Is Big Government Here to Stay?

The Democrats of 2021 are determined not to let the COVID crisis go to waste. Instead, they want the extraordinary government spending that marked the past year to become America’s new normal. President Biden has proposed: 1) increasing discretionary spending by $1.5 trillion next year, 16% more than the current level; 2) spending an additional $2.3 trillion on infrastructure—very broadly defined—over the next eight years; and 3) an additional $1.8 trillion in federal spending and tax credits over the next ten years for a variety of social welfare purposes.

A trillion here, a trillion there. The question is not how soon we’re talking real money. In the belief that if something can’t go on forever, it won’t, the economic question is how soon before we’re talking real consequences: higher taxes, inflation, and interest rates, leading to stagnation and, ultimately, an America that is “a kinder, gentler place of permanent decline,” in the words of New York Times columnist Bret Stephens.

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