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Biden and the Democrats are Courting an Economic Implosion and Social Explosion with their Spending

Posted on Tuesday, May 25, 2021
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by AMAC Newsline
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56 Comments

AMAC Exclusive by Daniel Roman

economic chart with money

America’s economy is in serious danger of inflation fueled disaster, driven by the misguided, Keynesian policies of the Biden Administration. Prices for energy, transport, and construction are up, and electronics are nearly impossible to find, while the service sector is suffering a major labor shortage. All of this coexists with historic levels of unemployment. Yet rather than resolving these issues, the Biden Administration seems determined to pour more oil on the first, having passed a more than $2 trillion dollars in stimulus spending, pumping money into the economy at a time when savings are at an all-time high.

Even by the dubious standards of Keynesian economics, this stimulus was unnecessary. Americans have been trapped at home for almost a year, unable to travel, to eat out, or spend money on a host of activities. The problem with the economy was never a shortage of money, but a shortage of things to spend it on, and this was likely to be remedied as restrictions lifted with the vaccine program. By pumping more money in, Democrats and Biden caused the government to compete with otherwise more efficient private sector activity, contributing to the persistently high unemployment rates existing alongside an unprecedented labor shortage across the country.

The Biden Administration has failed to learn from this experience. Rather than backing off in the face of rising prices for gasoline and outright shortages in other areas of the economy, especially involving electronics, they are preparing a multi-trillion-dollar infrastructure project. There is a viable argument that the country needs infrastructure, but timing is everything, and the consequence of pumping vast sums of government money into infrastructure would be to further compete for capacity with businesses and communities emerging from COVID-19.

From an efficiency perspective the timing could not be worse. The government would end up paying vastly more for the same projects and services than it would three years ago or three years from now, in effect getting less for more, while also increasing costs on the private sector. The economy is already running at or near 100% capacity (businesses are struggling to hire and many raw materials are running short). Increasing the number of orders will not increase capacity. It will merely increase prices.

The result, as it has been throughout history, is likely to be felt most by those at the bottom and in the middle. Homeowners will be able to ride out the storm, but renters will face vastly increased costs, local governments will face increased expenses for maintenance, consumers will be unable to buy products, and commuters will face greater difficulty getting to work. Fewer services will be available due to increased labors shortages, while those that are available such as restaurants, food and electronics will be more expensive. And all of these factors will be felt strongest in urban areas.

All of this combines to create an alarming situation. Riots and unrest are not unlikely, as minority communities are faced with high employment and being priced out of their communities, while millennials and younger progressives bemoan rising costs of living. While conditions will likely inspire the left to redouble their attacks on capitalism, in fact it is the government’s spending and intervention driving the troubles. Nonetheless, we can expect more of the left-wing agenda Biden outlined in his campaign—perhaps an insistence on cancellation of student loans, rent forgiveness, and even further unemployment support. If the left’s hardcore base does not get what they want, we already know they may be prepared to threaten violence. The summer of 2020 may well be nothing compared to what is to come if indeed the Biden policies push the nation into an economic crisis.

Economic history is full of examples of this sort of megalomaniacal economic behavior—and of the disastrous consequences which followed hubris on the part of government leaders who believed they could force the laws of economics to bow before them. Although the most cited example may be programs undertaken during the Great Depression, one particularly vivid example—one that eventually led to serious geopolitical consequences—was what the Shah of Iran did to his nation’s economy in the 1970s.

Between 1965 and 1973, Iran experienced one of the fastest rates of growth in the world, with Gross Domestic Product increasing by an average of nearly 11% a year. Predictions were made that by the 1990s, Iran would overtake Japan and become the world’s second largest economy. Following the 1973 Arab-Israeli war, and the Arab oil boycott of the West which followed, Iran was even more flush with money. This, in a sense, was Iran’s undoing.

The Shah of Iran was a tragic figure, a man who loved his country, and seemed to have extensively studied the records of Louis XVI of France and Nicholas II of Russia, and determined to do the opposite. While they surrounded themselves with cronies, the Shah embraced technocrats. Whereas they embraced tradition, the Shah allied himself with what he saw as the forces of progress, launching a “White Revolution” to breakup landed estates and give equal rights to women. He was deeply committed to economic development. The Shah believed that a successful country was a rich one, and he was determined to turn Iran into a “great civilization.”

