With the White House on Monday reminding Americans that families would start receiving direct cash payments starting in July, President Joe Biden’s financial assault on the workforce is set for an alarming expansion. The federal government will start sending families direct cash payments of $300 per child under six years old and $250 to those between seven and eighteen. While this might seem to be a good thing, it is guaranteed to have five very negative effects.
Increasing inflation which is already going through the roof at more than doubling since Biden became president to 4.2 percent will continue to skyrocket as too many dollars chasing too few goods. Inflation is simple to understand, the cost of goods goes up faster than wages can keep up, meaning the harder you work, the farther you fall behind.
The payments without work provide further disincentives for people who are currently sidelined receiving extended unemployment benefits which far exceed what the market dictates their labor is worth will keep even more people sidelined at the exact time the economic reopening should be generating millions of job opportunities. The Biden administration is deliberately creating a government induced labor shortage to artificially drive wages. The net result when people get paid lots of money not to work is that they won’t unless wages go higher. And when the wages are driven artificially higher, the price of the goods and services provided must go up to cover those costs exacerbating a weak dollar inflationary policy at the Federal Reserve.
When the federal government is spending billions that it doesn’t have, the national debt continues to skyrocket. These types of payments could be accepted in 2020 when businesses were shuttered by the government in reaction to the pandemic and people were thrown out of work, but at a time when the economy is in robust recovery, the helicopter money will stall that recovery. The Biden team was handed an economy that was bursting at the seams in recovery and all they needed to do was not mess it up. Now we have rampant and growing inflation, job growth stalling and the challenge of refinancing and rolling over our national debt in an unstable inflation environment which will drive the interest payments that the US taxpayer owes on almost $30 trillion in debt higher. The best course of action is for the federal government to recognize that the emergency is over and to quit spending, but they won’t because the left is trying to create an expectation of government support in the middle and upper middle classes, expanding the welfare state to those who never wanted to be part of it.
Finally, this government dependency is like a drug addiction. Some can take drugs and stop whenever they want, but others get hooked and have the fight of their lives to kick the habit with all too any people losing the battle for their lives. With drugs, one finds themselves in a downward spiral of despair where only the next hit matters. With government dependency, you find yourself losing the hope, confidence, and expectation of achieving the unique things that you were put on earth to do, and instead become convinced that you cannot succeed on your own without an unearned check every month. What’s more, the skills to thrive in the workplace erode rapidly, meaning the longer one is out of a job, the harder it is for them to succeed once they get one. A downward spiral of despair as confidence is lost and hope fades.
It is time for Americans to demand fiscal restraint out of D.C., the crisis is over, and now the real emergency is the federal government’s refusal to declare victory and stop spending.
Rick Manning is President of Americans for Limited Government.