Manchin Gives Biden Coal for Christmas

Wonder where he got it. Reads and Views 20 December 2021.

Reads

1. Joe Manchin reversed course, and now he just says no to the Democrats’ $4.5 trillion Build Back Better plan. Let’s hope that the plan is tanked forever and doesn’t come back - as it probably will - as some sort of re-animated Build Back Better shambling zombie plan.

The Democrats, of course, claim that the plan is fully paid for. This is a ludicrous claim for many reasons that aren’t even considered by the CBO, which estimates the bill will add $367 billion to the national debt. The CBO is committing one of the classic blunders: it believes the government. It accepts what the government tells it and spits out the number. Of course, it has to. It’s bound by Congressional rules. It is the Congressional Budget Office, after all.

The Penn Wharton Budget Modelers don’t have to believe the government. They feel pressure to drink the government kool-aid, sure - have you tried to get academic funding these days without the federal government being involved? - but they still maintain enough integrity to show their work.

The first thing you’ll see in that Budget Model on the Build Back Better Plan is the boxed headline. There, they say that the bill will only add $274 billion to the debt over ten years. But that’s just to placate their grant-awarding overlords. Further down, where they’ve buried but not quite yet suffocated their honesty and their conscience, you find the $4.5 trillion figure that Manchin, the WSJ, and everyone else knows is much closer to the real cost.

There are two important lessons we can take from the Penn Wharton analysis.

One, they list as a “budgetary offset,” that is, a fundraiser like a higher tax rate, an expenditure of $80 billion at the IRS over the next decade. The thinking is that spending $8 billion extra per year at the IRS will enable the vampIReS to enforce the tax laws better and collect on the $7 trillion that Larry Summers says is owed to but not collected by the federal government. To that I say, Ha! The current IRS budget is about $12 billion per year. And we’re going to increase this by 66%? Really? That is an enormous increase. Why do they deserve it? Because they’re doing such a great job? Because you walk down the street and you bump into the average American voter and he says, Hey, great cheesedogs but you know what we really need, a vastly larger and more powerful IRS? Give me a break. No one says that, no one wants that. Hold on Frank, you say. Sure, the IRS doesn’t deserve a 66% raise, but we need to give it to them to get them to work better. No. That is not how government spending works. Remember this?

This isn’t Sky Phantom fireworks’ mail-order catalog from 1985. You don’t get two extra bricks of black cats and an M-80 when you order $100 or more. There are no guarantees here. At the very least, if you’re going to spend more at the IRS in hopes that more revenue will be generated, maybe try increasing their budget by 10%. Maaaybe 15%. An increase of 66% is not serious. At that point, you’re saying it’s all just sheep/wood/wheat/bricks/ore. You’re just playing a game. Finally note the perversion here: in a free market, the incentive is to do better so that you will receive more money. People in a free market pay for what is working well; what doesn’t work well loses money and dies. Here, though, the incentive is for the IRS to do poorly so that it will receive more money. People in the bureaucracy look at a problem and say oh, this area is a problem, we need to spend more here; what is already working well doesn’t receive any more money.

The second thing to note about the Wharton analysis is that it says right up there in the wink-wink-nod-nod box that the plan is expected to decrease GDP by 0.2 percent in 2050. Given that the wink-wink-nod-nod box is off by an order of magnitude when it comes to the debt, we can imagine what we’re dealing with in terms of the GDP. But even if you take the wink-wink-nod-nod box’s 0.2% GDP hit at face value, that is still devastating. How so? Think of it in terms of climate change costs. The estimates of the cost of climate change have been going up almost as fast as pitch of the hysterical shrieks from Greta Thunberg and her ilk as the world has carried on ignoring them. In 2008, climate change was going to cost the US 1.8% of GDP by 2100. In 2018, the estimate was up to 10% by 2100, and in 2021 the estimates of climate change costs are that the US will lose 10% of its GDP by 2050. (I guess we were really super bad at predicting 10 years ago and 3 years ago, good thing we have that all figured out now, I’m sure we can trust these new predictions.) But even if you take the worst case predictions of 10% by 2050, and even if you take the obvious lie of 0.2% GDP hit in the wink-wink-nod-nod headline, the numbers still say this single bill is 1/50th as bad as the entire impact of the most pessimistic climate change prediction. Given that many people see climate change as an existential risk, how can they justify this bill? Oh, it’s only 1/50th as bad as total annihilation, let’s go for it!

