The $1.9 trillion Biden plan? Turns out, that is the price of unity.

It was a scene out of a bygone era, a few weeks back, when ten Republican senators met with Joe Biden in the Oval Office to talk about the COVID relief package. The differences were substantial. $1.9 trillion vs. $618 billion. A trillion dollars is apparently a bridge too far for those ten Republicans. They were all for unity, but unity comes at a price. If unity is what Joe Biden wants, apparently he needs to take things down a bit. Into the billions, preferably. 

Decades ago, at a time when humor was still allowed in the nation’s capitol, Senator Everett Dirksen commented on how spending federal money can easily get out of control. “A billion here, a billion there,” the Illinois Republican quipped, “and pretty soon you're talking real money." It took the better part of a half-century, but ‘trillions’ finally eclipsed ‘billions’ as the metric of serious money in the wake of the 2008 financial collapse. Trillions of dollars lost as a housing bubble burst. Trillions of dollars pumped into the banking system by Congress and the Federal Reserve Bank. And, as things turned out, trillions of dollars of wealth created along the way for the wealthiest Americans.

Maine Senator Susan Collins, who spoke for the group of ten, seemed to be under the illusion that hers was still the Republican Party of Everett Dirksen. The GOP used to be the party of fiscal responsibility, that believed that balanced budgets were a moral obligation of leadership, as Dirksen’s quip hinted. But Ronald Reagan put an end to all that, as tax cuts became, along with judges and guns, the raison d'être of the Republican Party. It is not that people should not be concerned about the growing public debt; it is just that it is the GOP that destroyed the moral and fiscal rules that used to govern the public finances. For the modern GOP, the calculus of debt and deficits is as simple as it is cynical: They are a horrible, immoral scourge... if there is a Democrat in the White House. 

The past four years have been a case in point. After all, how could an extra trillion dollars be a bridge too far for Republicans who had pushed through a $1.5 trillion tax cut in 2017 for little ostensible reason other than to enrich their donor base? Nor had any of them uttered a word of protest as Donald Trump, who campaigned on a promise to pay off the national debt in eight years, instead ramped it up by nearly $8 trillion in four – the largest increase in the national debt relative to the size of the economy of any U.S. president other than George W. Bush or Abraham Lincoln. They were on board as Congress appropriated $3.5 trillion in Covid relief last year, on top of the $3.9 trillion made available by the Fed to shield corporate America from the turmoil unleashed by the pandemic.

But for that sordid history, the concerns raised by the group of ten about the Biden proposal might have gotten traction with colleagues across the aisle. That Republicans have become deficit hawks now that a Democrat is in the White House may be the height of hypocrisy, yet the word ‘trillion’ does have a way of spooking some people. Centrist Democrats, who assumed the role of debt scolds as Republicans retreated from their historical role as the grownups in the room on fiscal matters, continue to express trepidation about the sheer scale of the Biden proposal. Many fear that further stimulus spending could revive long-dormant inflation and question where the endgame lies with respect to the escalating national debt, while others simply suggest that limited debt resources would best be spent on infrastructure investment.

With vaccinations accelerating, a flicker of light visible at the end of the pandemic tunnel, and already-massive sums of Covid relief dollars flowing into the economy, estimates for economic growth have risen to the 6-7% range. Inflation concerns reflect an assessment of “output gaps,” which refer to the size of the economic hole that fiscal stimulus is designed to fill when an economy is underperforming. To the extent that the Biden plan exceeds the size of the current projected “output gap,” theory has it, those excess dollars will push the country into an inflationary spiral. 

If inflation fears are met with skepticism, however, there is good reason. Time and again, over the past several decades, many economists warned that inflation lay on the horizon, pointing to deficit spending, expansive monetary policies, and plummeting unemployment rates as factors that economic theory dictates must each ultimately lead to inflation. Indeed, federal deficits have averaged over $650 billion a year over the past twenty years – and closer to a trillion dollars a year over the past ten – driving the federal debt held by the public from $3.5 trillion to over $20 trillion. Over the same time period, the Fed has pushed interest rates toward zero across the yield curve, and flooded dollars into the economy at any sign of trouble. Yet, despite all that, and unemployment falling to historically low levels, the Consumer Price Index has remained in the low single digits for 30 years. Indeed, the Fed has struggled to push inflation up to its 2% target. 

