Letter to the Editor: The truth about Biden's relief plan

In his opinion piece (Patriot, May 6, 2021), Steve Chapman argues that the $4 trillion in relief doled out under the Trump administration was justified, but that the $6 trillion proposed by the Biden administration is not, because “the emergency has subsided.”

Has it? Millions of Americans are still out of work. Moreover, the climate emergency shows no signs of easing.

Mr. Chapman referenced the Penn Wharton Budget Model that found that increasing the tax rate on capital gains would reduce revenue. That reminds me of Reagan’s (and more recently Trump’s) claim that lowering taxes would increase revenue and balance the budget. History shows otherwise.

Moreover, the claim that “over the first decade, Biden’s infrastructure package would cost $600 billion more than it would bring in” must be put in context. That works out to $60 billion a year, compared to the $628.6 billion spent on national defense.

Mr. Chapman claims that “piling more federal debt...is bound to divert funds that would have gone to private investment, to the detriment of the economy.” Where does Mr. Chapman believe that the money is being diverted? Spending on infrastructure, etc., does not leave the economy; it stimulates the economy, hence the term “investment.”

More wisdom from Mr. Chapman: “The budgetary binge may also lift inflation to levels that Americans have not seen since the 1980’s.” Really? Wasn’t Mr. Chapman just arguing that more federal debt was going to divert funds from private investment, slowing the economy?

Paul Krugman recently argued that government debt tends to LOWER inflation. He offers as evidence not only recent U.S. experience, but also that of Japan, whose accumulated debt equals over 266% of its GDP. Far from experiencing inflation, the central bank in Japan has been fighting deflation for the past 30 years.

So whom to believe—Mr. Chapman, or the guy with a Nobel Prize in economics?

Bill Niemand
Downey