President Joe Biden raised some eyebrows this week when he said the Democrats' $3.5 trillion spending package is completely paid for. White House Press Secretary Jen Psaki later repeated the claim that the plan actually costs nothing.
In reality, economists say the plan actually costs even more than the widely reported price tag. "Democrats are advertising it as costing around 3.5-trillion dollars over ten years, but a bunch of the new programs they propose only last three or five years, and then they pretend like the program disappears," says Chris Edwards, economist with the CATO Institute. "If you take all these new Democrat spending programs in the bill, and you extend them fully for the ten years, you get a five-trillion dollar price tag."
The White House's claim that the bill is "paid for" may technically be true, since every dollar spent by the government has to be paid for in some way. But Edwards says the issue is how it is paid for---primarily higher taxes that will impact nearly everyone. "There's no magic money tree in Washington," he tells KTRH. "If the federal government spends another 3.5-trillion dollars, that means 3.5-trillion dollars sucked out of the private sector economy."
Ultimately, Edwards predicts the burden of all the new spending will fall on the middle class with inflation, lower wages and higher costs. "If the federal government is spending more money, that means private businesses will be spending less money, and workers will have smaller paychecks to pay for their priorities," he says.