Category: deficits and debt

Categories
deficits and debt national politics & policies political economy

The Economy Is Great-ish

Joe Biden, economy, inflation, Bidenomics

“We have the highest share of working-age Americans in the workforce in 20 years,” Biden recently told reporters. “It’s no accident. It’s Bidenomics.”

Bidenomics being that old standby, tax-and-spend-omics.

So why do so many Americans think the economy is getting worse? Why do 84 percent say that their costs have gone up?

Well, says President Biden, the media mislead them. “You all are not the happiest people in the world [in] what you report,” is his view. “You get more legs when you’re reporting something that’s negative.”

The media do often mislead us; the negative news bias is real.

But I don’t think that our left-leaning, in-the-tank-for-Biden media can be blamed for the impression so many of us have that it’s harder to make ends meet.

Biden isn’t the only one professing puzzlement. Breitbart Business Digest observes that a “small army of establishment media types and economists” are intent on “unraveling what they take to be the great mysteries of our time.” As described by a recent Brookings Institution paper, this mystery is the “disconnect between consumer sentiment and the state of the macroeconomy.”

As BBD points out, the Brookings researchers simply start by assuming that everybody is wrong, then try to figure out why.

“A simpler explanation would be that the economy is falling short of the public’s expectations” because of things like high inflation, higher interest rates, and greater difficulty paying for groceries, Christmas presents, vacations. And rent, and medical bills, and tuition.

Saying it’s all in our heads won’t make tough times go away.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt national politics & policies

Of Stopgaps and Ladders

budget, debt, Congress, shut down

“By law, we have one job,” Rep. Tim Burchett (R-Tenn.) asserted the last time he opposed the “continuing resolution” (CR) on the federal budget. 

What is that “one job”? It is “to pass twelve appropriations bills and a budget. We aren’t doing that, which is why we are $33 trillion in debt.”

Katherine Mangu-Ward, at Reason, fleshed this out: “In theory, the president proposes a budget, Congress passes a budget resolution, and then various committees put together a dozen separate spending bills. They’re debated and voted on, and then the president signs them into law by October 1.”

The practice, however, is a bit different: “What happens instead is that the members of the House careen into each fall full tilt, screaming at each other until they throw together some kind of stopgap measure to fund the federal government for a little while longer until they can get their act together to generate a big, messy omnibus bill that no one will have time to read.”

But it’s worse: “When they can’t manage even that, we get a shutdown.”

To prevent a shutdown, but also not fall back into the usual iterations of the continuing resolutions, the new House Speaker, Rep. Mike Johnson (R.-La.) has floated the idea of a “laddered” CR. According to The Epoch Times, this plan “would spread the due dates over a period of time rather than having all the bills come due at once.” Think of it as an ultra-weak echo of the responsible budgeting process.

Will it work? Will Congress manage this merest hint of responsibility?

In ten days, it’s go time — or, no-go time — again.

This is Common Sense. I’m Paul Jacob. 

PDF for printing

Illustration created with PicFinder and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt election law tax policy

Slasher Needs Slashing

California Assembly, tax, taxes

A perennial bill in the California Assembly, Constitutional Amendment 1, would make it harder for voters to block local tax increases in accordance with the provisions of Proposition 13, which voters passed in 1978.

ACA 1 would shrink the percentage of voters who must approve certain tax increases from two thirds to 55 percent in cases where the money would purportedly be used for infrastructure or public housing.

Passage would further erode the legacy of Prop 13, which in addition to cutting taxes, limiting tax increases, and requiring a two-thirds legislative majority to increase state taxes, also imposed a two-thirds threshold for voter approval for special local taxes.

In 2000, voters accepted a lower threshold for approval of school bonds — 55 percent instead of two thirds — enabling billions more in property taxes.

That’s bad enough, but things could easily get worse.

Jon Coupal of the Howard Jarvis Taxpayers Association observes that if enacted, ACA 1 would be used to raise taxes repeatedly in local elections by dint of dubbing all government spending “infrastructure.” 

