Biden’s Keynesian Course: Riding the ‘Multiplier’

by | Dec 9, 2021

Biden’s Keynesian Course: Riding the ‘Multiplier’

by | Dec 9, 2021

by Unknown photographer, bromide print, 1933

White House Chief of Staff Ronald Klain tweeted on Wednesday: “Stronger COVID measures produce STRONGER ECONOMIC outcomes.  That’s why jobs, growth, and economic activity are UP this year, significantly over last year.”

Actually, jobs and economic activity have rebounded because governors are no longer locking down businesses, schools, and daily life. But Biden’s team is painting its latest COVID decrees as the key to renewed prosperity.

Biden’s team is tacitly invoking a long history of multipliers to justify government interventions. In the 1930s, John Maynard Keynes popularized the notion of economic multipliers, touting the Egyptian pyramids as a model for government creation of prosperity. (Keynes omitted citing any surveys of the slaves who built the pyramids.) Henry Hazlitt, one of Keynes’ most astute critics, noted that for Keynes, multipliers “really mean any addition to [government] spending for any purpose.”

Multipliers pass muster because Washingtonians view government spending as magic beans that automatically sow blessings across the nation. For instance, Obama administration officials claimed that its 2009 stimulus program would produce $1.57 in economic activity for each dollar spent, that food stamps generate $1.84 in economic activity per dollar of handouts, and that each dollar of unemployment benefits produces $2 in economic activity. It is considered bad form to ask too many questions about the calculus behind the cornucopia.

But what about Biden’s “stronger COVID measures?” Is there any reason to expect the latest commands will be multipliers for prosperity?

Biden announced on Thursday that private insurance companies will be compelled to cover the cost of at-home COVID tests. This will not carry a hefty price tag, but the effect will be paltry compared to the harm of the Food and Drug Administration’s blocking mass availability of cheap at-home COVID tests (such as are widely for sale in Germany).

Biden’s latest initiatives presume the feds are blameless for any chaos or disruptions caused by prior Biden COVID edicts. Biden will triple the number of federal “surge response teams,” teams for badly overworked hospitals and emergency rooms. But the mass firing of unvaxxed nurses and other health care personnel, thanks to the Biden vax mandate, has caused far more problems than any Biden surge team can repair.

In his speech, Biden tub-thumped for all adults to get a third COVID vaccine injection after the failure of the first two to prevent surging infections and hospitalization. Vax failure is also the premise of a new Biden requirement for all people traveling to America to show a negative COVID test within 24 hours of departure, regardless of whether they are fully vaxxed. Biden is ramping up the pressure for boosters despite the warning (published in Monday’s Washington Post) by FDA’s former top vaccine experts that “the push for boosters for all could actually prolong the pandemic.” (The experts recently resigned thanks to White House pressure to rubber stamp approval for more COVID injections.) According to the Washington Post, CDC chief Rochelle Walensky also did not support Biden’s plan to push all adults to get a third COVID injection.

Biden claims that the U.S. has made great progress in its efforts against COVID-19. But the Centers for Disease Control recently estimated that almost 150 million Americans have been infected with COVID. Even though there are more than 145 million Americans who recovered from COVID, Biden policymakers still pretend that natural immunity doesn’t exist.

Biden is desperate because his credibility on COVID is waning faster than a Pfizer vaccine. Despite Biden’s ascension to the Oval Office, more Americans have died of COVID this year than in 2020. Biden campaigned last year as St. Joe promising to slay the COVID dragon that a reckless President Trump had permitted to kill vast numbers of Americans. “I will end this pandemic,” he promised in an October 2020 debate with Trump. In a speech on the day before Election Day, he declared, “We’re going to beat this virus. We’re going to get it under control, I promise you.” In his January 20 Inaugural Address, he promised to “defeat the virus.” In a July 2021 CNN Town Hall, Biden promised, “You’re not going to get COVID if you have these vaccinations.” All of those pledges are now on a junk heap of false political promises.

The title of Biden’s presentation on Thursday was “COVID-19 Winter Plan.” Perhaps Biden is hoping Americans have forgotten that he basically proclaimed victory over COVID on July 4th. Biden admitted, “Experts say the COVID-19 cases will continue to rise in the weeks ahead and this winter.”

The White House has far better data on Biden’s polling on handling COVID than on the number of so-called “breakthrough” COVID infections among the fully vaxxed (which the CDC ceased counting in May). Neither the White House nor any other federal entity has solid safety data on the impact of giving a third (or fourth) COVID injection. But potential long-term harm is irrelevant for a president who has had one of the sharpest falls in popularity in modern history.

At this point, any COVID dictate that would temporarily boost Biden’s approval ratings might qualify for “emergency use authorization.” When asked whether Biden would ban unvaxxed Americans from taking domestic flights, Biden COVID Czar Jeff Zients replied, “We will continue to look at all options – everything is on the table.” Would Biden consider imposing more lockdowns or even an Australian-type system of detention camps? Federal appeals courts have thrashed Biden’s vax mandate but the president continues to talk as if he has the moral authority to decree what goes into every American’s arm. Biden remains surrounded by advisors such as Fauci who believe that “science” (which, luckily for Americans, Fauci incarnates) justifies any restriction that government appointees approve.

The problem with multipliers is that there is no harmony of interest between the rulers and the ruled. Keynesian-style economic multipliers permit politicians to seize more power (via deficit spending) while citizens are burdened with more government debt to finance. With COVID, new mandates might temporarily boost Biden’s popularity (especially with the media) but will leave citizens less free. And the federal record since early 2020 does nothing to inspire confidence that further episodes of Pandemic Security Theater will keep us safe.

This article was originally featured at the American Institute for Economic Research and is republished with permission.

About Jim Bovard

Jim Bovard is the author of Public Policy Hooligan (2012), Attention Deficit Democracy (2006), Lost Rights: The Destruction of American Liberty (1994), and 7 other books. He is a member of the USA Today Board of Contributors and has also written for the New York Times, Wall Street Journal, Playboy, Washington Post, and other publications. His articles have been publicly denounced by the chief of the FBI, the Postmaster General, the Secretary of HUD, and the heads of the DEA, FEMA, and EEOC and numerous federal agencies.

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