Warnings of the consequences of our growing national debt similarly did not pan out as feared. In the wake of the Reagan tax cuts in the 1980s, growing federal deficits and federal borrowing were expected to lead inevitably to higher interest rates, ballooning interest costs in the federal budget, and squeezing out private investment. Instead, as long-term interest rates declined steadily over the ensuing decades, the interest cost on the national debt remained remarkably steady in dollar terms, and declined as a share of GDP. After reaching a peak of 3.2% of GDP in 1991, net interest costs in the federal budget declined dramatically, even as the national debt continued to grow, ultimately reaching a low of 1.2% of GDP in 2015. The Congressional Budget Office now projects that the interest cost on the federal debt will remain under 2% of GDP until the 2030s, despite federal deficits continuing to exceed a trillion dollars a year and a doubling of the federal debt over the next decade. Even fears that we were doomed to be increasingly dependent on China to finance our deficits as the national debt continued to rise have proven to be unfounded. While China remains one of the two largest holders of Treasury bonds – Japan is now the largest – Treasury yields remain near historically low levels, despite China’s not having increased the dollar amount of its holdings since 2012.

It has not been lost on a lot of Americans that economic policies over recent decades – whether intentionally or incidentally – have served to enrich the wealthiest Americans. In the wake of the 2008 financial crisis, both the Occupy movement on the left and the Tea Party movement on the right were animated by Wall Street bailouts, and both Donald Trump and Bernie Sanders ran for President in 2016 arguing that the system was rigged. And so it was. While inflation has remained low over the past quarter century as measured by the Consumer Price Index, inflation in asset prices has been rampant, as declining interest rates have pushed up the value of real estate, stocks, bonds, and other financial assets dramatically, increasing the net worth of America’s wealthiest families. 

While much attention has been paid to growing income inequality in the United States, disparities in wealth are even more pronounced. According to data from the National Bureau of Economic Research, from 1983 to 2016, the average net worth of the top 1% of households grew from $10.6 million to $26.4 million in real terms, an increase of 150%, and the top 0.1% of households grew from $43.3 million to $100.1 million in real terms, an increase of 133%. In contrast, the bottom 40% of the population saw their 1983 net worth of $6,900 decline to a negative net worth of ($8,900) over the same period. Looked at another way, in 2019, according to the Federal Reserve Bank of St. Louis, the bottom 50% of families – roughly 64 million families – had an average wealth of $22,000, which represented only 1% of total U.S. household wealth. This compared to $411,000 for the next 40% of families, and $5,716,000 for the top 10%.

“You all just got a lot richer,” Donald Trump told his friends as he arrived at Mar-a-Lago over Christmas in 2017, just days after he had signed his $1.5 trillion tax cut into law. There had been no economic rationale for the tax cuts. The economy was already steaming along, and there was no material “output gap” to be filled. Yet none of those gathered at Mar-a-Lago admonished the then-President about the possible downstream inflation that the $1.5 trillion of economic stimulus might produce, or ragged on him about tacking an additional 10% onto the national debt. And, of course, Susan Collins and her colleagues who met with Joe Biden in the Oval Office, voted for those tax cuts, and never once suggested that they would stand their ground and vote no because $1.5 trillion was just too much.  

Against that backdrop, should anyone be surprised that 68% of Americans support the $1.9 trillion Biden plan, as the latest Quinnipiac poll suggests. Or that 78% – including 64% of Republicans – support the proposed $1,400 stimulus checks. Could inflation be a problem? Perhaps, perhaps not. Is the national debt looming down the road? Surely. But for most Americans, apparently, the answer is simple. Someone is putting money into their pockets this time around, and they are all for it. Republicans complaining about Democrats doing something that is too big and too wasteful might consider the irony of their stance, and perhaps rethink their opposition to the Biden plan. After all, 68% of Americans supporting anything is the closest thing to unity we have seen in a long time. 

Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free." 

Artwork by Joe Dworetzky.  Follow him on Twitter @joedworetzky or Instagram at @joefaces. 

The Big Lie, not January 6th, is Donald Trump's greatest crime against democracy.