The infrastructure exemption is an innovation of the 2023 version of the bill (the tricky tricksters never stop).

Moreover, if passed, the amendment would take effect immediately. “Billions of dollars in tax hikes will start that much faster.”

Coupal stresses that the new exactions would be added to property tax bills “above and beyond Prop 13’s one percent cap” on property taxes.

ACA 1 keeps getting reintroduced and, so far, keeps getting killed off, like the mad killer in a teen slasher movie. Only to be revived for the sequel.

Kill it again.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder.ai and DALL-E2

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
crime and punishment deficits and debt tax policy

Just Say NO to the IRS

taxes, Bernie Sanders, Nancy Pelosi, Congress, audit, IRS

The IRS wants to do your tax returns. Should we let it?

On this question, the agency has stacked the deck in its favor by commissioning an “independent” review by a left-wing think tank, New America, already on record in support of giving IRS officials authority to do this.

Basically, the IRS handed $15 million (of taxpayer money) to New America to say “Yes, based on our very independent review, we agree with you and ourselves about thus expanding your power over taxpayers.”

Under the proposed IRS Direct File program — already being tested in a pilot program — taxpayers would use government software to let IRS crunch the tax numbers.

Mark Tapscott’s report for Epoch Times cites many objections to the scheme.

Among the most pertinent is voiced by David Williams, president of Taxpayers Protection Alliance. He notes that when individuals and private tax preparers fill out tax forms, they’re typically trying to keep the tax take to a minimum. But the IRS won’t have the same incentive to maximize deductions and refunds.

Moreover, “There is no reason to trust the IRS with even more sensitive financial information. . . .”

Participation in the IRS Direct File program would not be mandatory, at least not initially.

Once established, though, the program would make it easier to mandate participation for at least some categories of tax returns. 

And let us not pretend that such a development would be surprising. Governments tend to use precedents of newly granted power to expand that power.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder.ai and DALL-E2

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt tax policy

Deadbeat California

Gavin Newsom, California

The injustices pile up so thick and fast that one can’t really keep track. Some state governments are especially prolific in producing them. Governments like the Deadbeat State, formerly known as the Golden State.

Now businesses in California must pay the price for the state government’s profligacy during the pandemic, when it borrowed $20 billion from the federales to help pay unemployment benefits. California is refusing to repay.

In the budget proposal for 2023-2024, $750 million had originally been set aside to begin repaying this debt. But Governor Gavin Newsom killed the provision. So, in accordance with federal regulations, businesses must take up the slack. Starting in 2023, the unemployment tax rate that businesses will pay, which had been 0.6 percent, is being increased by 0.3 percent until the loan is repaid.

“California is just not really an employer-friendly state,” says Marc Joffe of the Cato Institute. “This one thing will not be a difference between a business remaining open or closing, but it’s just another burden on top of the many burdens the state puts on employers.”

A major contributor to the size of this debt is the state’s failure to act to prevent massive fraud in filings for unemployment benefits. LexisNexis estimates that fraudulent payments amount to more than $32 billion.

California taxpayers must pay for this unsalutary neglect one way or another. But what Newsom has done ends up penalizing businesses in particular. 

Yet another reason to avoid doing business in the state.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder.ai

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt international affairs national politics & policies too much government

Debt for Pakistani Trans

Pakistani transgender youth, American debt

Thirty-two trillion dollars. That’s a lot of money we don’t have.

I checked the U.S. Debt Clock last night. The federal government was, at that time, $200 billion shy of owing that amount, $32 trillion.

It’s such a big number that it doesn’t seem real.

Maybe that’s why politicians ignore it. And keep spending, adding to it.

All spending that seems fishy contributes to that debt. But so, alas,does spending that a majority of Americans may want. When you are over-spending, all spending contributes to the red ink.

Still, to witness elected government officials throw money around with reckless abandon is especially irksome. Consider all the taxes that pay for that debt, continually as well as eventually. And the misdirected investments that get derailed from productive activity just to fund that debt.

