Thank you Senator Joe Manchin. Every American should appreciate that Senator Manchin was the one Democrat that refused to follow Senator Bernie Sanders and Alexandria Ocasio-Cortez (AOC) over the cliff of no return. They believed that they could bully him into going along with them to get along. Manchin probably saved the Democrat Party from itself. Passage of “Build Back Better” would not have done anything positive for the financial future of our nation or your family.
What it would have done is continue to drive inflation even higher than we are currently experiencing. The current rate, the worst in forty years, is bad, but the unbridled spending would shock everyone. Just look at countries like Venezuela and now Turkey, where government has tried to dictate economic policy. The end result is inflation that is destroying the savings of those who have restrained their spending, saving for their retirement.
What Is Included
Universal child care for three and four year olds. Providing this benefit might allow parents to return to the workforce earlier. Parents would be allowed to choose between government or private care. If they choose private, the parents will have to pay the full cost, while the public attendee’s family would be paid for by taxpayers. Currently, fully staffing at daycares is impossible.
Expanded Medicare and Medicaid
Is another noble sounding idea. Currently, these programs are overwhelming the federal and state governments’ ability to afford them. Virginia’s budget for Medicaid is now 23% of our General Fund. Adding more services will worsen the situation. Meanwhile, because of low reimbursement rates to providers, doctors will restrict the number of these patients they see.
Three Months of Paid Parental Leave
Is another great perk for those working. The cost, however, would be passed on to consumers. Large companies can survive by raising prices. Smaller companies would be placed in an untenable situation. They currently operate on smaller margins of profit. This would be another challenge. Meanwhile, if employees are paid while not working for three months, replacements must be hired. Since the original employee is guaranteed a job when they return, those replacements will then have to be let go. Knowing their position will be short term, the replacements are likely to continue to seek a more permanent job elsewhere. Expenses incurred with training them will go for naught in months or even days.
Many small businesses would not be able to compete with these new expenses. Less marketplace competition will result in higher prices and greater inflation.
This is one benefit that would not be available to most of us in our region for the foreseeable future. If one were to buy an American made electric car by 2027, the taxpayers would pay up to $12,500 for tax credits. Most do not live close enough to charging stations for this to be a practical option for us. Those that do will quickly learn that those manufacturers that qualify to supply these vehicles will not offer discounts, selling at list price. Therefore, a chunk of the expected savings will make the car factories more profitable.
Eventually, our region will have charging stations, or one will have expensive rewiring of their home. Because of the expensive capital costs associated with building electric charging stations, many traditional gas stations and convenience stores will be pushed out of the market.
Who Pays For These and Other Freebies?
Of course, President Biden and his allies think citizens are too stupid to see that they would be paying for these benefits and freebies as both consumers and as taxpayers.
His plan calls for an increase in corporate taxes. His plan would raise taxes on corporations by over twenty percent. In turn, those taxes would be passed on to consumers. For those who have wisely invested for their future in corporations, they would have to pay a second time with an additional twenty percent increase in the profits earned from those investments. This includes everyone who has any type of pension plan. That forty percent will harm the economy!
Maybe Senator Manchin can educate Virginia’s Mark Warner and Tim Kaine a little bit. Things like good economic policy is better than pandering to select groups while passing the tax bill to our children and grandchildren.
We love to hear from you! You can reach us at Sen.Ruff@verizon.net, 434-374-5129, or P.O. Box 332, Clarksville, VA 23927.