It’s over now. In the second impeachment trial of Donald Trump, 43 Senate Republicans cast their oath of office and oath as jurors to the wind, and decided to give the former president a pass on the charge of Incitement to Insurrection. The fact that he was guilty as charged went without saying. After all, incitement has been Trump’s modus operandi dating back to his Central Park Five days. Was Donald Trump guilty of incitement when he tweeted out “LIBERATE MICHIGAN,” and a MAGA militia heard his call to arms and promptly prepared to kidnap and kill Michigan Governor Gretchen Whitmer? According to the Senate Republicans, the answer is no: It is just how he rolls. 

Presently there remains the problem of whether we can find our way back to the status quo ante. Not the state of things before the impeachment trial, or even before the January 6th Insurrection, but to the world before Donald Trump. To a world where presidents see upholding the core institutions of our democracy as their most sacred duty, and the public at large accepts the results of elections. For all the death and destruction that ensued in the wake of Trump’s incitement of the January 6th attack on the Capitol, his greater crime was not incitement, but his continuing denial of the outcome of the election and undermining faith in our democracy.

On January 6, 1961 – sixty years ago to the day from the storming of the Capitol by supporters of Donald Trump – Vice President Richard Nixon presided over a joint session of Congress for the counting of the electoral votes from the 1960 presidential race. Nixon had just lost an excruciatingly close presidential election to Massachusetts Senator John F. Kennedy, and rumors of fraud were rife. 

It was a different, more opaque time. Unlike today, when widespread election fraud is “nearly inconceivable” – as Ohio’s Republican Secretary of State Frank LaRose argued recently – deals could be made and conspiracies hatched in smoke filled rooms, and no one might ever be the wiser. Rumors were widespread that ballot boxes in Texas had been stuffed by political allies of JFK’s running mate, Texas Senator Lyndon Johnson, tipping the balance to the Democrats; while in Chicago, it was either Mayor Richard Daley’s political machine or Joe Kennedy’s deal with Chicago mob boss Sam Giancana – or perhaps both – that had secured JFK’s victory in Illinois. Had those two states gone the other way, Richard Nixon would have won the Electoral College and the presidency.

It was against that backdrop that Nixon found himself – as Mike Pence did on January 6th and Al Gore had in 2000 – presiding over the final constitutional step in his own defeat. When the tabulation of the electoral votes was complete, Nixon reflected on the significance of the moment. “This is the first time in 100 years,” he observed to the gathered elected leaders from the two political parties, “that a candidate for the Presidency announced the result of an election in which he was defeated and announced the victory of his opponent. I do not think we could have a more striking and eloquent example of the stability of our constitutional system and of the proud tradition of the American people of developing, respecting, and honoring institutions of self-government. In our campaigns, no matter how hard fought they may be, no matter how close the election may turn out to be, those who lose accept the verdict, and support those who win… It is in that spirit that I now declare that John F. Kennedy has been elected President of the United States.” 

It never occurred to me before the past few months that democracy in America was anything less than immutable, and forever etched in stone. At some point in the distant past, I had read the Federalist Papers, and recalled the emphasis that James Madison placed on “republican virtue” as a cornerstone of our democracy. Yet, before experiencing the mayhem that Donald Trump inflicted on the nation over the past three months, and watching his enablers in Congress amplify his lies about electoral fraud, it never had occurred to me that democracy itself depended on such a simple notion as “those who lose accept the verdict.” Now, as we have seen the ease with which public opinion can be manipulated by social media and the news-entertainment complex, and a large percentage of one political party convinced of fraud claims made up out of whole cloth, the frail underbelly of our democracy has been exposed. For all the talk about the importance of the rule of law, our democratic system ultimately rests on a far shakier foundation: the vicissitudes of human nature and willingness – or not – of individual candidates to accept the results of elections. 

Democracy is not easy. Elizabeth Kübler-Ross famously described the five stages of grief as denial, anger, bargaining, depression and acceptance; the same can be applied to losing an election. Standing before the voters after losing a bruising campaign is a test of character that every person who runs for office has to be prepared to face. One moment, a years-long campaign is coming to its climactic moment, and then, in a sudden, clarifying instant, it is over. Then, even as the candidate is processing the shock of having lost – often after having run a race pointing out how the other candidate is one step short of being a spawn of the devil – they are expected to bring their supporters along, not just in accepting the fact of the defeat, but in congratulating the victor and offering their support. Such is the demand of Madison’s “republican virtue” of every candidate who chooses to enter the arena. And every so often, candidates with particular strength of character take it a step further. They remind their supporters, in the midst of their grief, that they are part of something greater than winning and losing. They are part of the historic American experiment in self-government.