For this reason, the Shah decided to overrule the advice of his advisers that the Iranian economy was already growing at capacity, and responded to the influx of oil wealth by pumping the funds back into the economy. This came in the form of development projects and programs. The Shah, having seen how his economic policies had produced 11% growth, assumed that if he merely increased the spending on every existing project it would increase the returns, and quite literally added zeros to items in the budget.

The result was the opposite of what he hoped. Iran, like any country, had limited capacity in the economy. Highways and roads could only carry so much transport, and there was a limited amount of construction materials, steel and other goods. Any major public works or infrastructure products that the government launched competed with private sector activity for those scarce resources. While Iran had achieved success with a degree of public sector investment in the 1960s, all of the most worthwhile projects had already been funded, so the additional funding that the Shah poured in was motivated not by any productive value the projects might have, but by the Shah feeling the need to “spend” the money he had on hand from rising oil prices. The result was predictable.

The government spending drove up prices of raw materials, transport, and construction, causing mass inflation while also pricing private businesses out of the market. They could not compete with the Iranian government, flush with oil money, for scarce transport or construction, and the result was that it became impossible for any company to ship products. Shipments rotted in boxes for weeks or even months waiting to be unloaded as highways were backed up with traffic jams, and buildings were left uncompleted. All of this caused rising unemployment at the very same time prices were rising.

By overstimulating the economy in the 1970s, the Shah crashed it. The aftermath, as we well know, was mass protests by unemployed workers against a government that was unaccountable and seemingly incompetent. These protests were hijacked by radical Islamists, but they were inspired by high unemployment paired with high inflation, both caused entirely unnecessarily by the decisions of the government.

Are the Biden administration’s steps down the same road followed by Iran’s deposed leader deliberate? It is hard to say. But if Biden was pursuing policies designed to deliberately radicalize urban populations, they could not chose better ones than those they are pursuing, and which were so effective at radicalizing Iran’s urban population in the late 1970s.

It is not just America’s economy which is under threat by Biden’s economic policies—it’s the entire social fabric of society.

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Ron Howard
Ron Howard
2 years ago

And if that was not bad enough, from what I read the infrastructure bill is filled with millions of dollars of non-infrastructure items. Like all of the other big spending bills by Biden and this Congress, full of special interest and other expenditures on things not associated with the bill. Democrats throughout history have bragged about signing the “biggest tax increases” in history so now they are spending every dollar they can, I guess so they can brag about signing the biggest tax bill in history to pay for it.

Dr.C
Dr.C
2 years ago

This is not an administration, but a Regime run by criminals who occupy the White House with the controlled automation called Joe Biden a man of depravity.
Socialism is like pornography, it gives the promise of paradise in its distraction when in reality it’s a worthless delusion.

David P Nelson
David P Nelson
2 years ago

This destructive path that the far Left is traveling on has got to be altered – ASAP!

Ed J
Ed J
2 years ago

Yep! President Joe DeMentia Bidense (our Commander and Grief and poster boy for Culpable Stupidity) will continue to perpetrate his grandiose socialist policies and we, the American people, will be the ones ending up paying for it all – through higher prices, stagnant or lower wages, virulent inflation (which will erode what little savings we have at the moment), and ultimately reduced opportunities to pursue the American dream. Welcome to the Demsheviks’ vision of Nirvana!

Socialism NEVER elevates anyone – it only serves to pull everyone (except the few elites) down to the level of the lowest common denominator, which is equatable to a state of misery and deprivation for all. All one has to do is look at Venezuela today and the Nirvana they are enjoying under Socialism. I do not want this sort of end game for America.

Ralph S Mills
Ralph S Mills
2 years ago

Pharaoh Biden promised to raise our taxes. As a bonus… he is raising costs as well!

Lakelady
Lakelady
2 years ago

AND NOW Biden wants Congress to send 60+MILLION$$$$ to PALESTINE for RECOVERY damages to GAZA!!!! WHAT THE HELL????? We dont have enough votes to stop this in either house. Now, if joe wants to set up a collection for CONGESS, his WH staff, and all his appointees, then go ahead… see how much THAT gets you… you know, like ok folks, put YOUR money where your loud mouths are….????????????

honest doug
honest doug
2 years ago

The ship of fools needs reminding of the classic definition of inflation: “too many dollars chasing too few goods”

Rik
Rik
2 years ago

There’s a reason that the Democratic Party has a JACKASS FOR A MASCOT!
That’s why I ALWAYS REFER TO HIM AS JACKASS JOE!!!

