Tag: spending

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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.

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crime and punishment folly insider corruption local leaders responsibility

First-Class Arrogance

“One thing is clear,” New Orleans Mayor LaToya Cantrell declared, “I do my job, and I will continue to do it with distinction and integrity every step of the way.” 

She marshaled this self-righteousness in response to media inquiries as to why, as The Times-Picayune/The New Orleans Advocate reported, “Cantrell has charged the city of New Orleans $29,000 to travel first- or business-class instead of coach.”

Mayor Cantrell defiantly refuses to pay back “the exorbitant fees” she ran up “for the upgraded tickets, including an $18,000 first-class trip to France over the summer.”

But that’s precisely what City of New Orleans policy demands of her. “Employees are required to purchase the lowest airfare available,” it clearly states. “Employees who choose an upgrade from coach, economy, or business class flights are solely responsible for the difference in cost.” 

Yet, her excuse for upgraded jet-setting is priceless. 

“As all women know, our health and safety are often disregarded . . .” Cantrell offered. “As the mother of a young child whom I live for, I am going to protect myself by any reasonable means in order to ensure I am there to see her grow into the strong woman I am raising her to be,” she continued. “Anyone who wants to question how I protect myself just doesn’t understand the world black women walk in.”

Hmmm. Just how much safer is it in the airplane’s high-priced seats? 

Plus, a pity that the mayor didn’t show any consideration for those fearful souls flying with her. One of “Cantrell’s flights cost nine times that of an aide who accompanied her but flew in coach.”

There is good news, however. A recent poll of registered voters shows a majority (55.4%) support recalling Queen — er, Mayor Cantrell.

This is Common Sense. I’m Paul Jacob.

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government transparency too much government

Last of the Big Spenders

California, spending, budget

The state government of California spends a lot of money. But how much and on what?

That information has, apparently, been a state secret. 

Until now.

For years, a watchdog group called OpenTheBooks.com has been working to discover and disclose government spending in the United States. Its efforts were enabled by 2006 legislation sponsored by Senators Tom Coburn and Barack Obama to establish a website, USASpending.gov, that details federal expenditures. Until his death in 2020, Coburn was the honorary chairman of OpenTheBooks.com.

The group reports that in 2021, it filed some 47,000 Freedom of Information Act requests to obtain data on some $12 trillion of government spending. So they’ve been busy.

California is now the fiftieth state whose spending is being made public in detail.

The state had long resisted requests for info about its spending. State controller Betty Yee said that it was impossible to comply with such requests because California has no central database of government payments. Compiling the data would be too darn hard.

The auditors at OpenTheBooks.com performed the chore instead, filing requests for public records with each of 469 state-government entities.

According to founder and CEO Adam Andrzejewski, “It was a historic knockdown, drag-out dogfight that lasted a decade and spanned the last two California controllers. Since 2005, the state invested $1.1 billion in accounting software, yet still couldn’t publish a complete record of state spending.”

Various budgetary items will doubtless prove controversial — now that they are publicly known.

This is Common Sense. I’m Paul Jacob.

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deficits and debt

Sitting on the Volcano

national, debt, federal, economics

“Wait, it gets worse.”

Over halfway through Eric Boehm’s Reason discussion of our government debt situation, he gets to a crucial point: “The federal government’s debt is particularly susceptible to rising interest rates . . . because so little of it is locked into long-term interest rates. If you have a 30-year fixed-rate mortgage on your house, rising interest rates won’t bother you much. But the federal government overwhelmingly relies on short-term debt, with an average maturity time of just 69 months.” 

So the standard approach to inflation, with the Federal Reserve raising interest rates, would hit the federal budget like an exploding volcano. 

When talking trillions, it’s hard to keep a sense of proportion. Boehm puts it this way: “A one percentage point increase in interest rates translates into a $30 trillion increase in interest costs.” 

Debt service is one of the reasons why the sages at the founding of America were, if not united in opposition to federal debt, overwhelmingly leery of it. But that leeriness did not stop federal borrowing. Only for one brief moment did the United States’ government not hold debt.

