The U.S GDP was $22.7 trillion at the end of September 2021, and the U.S. Federal Debt was $28.4 trillion. This gives an extremely dangerous ratio of debt over GDP of 125 percent. Godman Sachs estimates 2022 GDP to grow 4.0 percent to $23.6 trillion.
The Biden Administration estimates a 2022 Budget deficit of $1.5 trillion. This is probably far below the actual figure given recent analysis by the University of Pennsylvania-Wharton Business School, but would increase U.S. debt to at least $29.9 trillion, a ratio of at least 127 percent. My own estimate justified by Wharton statistics is that the 2022 Budget deficit will be closer to $2.0 trillion and raise Federal Debt to $30.4 trillion or 129 percent of GDP, and considering an amnesty is included in the legislation, may be quite conservative. Amnesties are budget-busters and usually far larger and more expensive than anticipated.
Biden’s latest “Build Back Better” proposal on November 2, pared down from the original $3.5 trillion request, would expand Medicaid, establish universal preschool, provide new funding for childcare, and offer green energy tax credits, though it notably omits progressive priorities like free community college and Medicare coverage of dental and vision. Biden’s revised plan came to $1.75 trillion over 10 years—of which you can bet actuals will exceed budget on the front-end and will not stop after 10 years. However, a University of Pennsylvania-Wharton Business School analysis published the next day estimated the new Biden plan would cost just short of $4.0 trillion over the first 10 years. Again, you can expect actual expenditures to be more front-end loaded than budget in the first few years, and actual costs will extend annually far past 10 years and keep growing.
The Congressional Budget Office (CBO) only extends its analysis for 10 years, but the spending goes on and on. The Biden budget assumes just one year spending on several social programs, but the Wharton analysis points out that popular one-year programs are hard to cut off, and Democrats have a strong tendency to keep extending them. For example, Biden’s proposed temporary, one-year extension of the expanded child tax credit, which provides up to $3,600 per child to families, is budgeted at $100 billion annually. However, Biden and the Democrats in Congress have been pushing for a permanently expanded child tax credit, which Wharton estimates would cost about $1.6 trillion.
At a recent news conference, Democrat Senator Joe Manchin of West Virginia, remarked,
“As more of the real details outlined in the basic framework are released, what I see are shell games and budget gimmicks that make the real cost of this so-called ‘$1.75 trillion dollar’ bill estimated to be twice as high if the programs are extended or made permanent. That is a recipe for economic crisis.”
According to the Wharton analysis, If Biden succeeds in passing this proposal along with a $550 billion bipartisan infrastructure increase, Congress will have approved a staggering $5 trillion in spending in the less than one year since he took office, an unprecedented level. The nation’s debt level is already at a historic high of $28.4 trillion and is on track to surpass $30 trillion. In another recent report, Wharton estimates that only $145 billion of the so-called bipartisan infrastructure budget is actually for public works.
The newest “Build Back Better” proposal would expand Medicaid, establish universal preschool, provide new funding for childcare, and offer green energy tax credits, though it notably omits progressive priorities like free community college and Medicare coverage of dental and vision. Despite Biden’s shameful claim that the cost will be zero—because of purely speculative and unlikely economic gains—it relies on $1.95 trillion in new taxes, including a 15% corporate minimum and a surcharge aimed at ultra-millionaires. But under Wharton’s more realistic cost estimates, these tax increases would only cover half the costs and would probably hinder economic growth.
For this reason, my estimate is that the Biden 2022 Budget deficit will be closer to $2.0 trillion and drive Federal Debt to $30.4 trillion or 129 percent of GDP.
At the end of Ronald Reagan’s second term as President, his Attorney General, Ed Meese, asked him what the greatest mistake of his tenure as president had been. Reagan replied that it was signing the 1986 amnesty for illegal immigrants.