BAE
BAE
2 years ago

Joe Biden likes to spend other peoples money. It won’t affect him and his corrupt family. They’ll laugh all the way to the bank. The American tax payer will pay for all of his mistakes. Awful president and Harris might be even worse. Pelosi and Crying Chuck love him.

Shell
Shell
2 years ago

When a problem uses Cloward-Piven, or Socialism, Communism, Lies, and evil scenarios like belittling your opponent, using filth to inflate and infiltrate the field, when historically it has never worked so why would a reasonable, it somewhat, educated person use those failures?

Pride goeth before the fall. Too proud to change?

Wayne Peterkin
Wayne Peterkin
2 years ago

While this is true, its a whole lot worse than just spending. Every single policy they are pursuing is anti-American at its core. From foreign policy to race relations to economics to immigration to election reform to judicial reform I cannot point to a single policy intended to benefit our nation. Every single thing they are doing centers on keeping themselves in power regardless of the damage done to the American public. And a lot of dishonest or uneducated nitwits are supporting them because they don’t understand how they will be hurting themselves in the long run. If we can’t stop this we are permitting the destruction of America and leaving our grandkids in an impossible hole they will never climb out of.

Old Silk
Old Silk
2 years ago

Courting it and counting on it. That is why they put their election legislation first and foremost.

Chris
Chris
2 years ago

The article and the comments all agree that America is headed for economic trouble. I agree, but how do we prepare for this pending economic doom?

Carol
Carol
2 years ago

The destruction of society is exactly what these leftist clowns want! They are playing God and will lose! They think if they destroy America as it is, they can remake it to what they want! Never happens since MAN IS NOT GOD! There will be more violence when folks who have been coddled by the welfare system can’t get what they want! There is so much immaturity and selfishness running rampant in society between the politicians and their useful idiots that without a REAL leader, America is going to crash and burn! God have mercy on all of us!

Chuck
Chuck
2 years ago

A bubble can expand only so far and it bursts. We are straining the bubble’s expansive qualities and it will burst. The result will make the 1970’s and the 2008 Great Recession look like prosperity.

Barb
Barb
2 years ago

The Socialist Democrats don’t care what happens in this country so long as it doesn’t directly affect them!

Art
Art
2 years ago

WOW! I REALLY FEEL ENLIGHTENED! THE USEFUL IDIOTS EAT THIS GARBAGE 3 MEALS A DAY. ARE SOME OF US THAT BLIND THAT WE CAN NOT ACKNOWLEDGE WHAT IS HAPPENING???? POWER TO THE REAL PEOPLE. NOW!!!!!

Ruth Kidney
Ruth Kidney
2 years ago

Biden and his cronies in power are the pawns of the chinese communist party and putin. Their goal is to destroy this nation so that they can rape our land. Why else would Biden accept a check from Putin’s mayor friend for millions of dollars and allow them to build a pipeline while cancelling ours? And why not require China to agree to the green new deal initiatives that he has pushed in our country? I fear for the future of this country. Once our leaders denounce Israel we are doomed because we will face God’s wrath.

J. Farley
J. Farley
2 years ago

They are spending like a drunken Democrat, I never say drunken Sailor, because my brother was a Sailor, and besides a Sailor spends his own money !!!

Steven
Steven
2 years ago

Daniel Roman must be the biggest optimist ever put on this planet. By making comments such as “The Biden administration has failed to learn from this experience.” Talking in regards to higher gas prices and shortages of building materials and electronics…For F sake, wake up!!! Anyone with half a brain knows that everything is being done for one single purpose, and that is to bring America to her knees. If the American people don’t wake up soon this country is lost forever. If you’re counting on the Republican leadership to do something, or being able to vote out the Dem’s in the next election, you’re sorely mistaken and have your head so far up…I’m wasting my time. May God help each and everyone of you.