Borrowing was one thing when gold or silver fettered our finances to some limits. But paper and digital money have divorced us from a sense of reality.

We pretend that debt’s reality can be perpetually postponed, but we always “pay” — in lost prosperity; in inequality; in economic dislocation; in political unrest. But when the volcano erupts, then we really pay. 

As we awake to our indebtedness, let’s recognize that our political culture has allowed it to get so far out of hand. Fundamental political reform is imperative.

This is Common Sense. I’m Paul Jacob.

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Biden Blames Business

inflation, cash, money, fire

Inflation’s up, and President Joseph Robinette Biden, Jr., thinks he knows why.

Economist Bruce Yandle, famed for his “Bootleggers and Baptists” theory of regulation, reports in Reason that the aging president blamed “the country’s three largest meatpackers” for contributing to July’s CPI rate of 5.4 percent, and the fuel industry for its part in August’s 5.3 percent annualized rate. 

Profiteering!

I’ve always wondered how anyone can get away with this tired old accusation. Businesspeople aim to profit at all times and in every place. Profit is why they go into business. Are they making too much inflation-adjusted profit during an inflationary period but not when inflation is low? Seems unlikely.

But Biden’s looking into it! “There’s lots of evidence that gas prices should be going down,” the prez claimed, “but they haven’t.”

What evidence? Biden presented none. 

After throwing so much money into the economy to “stimulate” it after the big hit commerce has taken from state-perpetrated lockdowns, what could we expect but rising prices? “Inflation is always and everywhere,” a great economist has said, “a monetary phenomenon.”

Bruce Yandle is on that same page. Referring to Mr. Biden’s bizarre blame game, Yandle suggested that maybe — just maybe — Biden “should look inside the halls of the West Wing.”

Specifically at all the spending, like the current “$3.5 trillion spending package.” The puppet masters pulling Biden’s strings must, Yandle asserts, “be aware that calling for more spending to calm inflation is like pouring gasoline on an already smoldering fire.”

The real problem is “too much printing-press money” backing deficit spending.

Blaming excess profits? A distraction.

A big lie.

This is Common Sense. I’m Paul Jacob.

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Catastrophic! Calamity! The Debt

U.S. Sen. Pat Toomey (R-Penn.)

“Once again, the stability of the U.S. financial system is at risk,” warned CNN State of the Union host Jake Tapper, “thanks to political brinksmanship in Congress.

“If lawmakers do not act, the federal government will shut down this week. And, next month, the Treasury secretary says, the U.S. will not be able to pay its bills . . . which . . . could be catastrophic for the U.S. economy.”

Incredulous, Tapper further bemoaned, “that has not convinced a single Republican lawmaker to get on board to raise the debt ceiling.”

But he made the mistake of inviting retiring U.S. Sen. Pat Toomey (R-Penn.) on the Sunday program.*

“[O]n combining the debt ceiling increase or suspension with the continuing operations of the government,” Toomey declared his vote is NO. 

“And there is no calamity that’s going to happen, Jake.”

Toomey explained that “after Republicans vote no, Chuck Schumer is going to do what he could have done months ago, what he could have done weeks ago, what he could do tomorrow, and that is, he will amend the budget resolution so that Democrats can pass the debt ceiling all by themselves.”

Noting that Democrats were “in the midst of an absolutely unprecedented, very damaging spending spree on a scale that we have never seen,” Toomey emphatically refused to “authorize the borrowing to help pay for it.”

Over the weekend, a Washington Post editorial attacked Republicans for being “unwilling to lift a finger to avoid financial calamity,” while excusing Democrats. 

“For their part,” The Post justified, “Democrats . . . want the same political cover they gave Republicans during Mr. Trump’s presidency by raising the debt limit in a bipartisan fashion.”

The nation’s newspaper of record in full-throated advocacy of political cover.

This is Common Sense. I’m Paul Jacob.

* Sen. Toomey has been a stalwart term limits supporter in Congress. He leaves having kept a pledge to serve only six years in the House, left the Congress for six years before winning a Senate seat and now stepping down after two terms in the U.S. Senate.

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