Last week’s agreement on an infrastructure bill, followed almost immediately by a Biden backtrack, and then a Biden Saturday somersault is almost enough to make your head spin. It’s hard to imagine a more incompetent response to the deal, and it is only going to make it harder to get anything across the finish line. And the congressional calendar is ticking….the Biden revolutionary agenda is slipping away.

Yet the interesting thing for me is the economics of Mr. Biden. After the debacle of the Obama administration, with the stimulus failing to deliver any sort of robust recovery, Team Biden joined in lockstep saying the lesson learned was that we just weren’t bold enough. Parroting Paul Krugman, the Biden Administration jumped on the Keynesian idea that government spending could fill any private sector shortfall. Except there is no private sector shortfall to fill. The Biden administration came in with an economy slowly being opened up with plenty of pent-up demand and savings from being forced to stay at home, coupled with tremendous prior stimulus. The private sector can’t find workers–the minimum wage is so irrelevant right now. So what to do? Add some more to it! Now even beginning economic students can tell you that fanning aggregate demand higher on top of a reduction in aggregate supply (Covid supply constraints) would lead to higher prices, and that is what we have thanks to unprecedented fiscal and monetary stimulus. The Fed has suggested these are only higher prices relative to the Covid reduced baseline, and there is some truth to that. They also suggest that when the government extra payout for unemployment is gone in the fall that supply will start to normalize, and I think they’re right there also(which begs the question of why we continue to pay people to stay home), to a degree.

Yet the ambition of the Biden administration looms large–and gone is even the fig leaf of fiscal policy to lift us out of depression. Rather there is a fundamental transformation that is being proposed with the $6T man. There is no free lunch, and in an economy that already can’t provide workers for existing jobs, where are the resources going to come from? Even some smarter Democrats realize that this could be an impending disaster–what if he actually got all this through? There is no possibility of executing that large of program in a short time. Incrementalism is not only better politics generally, but it also gives you some hope of eating the next bite of the elephant (no pun intended!).

But here is the important conclusion: Team Biden does not simply want a bigger government. In a supply constrained world, they are proposing a much smaller private sector. They won’t say that, but this is exactly what they are trying to do. Unlike libertarians, Christians believe in government–it is part of God’s common grace, a minister to us for good, an avenger that punishes evil and praises what is good. Yet the biblical function of government is far smaller than even our current government structure, and we don’t expect our help to come from Washington DC. It is an idolatrous people that chooses to put its trust in men, and not the God of the universe. Is there any need for God when Washington DC promises to meet any of your wants or needs? And, better yet, force somebody rich to pay for it?