Category: deficits and debt

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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.

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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.

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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.

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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.

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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.

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What a Relief

Covid relief money

Based on a quick look at the Edward M. Kennedy Institute for the United States Senate’s splash page, I wasn’t immediately sure what, precisely, the institute’s raison d’être might be. On the top menu bar there’s a slogan: “Just Vote.” Big clue? 

On the About page, though, we are told its mission: “educating the public about the important role of the Senate in our government, encouraging participatory democracy, invigorating civil discourse, and inspiring the next generation of citizens and leaders to engage in the civic life of their communities.”

As for the vision thing, that’s supplied by its namesake, Ted “I Survived Chappaquiddick” Kennedy: “To preserve our vibrant democracy for future generations, I believe it is critical to have a place where citizens can go to learn first-hand about the Senate’s important role in our system of government.”

I guess that explains why the institute’s Boston location sports a replica room of the U.S. Senate chambers.

Which costs serious money, of course.

Paid for entirely by the ultra-rich Kennedys?

Fact check: no. 

Some of it is paid for by you and me — courtesy of Congress and COVID!

You see, part of last year’s $350 billion in pandemic relief went to Boston’s memorial outfit for its once-favored now-deceased multi-millionaire politician. Five million bucks, it turns out, was used (the AP tell us) to pay off the institute’s debt. 

But don’t worry: the Kennedy Institute wasn’t singled out. Relief funds — which you might think would focus on struggling local libraries, community centers, and the like — also went to building a posh hotel and a minor league baseball stadium. And much, much more.

While politicians are good at spending money, especially for “emergencies,” they aren’t good at spending it well.

This is Common Sense. I’m Paul Jacob.

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