Today's Top Stories From the Breitbart News Desk

The United States Senate passed the hoax infrastructure bill on Tuesday thanks to the votes of 19 Republican Senators and every single Democrat Senator. The senators voting to give President Biden his greatest legislative win will have to make their own separate peace with their constituents. Or perhaps they will not. Many of those who supported the bill have announced their retirement, which means that they plan to make fortunes as lobbyists, and others may simply hope that time will wash away the memory of this surrender.

The bill authorizes $1.2 trillion of spending. The Congressional Budget Office says that the bill will directly add over $340 billion to the deficit. Including indirect effect, the bill adds nearly $400 billion. Neither of those figures, by the way, include interest on the money borrowed.

For this kind of money, you might expect that the bill will be a big boost to economic growth. Unfortunately, that is unlikely. The low-hanging fruit in terms of economic benefits of infrastructure was picked long ago. Despite the massive costs, we aren't doing anything nearly as effective as building the interstate highway system or electrifying rural America. Much of the infrastructure we'll build in the future will be marginal improvements and repairs to existing structures. Some of the money is even being spent to tear down roads that are now disliked for one reason or another. The Penn Wharton Budget Model finds that the legislation will add one-tenth of one percent to the GDP by 2050.

There is, however, the risk that it will spur inflation. The fiscal expansion in the bill creates additional demand for goods and services in the near term, but the slight benefits stretch out over time. That's a recipe for near-term inflation at a time when inflation is already running much hotter than expected. The economy is not starved for demand right now, but the politicians are rushing to keep piling it on.

We'll get the latest update on the inflation front tomorrow morning when the Department of Labor releases the Consumer Price Index. The median estimate for the July figure is a 0.5 increase in headline inflation, which would be a big slowdown from 0.9 percent in June. This has been running substantially above expectations, nearly doubling the consensus forecast in June, and we anticipate a repeat of this Wednesday.

– Alex Marlow & John Carney
Breitbart News Network