Froma Harrop

What matters is not just the sum by which presidents jack up the deficit. It’s what the money is spent on.

Franklin D. Roosevelt added more to the national debt by percentage than any other president. America needed that borrowing to dig itself out of the Great Depression and then win World War II. The spending was necessary.

Money can be allocated in unlimited ways, but where it goes can make a huge difference. Pat might invest $100,000 on a new truck for his delivery service or blow $100,000 for a cruise around the world.

No judgments here on Pat’s priorities. How Pat spends his money is his own affair, and we can all use some time off.

However, an investment in a business can produce new wealth down the road. Money sunk into a cruise may create lovely memories (and perhaps income for the ship’s bartender), but the bucks are no longer there to build Pat’s business.

Donald Trump added $8.4 trillion to the national debt over 10 years. Some of it, $3.6 trillion, represented necessary outlays for COVID relief, but $2.3 trillion came from other spending, and $2.5 trillion from the tax cuts.

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The Trump tax cuts were supposed to pay for themselves and then some. They didn’t. Of course, they provided some economic stimulus, certainly via higher stock values — though, we shall note, the market indexes are higher now under Joe Biden than they were under Trump.

The economic boost from the tax cuts was obviously not nearly enough to cover the lost revenues. But face it: That’s not what the tax cuts were ever about. The week after he was elected president in 2016, Trump traveled the handful of blocks from Trump Tower to the exclusive 21 Club and announced to the swells dining therein, “We’ll get your taxes down.” That’s what the tax cuts were about.

Government spending also stimulates the economy. Biden’s $1 trillion infrastructure bill has launched 40,000 projects to fix roads, bridges, drinking water, internet access, public transportation. These are investments in America’s economic foundation, not to mention Americans’ comfort.

The Inflation Reduction Act helped create over 170,000 clean-energy jobs at a cost of $391 billion over 10 years. It has supercharged the program to produce alternative energy sources, especially solar and wind. The Energy Department projects that by 2030, the program will have saved American families up to $38 billion in home electricity bills.

The popularity of the clean energy tax credits will have a significant environmental impact, according to the Congressional Budget Office. The CBO estimates that by 2030, the bill could cut emissions by as much as 40% from 2005 levels.

The economic value of a program that slows climate change can’t be fully measured yet. But homeowners who face soaring property insurance premiums due to floods, hurricane winds and fires associated with warming weather should appreciate the possibilities.

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The CHIPS and Science Act authorizes about $280 billion for domestic research and growing the U.S. semiconductor industry. The building blocks of a modern economy, computer chips are the little brains operating vehicles, consumer electronics and computers.

The CHIPS act ensures America an adequate supply of advanced semiconductors. Biden may have stopped China’s march to global dominance in computer chips.

America now has the world’s strongest economy. The Federal Reserve is pretty much done raising interest rates. That is positive news for real estate and other investments. Consumer confidence recently made the biggest monthly jump in 30 years.

Let’s stop obsessing on how much Biden is spending, and even how much Trump spent, and start focusing on what the spending was for. That matters, does it not?

Froma Harrop can be reached at fharrop@gmail.com.


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