Today’s example of idiotic spending? A mere $500,000. Half a million bucks. Chump change — next to the trillions on budget lines.

So this half-a-million is slotted to go to Pakistan.

To train Pakistanis to speak, read and write in English.

But the kicker’s in the headline, courtesy of The Epoch Times: “Biden Earmarks $500,000 for Transgender Youth, Other Groups in Pakistan.” The blurb makes the obvious point I wish to drive home: “Biden ‘hell-bent on spending money we don’t have,’ said Rep. Ralph Norman’s office.”

Biden’s prodigality will provide “intensive professional development courses for Pakistani transgender youth.”

The old saw about such foreign aid runs, “Don’t we have transgender youth in this country to help?”

But better to join Rep. Norman and point to the debt clock. And shake our heads.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder.ai

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt media and media people nannyism subsidy

The Giveaway Epidemic

buying votes

The most recent trend in vote buying is to propose huge giveaways on narrow subjects, like “reparations for slavery” (to people who were never slaves and from people who never enslaved) and “debt cancellation” (a national issue with student debt).

The most recent example comes to us from the nation’s capital, where “D.C. officials plan to cancel as much as $90 million in residents’ medical debt,” according to Jenna Portnoy’s piece in The Washinton Post.

But brace yourself: the rationale is racial. Though medical debt is a huge issue with all races of people, Washington, D.C., is majority black, and this giveaway is characterized as “an effort to ease a burden that data shows disproportionately impacts people of color.”

There is no magic presidential wand, here, however — as with Mr. Biden cancelling student debt. Nor the insane levels of “reparations” contemplated in San Francisco. In this case, the “District will use $900,000 in year-end surplus funds* to purchase debt, for pennies on the dollar, on behalf of about 90,000 D.C. residents earning up to four times the federal poverty level or whose medical debt is at least 5 percent of their income….”

Similar schemes are in the works in Connecticut, New Orleans, Toledo, and Illinois’s Cook County.

Interestingly, some of this has to do with COVID, or, more properly speaking, the pandemic responses, which were devastating on nearly every level. Including pocketbooks. But the focus is not, here, on fixing America’s amazingly messed-up health care system, but, instead, race and “equity.”

Over 100 million Americans are said to hold $195 billion in debt.

Before we try to correct for this mess, we might wish to inquire rationally why medicine in America is so messed up.

This is Common Sense. I’m Paul Jacob.

* The tsunami of federal pandemic funds bestowed on local governments is largely responsible for the surplus.

PDF for printing

Illustration created with PicFinder.ai

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt folly national politics & policies

Earmarked Nation

pork, spending, Congress, debt

The big secret of the federal government’s budget is that there isn’t one.

Instead of proposing a rational budget, Congress spends money in huge omnibus bills, which sweep up most of the big items into a bucket which is then poured out into the economy. Since these buckets contain more money than can actually be found in federal coffers, the consequent deficits are covered by debt. 

Which accumulates. 

Looming larger and more ominous every year.

One way these omnibus bills are managed is that almost no one reads them. As former House Speaker Nancy Pelosi said of Obamacare, ya gotta pass it to find out what’s in it.

How to get congressmen to go along with this financial chaos? Bribery. Make the spending binge even bigger with earmarks.

That’s where members of Congress place local boondoggle projects into the omnibus bills and get them through without having to convince anyone but the leadership of the projects’ dubious merits.

I used to talk more about earmarks. But when the Tea Party Republicans entered in 2011, they nixed earmarking “the pork.”

When the Democrats came back into power, the aforementioned Mrs. Pelosi brought them back, which, in the last big omnibus bill, pushed spending up an extra $8 billion or so.

Though Democrats love earmarks as an institutional practice, Republican protests are often merely pro forma. Alabama’s Retiring Republican Senator Richard Shelby, for example, “got $666.4 million down there to Alabama,” explained Tom Temin recently. “Sounds like there’s going to be a lot of Richard Shelby bridges, Richard Shelby schoolhouses, Richard Shelby highways.”

