Surprisingly, Congressional Democrats have managed to stop squabbling long enough to pass one of their priorities, the infrastructure bill. But though this is being touted as a victory for moderates and bipartisanship, the truth is that this legislation does little more than contribute to irresponsible deficit spending with minimal economic benefits.
A $1.2 trillion government spending package is a policy that was designed for last year and has failed to adapt to the times. In 2020, the pandemic had shut down businesses and the economy was hibernating well below its potential, facing an output gap of 15 percent of potential GDP. Congress had an appetite for a significant spending package, even one that added to the debt — after all, one of the reasons why fiscal responsibility in normal years is so important is to preserve the capacity to respond in times of crisis.
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