Reagan was told by Democrats and some moderate Republican senators that there would only be about 1.0 million amnesties, and the legislation would include enforcement measures that would end most illegal immigration. Because of fraud and lax vetting, the actual number of 1986 amnesties was 2.7 million, almost three times the estimate. Not only that, but six supplemental amnesties followed that brought the total to 6.0 million. Moreover, then Congressman Chuck Schumer and his Democrat and establishment Republican colleagues succeeded in blocking immigration enforcement measures. Illegal immigration was not stopped. Amnesties encourage more illegal immigration. According to the Federation of Americans for Immigration Reform (FAIR), there were at least 14.3 million illegal immigrants in the United States in 2019. Many other estimates exceed 20 million. Twenty million is now probably a conservative estimate. You do the math. Will 8 million amnesties actually be 24 million or more?
There is no way the Biden Administration can hold amnesties to 8.0 million, and they doubtless have no intention of limiting amnesties at all. The Biden Open Door immigration policy has resulted in well over 1.7 million illegal immigrants this year, and the transparent goal of the Democrat Party is to make them voters. Six million amnesties following the 1986 Amnesty have resulted in over three times the number of new illegal immigrants. You do the math. Twenty-four million amnesties could result in 72 million new illegal immigrants, perhaps within a single decade. Since the Biden scheme is Open Door Immigration and voting citizenship and plenty of free benefits for illegal immigrants, 72 million might actually be conservative, if the U.S. can survive another decade under such foolish and lawless policies.
Amnesties and illegal immigration are tremendously expensive and hurt American workers and taxpayers. FAIR estimated 14.3 million illegal immigrants cost American taxpayers a net $132 billion per year in 2019. According to a Heritage Foundation study in 2012, based on 2010 data, the average unlawful immigrant household costs American taxpayers $14,387 per year. Newly amnestied households receiving full benefits would cost taxpayers almost double–$28,000 per year. On retirement, each individual amnestied illegal immigrant on social security would cost taxpayers $22,700 per year. The Biden proposal is suggesting immediate full benefits for all. The annual cost per individual illegal immigrant according FAIR would be $9,231 per year, with no adjustment for full benefits. The two studies are too different to reconcile exactly, but the bottom line is that the Biden Amnesty will not be limited to 8.0 million, and it will start huge secondary waves of illegal immigration and further amnesties. My own estimate is that costs would start at about $360 billion per year and grow like mad until hyperinflationary collapse.
The fiscal costs of illegal immigration and amnesty, however, is much smaller than the damage to American workers because of suppressed wages. A 2013 study by Harvard economist George Borjas found that cheap immigrant labor suppressed the wages of American workers by $402 billion per year. This is probably well over $500 billion per year now. Although the net effect of immigration was favorable by $35 billion, it masked the huge transfer of earnings of American workers to illegal immigrants and huge profits for employers of illegal immigrants. This is an economic situation very comparable to historical slave labor. American middle class and blue-collar workers will get the worst of Biden economics with high inflation, falling real wages, higher taxes, higher unemployment, and employment discrimination.
The budget that just passed the U.S. House is said to be 12,000 pages long. Few had time to actually read it. You can bet it is stuffed with goodies for sustaining Democrats in power and ugly surprises for American workers and taxpayers and those who treasure traditional American values. Other legislation buried in the budget places fair elections at risk.
Besides the pain of rising prices and chaotic economics, our freedoms are increasingly threatened. Our educational institutions are indoctrinating our children with shallow and destructive economic fantasies and harmful nonsense about race and gender. Most of the news media is in lockstep with this nonsense and sweeping political corruption. Our Armed Forces personnel are being bullied and purged to advance demented versions of social justice. Public health policy and public health are being severely damaged by politicized science. Socialism and Social Marxism do not build; they abandon wisdom and destroy. We must take our country back from lawless, one-size-fits-all, control-mad power fanatics.
“At a time when liberty is under attack, decency under assault, the family under siege, and life itself is threatened, the good will arise in truth; they will arise in truth with the very essence and substance of their lives; they will arise in truth never shying from the Standard of Truth, never shrinking from the Author of Truth.”—Henry Laurens, South Carolina, (1724-1792), key Revolutionary War political leader.