion or more in spending, the BBB faces an uncertain future in the Senate. The wild spending dreams of progressives may have been dashed, but anyone who pretends any of this makes any sense is crazy.

The country is currently holding at $28.9 TRILLION in debt, and is set to explode higher pending the raising of the debt ceiling. 

From the story: 

The final outcome wasn't much in doubt after centrist Democrats' deficit concerns largely melted away.

The vote came hours after the Congressional Budget Office issued its official cost estimate of the sweeping legislation, which moderate Democrats eagerly awaited to ease their concerns over the fiscal impact. The Biden administration and Democratic backers of the bill have insisted it would pay for itself and not add to federal deficits.

The nonpartisan CBO, the official scorekeeper, offered a cost estimate with a little wiggle room. It said the measure would increase deficits by $367 billion over 10 years — but that doesn't count additional revenue that could come from increased IRS tax enforcement.

How much new revenue that effort would yield has been hotly debated. The White House has said increased enforcement, aided by an additional $80 billion in IRS funding, would produce $480 billion in new revenue over a decade. The CBO took a more cautious view, saying the effort might produce $207 billion.

Republicans voted for the Biden infrastructure bill despite the CBO's estimate it would add $250 billion+ to the national debt over 10 years

 Is $25 billion a year a big deal?

We're already paying $500 billion+ EVERY YEAR in interest expense on the debt.

Nobody cares.

 

 

Bi-partisan Senate infrastructure plan authorizing $550 billion in new spending passed the House late last night and goes to Biden for his signature

The bill was opposed in the House by almost all Republicans, and by six far-left Democrats who were outmaneuvered by thirteen moderate Republicans who threw their support to the plan, which 19 Republican US Senators had voted for earlier this summer. 

The House progressives had insisted that the infrastructure plan be voted on together with Biden's social spending plan in order to force moderate Democrats to go along with the latter. The House Republican votes for the Senate bill ended up thwarting that linkage, making it even more likely that the House version of the social spending plan will have to be much less ambitious.

A small group of House Democrats have insisted the Congressional Budget Office score the impact of the separate social spending plan, which would have been standard operating procedure under Republicans but which Democrats under Pelosi have been avoiding until now. They don't give a damn about the true costs. They've even claimed absurdly a $3.5 trillion social spending plan will cost NOTHING. Ha ha ha ha ha.

That ranks among the most shameless attempts to change reality through a talking point ever attempted.

Whatever comes out of the House on that will face the hard scrutiny of Democrat Senators Manchin and Sinema regardless. 

Roll Call:

The bipartisan bill would reauthorize surface transportation and water programs for five years, adding $550 billion in new spending. 

It includes $110 billion for roads, bridges and major projects; $39 billion for transit and $66 billion for rail; $65 billion for broadband; $65 billion for the electric grid; $55 billion to upgrade water infrastructure and $25 billion for airports.

WaPo:

The bill includes more than $110 billion to replace and repair roads, bridges and highways, and $66 billion to boost rail, making it the most substantial such investment in the country’s passenger and commercial network since the creation of Amtrak about half a century ago. Lawmakers provided $55 billion to improve the nation’s water supply and replace lead pipes, $60 billion to modernize the power grid and billions in additional sums to expand speedy Internet access nationwide.

Many of the investments aim to promote green energy and combat some of the country’s worst sources of pollution. At Biden’s behest, for example, lawmakers approved $7.5 billion to build out a national network of vehicle charging stations. Reflecting the deadly, costly consequences of global warming, the package also allocates another roughly $50 billion to respond to emergencies including droughts, wildfires and major storms.