There is no small irony in seeing Richard Nixon as a champion of the essential role of individual virtue in the viability of democratic self-government. After all, even as he celebrated the moment where he declared JFK the president-elect as evidence of our success as a nation in developing, respecting, and honoring institutions of self-government, it was the pain of losing that election that led, in a relatively straight line, to Nixon’s reformulation of the GOP from the party of civil rights to the party of southern and working class whites (his Southern Strategy), to the rising power of white evangelical voters within the GOP, to the election of Donald Trump, and, ultimately, to the January 6th Insurrection. 

Yet, even as we have witnessed the transformation of the GOP from the Party of Abraham Lincoln to the rise of Donald Trump as the candidate and president of seething resentments, there was nothing particularly new about the hatred embodied in his politics. Historians widely credit the election of 1800, which pitted the southern and rural populations that supported Thomas Jefferson against the urban and coastal elites who backed John Adams, as the nastiest in the nation’s history. And so it has been for the ensuing 200+ years. The names and alignment of the political parties may have changed, but partisan hatreds have remained with us. 

It is against that backdrop of a nation riven with sectarian divisions that honoring the will of the voters from one election to the next has been an indispensable obligation of political leadership. It is so basic that until recently, we have not been forced to grasp how elemental it is. On January 6th, just moments before the insurrectionists began their assault on the Capitol, Mitch McConnell made exactly that point as he sought to rein in mutinous members of his caucus, each of whom saw a path of personal advantage in continuing down Donald Trump’s perfidious path. To seek to overturn the verdict of the voters “would,” McConnell stated in no uncertain terms, “damage our Republic forever…. our democracy would enter a death spiral. We’d never see the whole nation accept an election again. Every four years would be a scramble for power at any cost.”

In his concession speech to George W. Bush in 2000, after the Supreme Court forced an end to the Florida recount, Al Gore quoted the words that Senator Stephen Douglas said to Abraham Lincoln in his 1860 concession speech. "Partisan feeling must yield to patriotism. I'm with you, Mr. President, and God bless you." Gore then mirrored those words with his own. “I say to President-elect Bush that what remains of partisan rancor must now be put aside, and may God bless his stewardship of this country….I also accept my responsibility, which I will discharge unconditionally, to honor the new President-elect and do everything possible to help him bring Americans together in fulfillment of the great vision that our Declaration of Independence defines and that our Constitution affirms and defends.”

Every Senate Republican knows these words, and knows their obligation. Yet this week, they did all they could to sidestep the obvious facts of Donald Trump’s incitement and duplicity, and once again showed their obeisance to a man whose conduct, time and again, has been destructive to the nation. He is not going away, and the stakes are only going to get higher. Trump's term in office may have come to an end, but his power over his MAGA movement – where love of Trump has replaced love of country – continues to grow. According to an American Enterprise Institute poll released this week, despite Trump’s losing virtually all 60+ cases in court – including the Supreme Court – and the testimony of leading constitutional scholars and Republican secretaries of state across the country, Donald Trump’s Big Lie about the election is deeply rooted. According to that poll, two-thirds of Republicans continue to believe that the election was stolen, and fully 40% believe that violence may be necessary to put things right in the nation. 

Since election day, we have heard that a civil war was looming within the GOP to wrest control from Donald Trump. Yet week after week, the loudest voices have been those of Ted Cruz, Josh Hawley, Rand Paul, and innumerable others, who understand exactly the treachery of their conduct, even as they are enabling Trump’s destruction of our democracy. Now the state parties are piling on to censure the conduct of any public official who strays from the MAGA fold. Our democracy is hanging in the balance. If there was going to be a civil war in the GOP, it had best begin soon. Or perhaps it is already over.

Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free." 

Artwork by Joe Dworetzky.  Follow him on Twitter @joedworetzky or Instagram at @joefaces.