President Joe Biden enters the Oval Office in the midst of an ongoing pandemic and deepening economic crisis. Given the terrible circumstances of the U.S. economy on Inauguration Day, one would assume the Biden administration would do everything in its power to aid working Americans by saving existing jobs, creating new jobs, and embracing free-market policies that would likely spur a robust economic recovery.
However, this is unlikely because the Biden team has already made it clear that it will focus on three policies that will make things worse, not better, for the American economy.
The first way Biden will undermine a strong and swift recovery from the economic doldrums is his insistence on undoing the policies that helped make America a thriving energy producer.
Biden has already pledged that he will return the United States to the Paris Climate Agreement, which will hamper America’s ability to remain the world’s foremost energy producer.
He has also made it clear that he will oppose the completion of the Keystone XL pipeline. Doing so will cost thousands of jobs and will increase energy prices for millions of Americans. This is the last thing we need in these times of tribulation.
In general, the Biden administration will pursue energy policies that will reduce the supply and production of oil and natural gas in the nation. This posture will lead to higher prices at the pump and increased power bills for countless Americans struggling to make ends meet.
Biden’s energy policies and his embrace of elements within the Green New Deal will disproportionately impact lower- and middle-class Americans, the very people who have been most financially harmed over the past year.
The second way the Biden team will make the economic crisis worse is by supporting a $15 minimum wage as small businesses are shutting in droves. The backbone of the American economy is the nation’s hundreds of thousands of small businesses.
Yet, for almost a year, small businesses throughout the nation have been dropping like flies due to COVID lockdowns and bans on indoor gatherings. If ever there were a time to not recommend a huge increase to the nation’s minimum wage, which would almost double under Biden’s $15 proposal, it is now.
According to multiple studies, including a recent one by the Congressional Budget Office (CBO), a $15 minimum wage would cause millions of jobs to be lost, which would put more Americans in poverty.
According to the CBO study, “Increasing the federal minimum wage would have two principal effects on low-wage workers. For most low-wage workers, earnings and family income would increase, which would lift some families out of poverty. But other low-wage workers would become jobless, and their family income would fall—in some cases, below the poverty threshold.”
In other words, some low-wage workers will earn more money per hour. However, the flip side is that untold numbers of jobs will be lost because employers cannot afford to arbitrarily raise the wages of all their workers.
Like his energy policies, Biden’s $15 minimum wage will most negatively impact those in the lower-class. A $15 minimum wage will also accelerate automation and off-shoring of low-skilled jobs, which will cause more economic turmoil for those at the bottom of the economic ladder.
The third way that the Biden administration will stifle a post-COVID economic recovery is his call for higher taxes and trillions in new spending programs. Biden has already laid out a $1.9 trillion American Rescue Plan that includes enhanced and extended federal unemployment benefits, $1,4000 stimulus checks, and $350 billion to states and local governments.
The United States is deep in debt, to the tune of more than $27 trillion. As of this writing, the U.S. debt to GDP ratio has eclipsed 127 percent, which is unsustainable and must be reduced soon in order for the nation to avoid a debt crisis.
Adding trillions more to the national debt, while raising taxes, is more than likely to cause more economic chaos. Unfortunately, this seems to not resonate with the Biden administration.
Yet, it will matter to Americans, when inflation and stagnant growth reduces their living standards.
For the next four years, the Biden administration will pursue economic policies that are the mirror opposite of those implemented under the Trump administration.
Americans will soon find out that Biden’s policies might sound good in theory, but they do not live up to the rhetoric in reality.
It is a hard and costly lesson to learn, but as they say, “elections have consequences.”
Chris Talgo ([email protected]) is an editor at The Heartland Institute.