Charlotte A Mahin
Charlotte A Mahin
2 years ago

Ruining our economy and our social structure are exactly what our DC Communists are trying to do. It is the only way they can change us into another Communist country. I believe that they are working directly with China to accomplish this goal. Just look at all of the evidence so far. Most of the big corporations including big tech are in bed with the Chinese and also have a huge say in what Biden is doing. They paid him well to coerce with them. They refuse to find out the real source of the Covid virus while we learned last week that it has been confirmed with documents that the US gave money to the Wuhan Lab to develop a super virus and Dr. Fauci was involved. Not to mention how they have let terrorism rule our biggest Democrat-run cities for over a year and are pushing to end local police forces. They are also purging patriots from our military. It is pretty clear that their goal is to have a federal police state so they can watch every citizen every day. Next, they will be paying citizens to rat on their neighbors and “friends”. This is serious and I am afraid we cannot stop them in time to head back to a country run on laws and their enforcement and is truly a Capitalist Republic.

Jay A.
Jay A.
2 years ago

Mr. potato head has no idea and is incapable of fixing anything. The communist left is calling the shots for the empty suit Biden. Total destruction of this country is their end result.

Mandy
Mandy
2 years ago

This is part of the Communist plan to take down the US with so much debt that we continue to borrow from China and finally are done in with the debt. I think this has already come to that point but other countries must be in the same trouble.

Wanda
Wanda
2 years ago

The hate for Trump is greater than their hate for America….they will undo anything good that Trump has done just because they can. Biden just sent money to Russia whereby they can finish their pipeline, yet he shuts down America’s pipeline. These people are a clear and present danger to America and need to be dealt with.

Brenda Blunt
Brenda Blunt
2 years ago

Apparently someone needs to go back to school and learn about economics and history!! Americans, open your eyes!!

Kenneth D.
Kenneth D.
2 years ago

An economic implosion (collapse) and total social upheaval are precisely what the globalists of both parties and their foreign cohorts are trying to achieve. That level of crisis will open the door for the implement a global monetary and economic system, a well as the advent of a global government. They have never been able to approach these ultimate objectives as long as America was strong and viable economically and socially.
Following WWII, the radical left and globalists have patiently undermined America’s values, principles and governance by slicing and dicing its citizens into a multitude of tribal categories and special interest groups, as well as throwing sound economic theory and diligence out the window.
Now they have enough useful idiots well placed and a critical mass of gullible citizens who believe government dependence and control are not only acceptable, but preferable to personal accountability and freedom. The table is set for the final act of initiating crisis after crisis to weaken resistance to disarming free Americans to the point where a despotic takeover will be possible..

aluminum head
aluminum head
2 years ago

The goal of the ( D ) communists is to collapse the dollar / financial system. All the greenback represents is a worthless “note of exchange.” There is NOTHING behind the dollar. The ( D ) communists need to be removed by military coup. Law and order will be enforced by militia and vigilante rule very soon. Watch and be amazed.

Todd R Wagner
Todd R Wagner
2 years ago

First the definition of insanity(Doing the same thing over and over expecting a different result). The definition of stupidity(Joe Biden and Kamal Harris)

Veteran
Veteran
2 years ago

Research “Cloward–Piven strategy” and it will tell you all you need to know about the left’s goal to overwhelm the welfare state, and bankrupt the nation to collapse the Republic and then re-organize into a communist dictatorship with universal “income” (cleartext: equal poverty for all but party leadership, i.e. North Korea..), devalue, and abolish the dollar and replace it with a completely government controlled, and unbacked by any value cyber currency, and to join the “Great reset” in the form of global communist government “without” personal property (except of course for the party leadership who are so “special” they need multiple homes, artwork, yachts, lodges, and hunting preserves), in short text: global neo-feudalism. Communism is not government of the people, but wholesale theft, to benefit those who place themselves in charge without the consent of the governed, a nepotistic, hereditary rule of thugs. At least monarchies and feudalism had to keep at least the appearance of upholding God’s values to some degree, under socialism/communism anything goes, no accountability and completely arbitrary rule because the state, and with it the thug at the top is their replacement for God, they worship Satan whether they are aware of it, or not.

elysummers
elysummers
2 years ago

We are so screwed.

Stephen Russell
Stephen Russell
2 years ago

Set stage for coming Great Depression 2, 3 ( had depression in 1873 & 1929)

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