EDITOR NOTE: Most Americans are unaware of the hidden detail contained within President Biden’s $6 trillion stimulus plan--that, essentially, it’s designed to fail after giving a strong two-year economic boost. Take a look at the chart below: 5.2% and 4.3% growth in 2021 - 2022, only to see stagnant growth below 2% for the following decade. It’s aptly called a “sugar high,” like a final burst of energy before a decades-long burnout. The economic lull, or “sugar low,” begins in 2023. Needless to say, a hamstrung economy is not a strategy for long-term robustness. Fortunately, 2023 also marks the implementation of Basel III, where gold will be globally recognized and valued as a Tier 1 (read: ‘risk free”) asset in the banking system. To get to the main point: President Biden’s fiscal vision is aiming at near-term strength in exchange for long-term weakness. This renders America vulnerable to threats on multiple fronts--from the domestic economy to all engagements on the geopolitical stage. The vision and fine print from Biden's plan will render all Americans financially vulnerable to economic weaknesses that are currently being engineered on a systemic scale. Basel III’s gold revaluation will be the ultimate hedge against the self-destructive codes embedded within the dollar’s functionality. And unless you want to ride along with President Biden’s “Great American Descent,” investing in physical non-CUSIP gold and silver is your only exit from a train fated for derailment.
Last week, President Biden released a $6+ trillion budget proposal that would take the US to unprecedented levels of government spending and taxation. We already covered the major economic consequences this would have and how it would hurt everyday Americans. But new scrutiny of the fine print of Biden’s plan by the Wall Street Journal has revealed a bizarre detail that further undercuts its merits.
The progressive argument in favor of government spending is supposed to be that it will help stimulate economic growth. But the White House’s own projections essentially concede that their big-spending plans won’t lead to growth over the long run.
As reported by the Journal, Biden’s budget projects that growth will surge to 5.2 percent in 2021 and 4.3 percent in 2022. Those numbers are strong. But then, by the White House’s own admission, growth will fall to 2.2 percent in 2023 and slump to around 1.9 percent for the rest of the decade. These levels are bleak, not the roaring revival Biden has promised.
“The White House is essentially conceding that all of its unprecedented monetary and fiscal stimulus really is living for today with little regard for the future,” the Journal’s editorial board writes. “It implicitly concedes that the growth it spurs now will have to be paid back later in the form of higher taxes or tighter monetary policy, which might reduce growth. This is the definition of a ‘sugar high.’”
“This contrasts with genuinely pro-growth policies, which seek to create the circumstances for long-term prosperity,” they conclude. “They create better permanent incentives to work and invest.”
The Journal’s apt “sugar high” analogy brings to mind a poignant (and tragically still highly relevant) passage from the classic 1946 book Economics in One Lesson by Henry Hazlitt (emphasis added):
“Doesn’t everybody know, in his personal life, that there are all sorts of indulgences delightful at the moment but disastrous in the end? Doesn’t every little boy know that if he eats enough candy he will get sick? (...) ...do not the idler and the spendthrift know, even in the midst of their glorious fling, that they are heading for a future of debt and poverty?”
“Yet when we enter the field of public economics, these elementary truths are ignored,” Hazlitt concludes. This ignorance drives the “sugar high” fatal flaw that makes Biden’s big-spending budget sure to backfire over the long run—even according to the president’s own economists.