And that 1/50th is with the please-don’t-take-our-grant-money estimates. If only the Penn Wharton people had the guts to include an estimate of the GDP impact with the real numbers… oh wait, they did! Snaps to you, Penn Wharton people. Respect.

Look at the third bullet point under the wink-wink-nod-nod headline box. “In an alternative, illustrative scenario… GDP would fall by 2.9 percent” in 2050. That “illustrative scenario” is one in which government acts like government and doesn’t cancel all the programs in BBB after one year. In other words, the 2.9 percent GDP hit by 2050 is the real estimate.

Hold on Frank, you say. You’re telling me that our pessimistic climate change cost forecast is 10% of US GDP by 2050, and this single bill is equal to 1/3 of that?

Yep. That’s what I’m telling you. And we haven’t even made it out of 2021 yet. Do you think we won’t have a few other whoppers like this before 2050? Hell, we’ll have at least one or two more whoppers before 2030, if we’re being honest.

There are two ways to take this. One is to say, yikes, this bill must really suck because climate change is the Doom that Came to Sarnath only worse, and this bill is 1/3 of climate change’s cost. 1/3 of ultimate Doom is still too much Doom. The other is to say, uh wow, this bill kinda sucks but on the other hand maybe climate change isn’t going to be quite that bad. After all, it’s only three times more costly than the spending bill here, and this bill arguably isn’t as bad as the spending they’ve already done to fight covid last year.

Either way, someone needs to throw Joe Manchin a Dance Party.

2. The South China Morning Post, which is not exactly the Hong Kong Free Press, reports:

Pro-Beijing tycoon Charles Ho Tsu-kwok, the former chairman of Sing Tao News Corporation, has strong words for Chief Executive Carrie Lam Cheng Yuet-ngor’s performance after casting his ballot as an Election Committee member.  

“She has done more harm than good to Hong Kong,” he says. “I am urging her to learn about her own limitations and not to seek re-election.”

That’s quite a statement. Lam might be losing support (again?) in Beijing. From my perspective, the Chinese takeover of Hong Kong has gone reasonably well the last couple of years. Sure, the stock market is way down and the optics were terrible in yesterday’s shame elections, with under 30% turnout and an obvious slate of “you can only vote for the CCP” candidates. But the world has been mostly distracted, and China hasn’t taken nearly the reputation hit that it could have (should have, imo) taken for devouring Hong Kong while a pandemic of Chinese origin swept the world. Maybe Beijing still has it in for her after the freedom protests several years ago. Would love to hear from CCP experts on this one.

3. The White House is talking down to the unvaccinated again.

Our vaccines work against Omicron, especially for people who get booster shots when they are eligible.  If you are vaccinated, you could test positive.  But if you do get COVID, your case will likely be asymptomatic or mild.

We are intent on not letting Omicron disrupt work and school for the vaccinated.  You’ve done the right thing, and we will get through this.

For the unvaccinated, you’re looking at a winter of severe illness and death for yourselves, your families, and the hospitals you may soon overwhelm.

Reminds me of the coach from Mean Girls: “If you touch each other, you will get chlamydia and die.” I mean the White House is making a pretty strong statement for a disease with a case fatality rate somewhere around 1%. And that’s not adjusted for age. Maybe someone should tell Biden that if he wants to build trust, making obviously exaggerated statements meant to frighten people into obeisance is not a good way to do it.