Kudlow: We are not going to tax our way into prosperity
Kudlow: I’m worried about the Democrats’ ‘left-wing woke budget’
‘Kudlow’ host says that US can’t tax its way into prosperity
So, apart from Nancy Pelosi’s attempt to either arrest or just do away with Republican House members altogether if they don't wear masks—which they shouldn't because this whole CDC thing is completely stupid and is now triggering threats to school openings, business openings, job hiring, wrecking kids and [triggering] generally catastrophic possibilities—the biggest story is still the infrastructure plan approved for floor debate by 67 votes yesterday.
Now, there's a lot we don't know. Both the White House and the Republican senators have put out a summary — so-called fact sheets.
I’ll begin by agreeing with my friend Senator Rob Portman’s WSJ op-ed, posted a few hours ago, that calls it an agreement for necessary investments without destructive tax hikes.
I agree, and Senator Portman expressed his complete opposition to the $5 trillion so-called "reconciliation package," calling it "another reckless tax-and-spending bill."
I agree that what started as a $2.6 trillion bill with destructive tax increases has been trimmed to $1.2 trillion. I would note that former President Trump always wanted a trillion-dollar infrastructure bill.
He campaigned on it in 2016 and continued to support it throughout his tenure. It couldn't get it done in Congress, but in some sense, this story is another Trump legacy.
Now the numbers inside this plan are still elusive. CBO has no formal price out.
I’ve been reading through the White House and Republican summaries. The $550 billion spending number pops up in both, and it looks to me like basic infrastructure consumes about half of the $550 billion.
It also looks like hardcore green climate change spending will absorb about a quarter to a third of the total (tough to say exactly right now). We need more details in a kind of committee print legislative package that everybody can read.
I do want to caution though when you read the White House summary, it talks about good paying union jobs (think Davis-Bacon forever), tackling the climate crisis and growing the economy equitably. So, on that last equitably point, I continue to not understand what they're talking about.
In America, we all start out with equal opportunity at the beginning of the race, but we don't all cross the starting line in one long 350 million horizontal line of income and wealth. That would be un-American because here in America we believe in rewarding success and enabling folks to use their God-given talents in any way they choose.
So this equity theme, which sounds so much like socialism, pops up again.
Good paying union jobs? Well, the White House would like to unionize pretty much everything, wouldn't they? Including repealing right-to-work laws that exist in about half the states and of course, they want to jack up all kinds of minimum wages, health benefits, this and that, and then tackling the climate crisis.
I don't know where the climate crisis is. Physicists like Steve Koonin see no emergency existential threat to our climate. Experts like Bjorn Lomborg argue we can rely on technological advances to solve climate issues rather than government regulations and taxes.
I don't deny that there are climate issues. I just think they're totally manageable without destroying our fossil fuel energy base.
So, looking at the White House summary sheet, I’m just saying it looks a lot like "go woke, go broke" same themes as usual, and that troubles me a bit because I think all these projects in the infrastructure plan — roads, bridges, freight rail, public transit, waterways, ports, broadband, airports, etc — are going to go to what is called environmental justice review. Really? Right there I see a big problem.
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Although some permitting progress was made, it doesn't go nearly far enough to ensure timely project development and conclusions, and lord bless them, we got low carbon and zero-emission school buses, electric vehicles, electric gas pumps (aka charging stations), green power grids, subsides for critical minerals for the batteries, critical subsidies for critical energy technologies, demonstration projects, advanced manufacturing tax credits, and eco-resiliency.
Really no one on the planet could possibly know how much this stuff is going to cost, how long it'll take to implement it or how much this Green New Deal will destroy the economy, which leads me to my very last point.
My favorite pay-for in the list is $56 billion from economic growth resulting from a 33% ROI (return on investment) in these infrastructure projects.
Now that there is a big reach, but my question is …
Since the Democrats want to raise taxes on everything — from corporations to small businesses, capital gains, global taxes on American companies and even death — that's going to wreck the ROI on everything.
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I mean you can't have infrastructure unless you have a healthy, functioning economy. We are not going to tax our way into prosperity and that’s why whatever happens to this infrastructure bill, it's the big one that will follow it that I worry about—the big plan from Team Biden and the Dems.
I hope that if Speaker Pelosi doesn't arrest all the Republican House members, at least some of them will be around to prevent the left-wing woke budget coming down the road after infrastructure.
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