According to a new study from Stanford University’s Hoover Institute, Joe Biden’s agenda will have a number of catastrophic economic consequences for Americans trying desperately to get back on their feet after the COVID recession. The economists behind the study say that Biden’s policies – which include raising taxes and expanding regulations – will ruin labor incentives, lead to decreased productivity throughout the country, and take millions of jobs completely out of the economy.
In an analysis of the study, the Wall Street Journal wrote: “The risk from Joe Biden’s policies isn’t that they will send the economy reeling right away. The problem is that they will have a long-term corrosive impact by raising the cost of capital, reducing the incentive to work and invest, and reducing productivity across the economy. Americans will pay the price in a lower standard of living than they otherwise would—and that they deserve.”
The Hoover Institute study found that Biden’s agenda will lead to 4.9 million fewer jobs by 2030 alongside an overall shrinking of the economy by $2.6 trillion. Bringing this down to the micro-level, it means that the average family will see a loss of $2,600 in annual income as a direct result of Biden’s policies.
In their executive summary, the economists outlined their three major conclusions:
First, transportation and electricity will require a lot more inputs (including 1.3 million net additional energy workers) to produce the same outputs because of Biden’s ambitious plans to further cut the nation’s carbon emissions. Because these industries are a nontrivial share of the overall economy, that means 1 or 2 percent less total factor productivity overall. These effects would be significantly larger —likely dwarfing the (nontrivial) rest of the agenda—if the energy goals are taken literally. The costs would also be concentrated geographically.
Second, labor wedges (the amount of the value created by additional work that goes to third parties) are increased by proposed changes to regulation as well as to the Affordable Care Act (ACA). The quantitative findings for the ACA should be no surprise given the findings from previous efforts in the United States and other countries to expand health insurance coverage.
Third, Biden’s agenda reduces capital intensity by increasing average marginal tax rates on capital.
This just isn’t what the country needs at a time of uncertain economic troubles. Trump has proven that his policies have the power to bring our economy roaring back from the coronavirus, just as he proved how restrictive Obama’s policies were in helping us recover from the Great Recession. To put Biden and his Obama-like policies in command of the economy is to doom the country to four/eight years of financial malaise.
We can’t afford it.