Thankfully, one of the concessions Speaker of the House McCarthy made with the Freedom Caucus (whom the president calls “ultra-MAGA” and “semi-fascist”) was to attack the earmarking practice again — after a failure to decide against earmarks late last year.

We’ll see how that goes. But the real test will be the abandonment of omnibus spending packages.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Midjourney and DALL-E 2

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt folly national politics & policies

On Trees

trees and consequences

There’s an old saying — some say it’s an ancient “Chinese saying,” but I first heard it attributed to an Indian philosopher — to the effect that “the best time to plant a tree is thirty years ago; the second best time is today.”

Eric Boehm, writing in Reason, riffs on it regarding federal spending: “The best time to stop borrowing heavily was yesterday (or several years ago), but the second-best time would be today. Instead, Congress is likely to make this problem even worse — again — by continuing to spend like there’s no tomorrow.”

In November, the federal government ran a $249 billion deficit, which, Boehm informs, is up $56B from the previous November.

Talk about November chills.

But worse yet is that Congress is gearing up for more. The omnibus spending bill in the works “will add between $240 billion and $585 billion to this year’s budget deficit.”

After a lifetime of deficit spending, this may seem only worth a furrow above the eyes, not an actual arched brow. But it does make a mockery of President Joe Biden’s boast of decreasing deficits on his watch. As Boehm explains, that’s merely an artifact of the Trump Era humungoid pandemic giveaways. There had to be some sort of let up from that binge. Nevertheless, the “underlying figures showed all along that the deficit situation was continuing to worsen, and that President Joe Biden’s policies were adding trillions of dollars to the deficit over the long term.”

It’s almost as if they think “money grows on trees.”

Would that it were the case, though, since there are only a limited number of trees. Taxation and especially debt are, to politicians, closer to infinity.

This is Common Sense. I’m Paul Jacob.

Update: Senator Mitch McConnell said, yesterday: “I’m pretty proud of the fact that with a Democratic president, Democratic House, and Democratic Senate, we were able to achieve through this Omnibus spending bill essentially all of our priorities.” The Republican Leader predicted passage on the 22nd.

PDF for printing

Illustration created with DALL-E2, John Tenniel, Thomas Cole, JG

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt folly national politics & policies

Relief Spelled S-U-B-S-I-D-Y

Joe Biden, emergency, inflation, student loans

In a bid to bail out the sinking ship of his party, President Joe Biden has decided he can go ahead and bail out Americans who are having trouble paying off their student loans.

Yesterday he announced that (quoting The Epoch Times) “his administration will spend hundreds of billions of dollars to pay off $10,000 in federal student loan debt for some borrowers,” with the Education Department giving the specifics: “individuals earning less than $125,000 a year or families earning less than $250,000 will be eligible for up to $10,000 in debt cancellation.” Pell Grant recipients in the same situation will be eligible for relief of up to twice as much.

The politic nature of the move is so obvious that . . . it isn’t getting enough attention from critics. 

Most of those alarmed at the move concentrate on the unfairness: rewarding those who have not met their obligations and thereby penalizing those who have. Defenders of student debt relief make the usual arguments about the need to help the under-privileged — by giving them more privilege (if anything’s a privilege it is to be able to take out a loan and then not pay it back).

You may be wondering how a president can authorize spending billions of dollars. Isn’t that Congress’s job? Well, the administration has found a semi-plausible excuse — from Congress: a 2003 higher education law that allows the Education Department to provide relief in response to a national emergency. 

And what is the emergency?

Pick one. Inflation, for example.

Which is spurred by overspending.

Which an extra $250 billion will merely increase.

You gotta wonder: isn’t it college graduates who cook up this stuff?

It’s ‘We the People’ who deserve not relief but a full refund.

This is Common Sense. I’m Paul Jacob.

PDF for printing

See all recent commentary
(simplified and organized)
See recent popular posts