Senator Joe Manchin may be the deciding vote in the most massive legislation our nation has ever seen, and judging by his latest statement it appears he’s siding, at least in part, with fiscal responsibility rather than Modern Monetary Theory. I’ll explain what his statement really means, but let’s read it all first:
Every Member of Congress has a solemn duty to vote for what they believe is best for the country and the American people, not their party. Respectfully, as I have said for months, I can’t support $3.5 trillion more in spending when we have already spent $5.4 trillion since last March. At some point, all of us, regardless of party must ask the simple question – how much is enough?
What I have made clear to the President and Democratic leaders is that spending trillions more on new and expanded government programs, when we can’t even pay for the essential social programs, like Social Security and Medicare, is the definition of fiscal insanity. Suggesting that spending trillions more will not have an impact on inflation ignores the everyday reality that America’s families continue pay an unavoidable inflation tax. Proposing a historic expansion of social programs while ignoring the fact we are not in a recession and that millions of jobs remain open will only feed a dysfunction that could weaken our economic recovery. This is the shared reality we all now face, and it is this reality that must shape the future decisions that we, as elected leaders, must make.
Since the beginning of this reconciliation debate, I have been consistent in my belief that any expansion of social programs must be targeted to those in need, not expanded beyond what is fiscally possible. Our tax code should be reformed to fix the flaws of the 2017 tax bill and ensure everyone pays their fair share but it should not weaken our global competitiveness or the ability of millions of small businesses to compete with the Amazons of the world. Overall, the amount we spend now must be balanced with what we need and can afford – not designed to reengineer the social and economic fabric of this nation or vengefully tax for the sake of wishful spending.
In August, I recommended we take a strategic pause to provide time to develop the right policies and to continue to monitor how the pandemic and economic factors are affecting our nation’s fiscal situation before we spend more. Throughout September, I have made it clear to all those who would listen the need to means test any new social programs so that we are helping those who need it the most, not spend for the sake of spending.
While I am hopeful that common ground can be found that would result in another historic investment in our nation, I cannot – and will not – support trillions in spending or an all or nothing approach that ignores the brutal fiscal reality our nation faces. There is a better way and I believe we can find it if we are willing to continue to negotiate in good faith.
If there is one final lesson that will continue to guide me in this difficult debate ahead it is this: America is a great nation but great nations throughout history have been weakened by careless spending and bad policies. Now, more than ever, we must work together to avoid these fatal mistakes so that we may fulfill our greatest responsibility as elected leaders and pass on a better America to the next generation.
The left has tried to frame his dissent as him being bought by corporate interests. This is the standard gaslighting; corporate interests have no role in Manchin’s decision. But those on the right who think he’s being a good pseudo-Republican are wrong about him as well. He’s not saying he doesn’t support spending massive amounts of money. He just isn’t willing to spend $3.5 trillion.
Lest we forget (and it’s easy to do considering the amount that has been spent over the last year and a half), even $1 trillion is a massive amount of money. Democrats and even some Republicans have attempted to downplay the economic impact of the unsustainable spending that has taken place and will continue to take place, but the reality is we’re talking about an undeniable paradigm shift in DC’s arithmetic. It wasn’t too long ago when the left was complaining about President Trump’s “massive” $20 billion plan to build the border wall. What they’re discussing now is 175 times higher than what they used to call “massive.”
Manchin knows there is tons of pork stuffed into this plan. He knows cuts can be made to get it under $2 trillion and have the same basic impact. As the man in the middle, that’s what he’s pushing for. The end result will still be bad, and we cannot dismiss that. Some on the right claim he’s saving America, but this will still end up being a damaging shot to the gut.
What we are seeing today is the embrace by everyone on the left and far too many on the right of Modern Monetary Theory. The short description of the failed fiscal policy is that a government essentially prints money to cover whatever it wants to buy. This is the pathway to economic ruin, especially for a nation like the United States. Once MMT takes hold, the dollar will be abandoned as both the world reserve currency and the preferred payment for oil. When the dollar is no longer a necessary part of the world economic system, our debt will absolutely crush us. It will be the end of the United States of America.
For Manchin to help delay our death sentence and mitigate some of the damages to prolong the economy while it’s on life support is good, but it doesn’t solve the problem. We need to drastically reduce spending and get people back to work instead of incentivizing them to stay home.
Kudos to Manchin for slowing the locomotive, but our future depends on stopping it altogether. Whether it’s $3.5T, $2T, or even $1T, it will be too much for our current economic state to handle.