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Biden’s faulty economic policies only benefit the lowest income earners

As I listened to Democratic presidential candidate Joe Biden, who recently spoke in Wisconsin, I heard his plans for helping the bottom 15% of income earners. It’s notable that none of Joe Biden’s faulty economic policies, including this one, actually help the vast majority of Americans. In fact, since he wants to give things to people who can’t afford to buy them, it’s the people who can afford to buy what they need who would be forced to pay for his bizarre economic policies.

Reforming the criminal justice system. Joe never did that.

With his long record of claiming to support policies that somehow never make it into legislation, Joe Biden’s faulty economic policies will likely meet a similar fate. Let’s take prison reform as an example.

Biden says he wants to reform the criminal justice system. Instead of just punishing a criminal, he wants to rehabilitate the criminal as well. Theoretically, at least, this assumes that after time served, the former criminal can easily re-enter society and become a productive member.

Everyone would favor that.

But why didn’t Biden push that kind of legislation when he was Vice-president? Or in the decades he spent as a Senator from Delaware?

Once again in the Obama years, his party held the presidency, had a majority in the House of Representatives and a supermajority in the Senate. Yet Biden did nothing to reform prisons.

… But President Trump got Congress to pass the First Step Act.

By way of contrast, in December 2019, President Trump convinced Congress to pass the First Step Act, truly the Federal government’s first step toward prison reform. Without any previous experience as an elected official, Trump somehow managed to work with a GOP Senate and a Democratic House of Representatives to pass this legislation. He promptly signed it into law. Where had Joe been all these years?

Biden’s faulty economic policies begin with the Democrats’ phony “living wage.”

Now, Joe Biden wants to turn his legislative sins of omission into sins of , particularly when it comes to imposing damaging and disruptive economic laws, rules and regulations.

Biden says he wants a national $15 minimum wage. He calls it a “living wage.” He says that nobody should have to work two jobs just to make ends meet. At $15 per hour, the total income earned would allegedly put a family of four above the poverty line. Biden says they deserve that.

Of course, the problem is that a wage of $15 per hour translates into an annual labor cost to the employer of more than $33,000. How many jobs would be available for a worker who has absolutely no skills but still cost the employer $33,000 annually?

Minimum wage jobs are supposed to be entry-level positions where unskilled workers can gradually learn a useful skill. But by raising the minimum wage to an arbitrary $15 regardless of skills, the nation would quickly experience a large reduction in opportunities for unskilled workers. Businesses employing them — fast-food restaurants, for example — would replace them with automation. Or close, as many did in Seattle and San Francisco, which arbitrarily imposed a mandatory, phased-in $15 minimum wage. The result is predictable. This misguided policy guarantees that those who really need the entry-level opportunities can no longer find them easily, if at all.

Raising the minimum wage may help a small percentage of the population. But the majority will have to pay more in higher prices for products and increased welfare spending for all those who can’t find work. It’s simple economics. The much-ballyhooed $15 minimum wage is greater than the value of the entry-level worker’s output.

Billions and billions for a “fair share” that’s never defined.

Biden spoke of a number of areas where the government would spend billions more to help lower-income families. “No one should pay more than 30% of their income for housing.” Like nearly everything on the Democrat wish-list, that policy sounds good.

He said he would pay for it by raising taxes on the top income earners. “They should pay their fair share.” But he has never defined what “fair share” actually means. That’s typical of Biden’s faulty economic policies.

Biden said he would raise taxes only on Americans earning more than $400,000 per year. That’s less than 2% of all income earners. Even if they were taxed at nearly 100% of income earned, the government would still fail to gain anything close to enough revenue to cover his lavish social spending programs. That means taxes would go up for nearly all Americans.

He promises he will lower taxes for lower-income earners. The problem is that the bottom 47% of income earners pay no federal income tax at all.

Social Security and Medicare? Biden’s faulty economic policies to the rescue…

By committing to all of these spending programs, Biden would need to raise not only income taxes. He would eventually need to raise Social Security and Medicare taxes as well. Already, nearly all American workers pay 15.3% of their wages to cover those payroll taxes. The exact math: The worker pays 7.65% directly and the employer contributes an additional. 7.65% for each employee.

Biden’s entire economic platform aims to help the down-trodden. Meanwhile, the vast majority of Americans will have to pay more so that those low-income earners can get more. Biden is trying to convince the majority that they have an obligation to share their income. Most Americans seem to feel a sense of guilt and go along with him. But this is socialism: economic redistribution.

The result, as we’ve always seen in countries imposing creeping socialism, proves destructive to a country’s economic well-being. Taxing income earners and giving income to those who did not earn it will stagnate the economy. And it began to happen here during the Obama administration. That why economic growth averaged just 2% annually during the Obama/Biden years. Biden’s faulty economic policies, if enacted, would put America back on the path to decline.

Increased opportunity: The only way to increase American incomes and productivity

The real solution to helping low-income earners is to provide them with the opportunity to earn enough income to buy products to satisfy their needs. Taking income away from the majority that earned that income and giving it to those who did not earn it ultimately benefits anyone. Joe Biden’s faulty economic policies are not the right answer for the country. Or for American democracy.

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Michael Busler

Michael Busler, Ph.D. is a public policy analyst and a Professor of Finance at Stockton University where he teaches undergraduate and graduate courses in Finance and Economics. He has written Op-ed columns in major newspapers for more than 35 years.

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