The president's $5.8 trillion budget shows he wants more of the same government spending that is already sending prices through the roof.
“My dad had an expression,” said President Joe Biden as he announced his budget plan for FY 2023. “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.”
So at the very moment that we’re experiencing the highest inflation in 40 years, what does Biden value? The same sort of government spending that is already sending prices through the roof.
You’d figure that with Covid receding, debt rising, and a tidal wave of unfunded liabilities staring us right in the kisser, Biden would take the opportunity to radically reset the federal government’s balance sheet. Instead, his budget plan could be titled Rearranging Deck Chairs on the Titanic.
The president wants to spend $5.8 trillion, which would include jacking spending on defense, education, and police. He talks about levying a controversial—and probably unconstitutional—wealth tax on billionaires to help pay for it all but still expects a budget deficit of $1.2 trillion (see Table S1 in Summary Tables)! If you’re going to tax unrealized capital gains, President Biden, at least spend it on something pretty!
It’s debt-financed spending that helps spur inflation in the first place. Rather than cutting spending and reforming entitlements, the government borrows and prints money so it can keep giving more goodies to its favored citizens. You get more dollars chasing the same amount of goods, and that leads to price hikes.
Meanwhile, at least a dozen states—including such far-flung places as California, Georgia, Hawaii, and Maine—are thinking about giving residents money to spend on things like gas, the price of which has gone through the roof. “Direct relief will address the issue that we all are struggling to address,” says California Gov. Gavin Newsom. “That’s the issue of gas prices, not only here in our state, but of course, all across this country.”
Is he serious? Doling out tax dollars to alleviate the pain of inflation is like drinking a beer in the morning to ease your hangover. It’s only setting up the next binge.
Federal Reserve Chairman Jerome Powell has announced a series of interest rate hikes to help tame inflation, but in a recent speech, he made no mention of the increase in the money supply measured by M2, which has risen by a record 41 percent in two years, or of the Federal Reserve’s holding of U.S. debt, which has jumped $3.5 trillion over the same time period.
Powell’s interest rate hikes will be small enough that it’s unclear whether they will have much impact. Back in the 1980s, Fed Chairman Paul Volcker allowed the fed funds rate to more than double in less than two years’ time to over 20 percent, which helped kill inflation but also caused the most severe recession since the Great Depression.
According to recent conservative estimates from the Congressional Budget Office, as the federal budget grows, the cost of paying interest on the debt will keep increasing until it accounts for about 24 cents of every dollar spent by 2050. And that’s assuming interest rates will remain historically low.
So even moderate increases in the fed funds rate would push the cost of servicing the debt much higher, causing the government to borrow more money and kicking us into a vicious cycle of economic despair.
Biden can talk a good game about “returning our fiscal house to order,” but it’s clear he doesn’t understand why prices are going up—and that his policies will keep them high for the foreseeable future. That might cost Democrats control of the House and the Senate in the fall and perhaps Biden the White House in 2024.
That will be too bad for him and his party. But his unwillingness to confront massive spending and debt is going to cost all of us a lot more than that.
Fairfax, VA – Frontiers of Freedom released the following statement from President, George Landrith, about a Report published by U.S. Senator Rand Paul on the harmful impact inflation is having on American families and small businesses. The full report — “The Hidden Tax: Inflation’s Effect on American Families and Small Businesses” — can be found HERE.
Frontiers of Freedom President, George Landrith, said:
U.S. Senator Rand Paul (R-KY) has done Americans everywhere a real service by bringing into focus how the hidden tax of inflation hits hardworking middle income and lower income Americans the hardest and how this hidden tax burdens and weakens small businesses from coast to coast. If you’re a billionaire, you can afford to absorb this hidden tax, but if you’re a lower income American or even a middle income American, this hidden tax increase hits you hard and steals your hard-earned dollars — making it harder to feed and clothe your children, and provide for their future. And if you’re running a small business, this hidden tax makes it harder to grow the business, hire new people, and pay the ones you’ve already got. Simply stated, this hidden tax can be the difference between making it, and not making it.
Many Americans know what its like to have too much month, at the end of the money. But the hidden tax of inflation means that more and more Americans will have more and more of the month still to go when the money runs out.
Senator Paul correctly points out that one of the primary causes of this hidden tax is the almost $5 Trillion that was spent on COVID stimulus. Those who promoted this out of control spending argued it would benefit American families and small businesses. But as usual, it was America’s families and small businesses that are suffering as a result of this so-called COVID-stimulus. The primary beneficiary was government and allies of big government who grew at unprecedented rates. But American’s incomes and small businesses took unprecedented hits. Americans have seen the power of their paychecks shrink and small businesses have been forced to close because they cannot bear the hidden tax burden that inflation has imposed upon them.
The bad news is that so many in Congress see nothing wrong with out of control spending that caused this economic catastrophe. And the truth is it isn’t likely to get better nearly soon enough. For example, the Producer Price Index (PPI) reveals that prices for businesses have jumped by nearly 10 percent during 2021. That is the largest one year increase in prices in the history of the Labor Department tracking such information. And if businesses are seeing those kind of price increases, they will continue to fail and we will continue to see prices rise. This will severely limit the recovery and opportunity for Americans who desperately need a break from the bad news the last two years has brought. This is a 100% self imposed problem. We did this to ourselves. Or more precisely, the big-government apologists in government did this to us.
Frontiers of Freedom and the millions of Americans who support our work and our mission statement in all fifty states express our sincere thanks to Senator Paul for speaking out about inflation. More importantly, he has correctly identified why inflation is hitting us so hard. Getting government spending under control is necessary for at least two important reasons — first, we cannot saddle future generations with mountains of debt. But secondly, we don’t need to look to future generations to see how harmful out of control spending can be — here and now, we cannot continue to impose the hidden and heavy taxes of inflation on so many struggling Americans.
Now is the autumn of Democratic discontent
President Joe Biden practically begged a group of moderate Democrats visiting him in the Oval Office Wednesday to say how much money they are willing to spend on the massive “Build Back Better” reconciliation bill making its way through Congress. According to Politico‘s Playbook, he didn’t get an answer.
The 11 moderates, including Senator Joe Manchin and congresswoman Stephanie Murphy, insisted that Democrats agree first on how much revenue they will raise in taxes before settling on a price tag on a bill that would transform energy, health care, higher education, pre-K, and paid leave. A disappointed Biden assigned the moderates homework: Come up with something that will stop Progressive House members from killing the separate, $1 trillion bipartisan infrastructure package that already has passed the Senate and is scheduled for a September 27 House vote.
Best of luck. In another meeting Wednesday, Rep. Pramila Jayapal, who heads the Congressional Progressive Caucus, pulled a Wendy Sherman and broke into tears while pleading that the reconciliation bill include an immigration amnesty (the Senate parliamentarian has said it can’t). Jayapal urged Biden to delay Monday’s vote or be prepared for Progressives to nix the infrastructure deal. Biden didn’t give in, but he did leave open the possibility that the vote won’t take place on September 27 as planned.
Yet any postponement would create new problems for the White House. House moderates have pledged to sink the reconciliation bill if they don’t get to vote for infrastructure first. And House Speaker Nancy Pelosi can afford to lose only three votes. And the Senate is tied, with Manchin and Kyrsten Sinema still cagey about what they want to do. And oh, by the way, Congress needs to fund the government before September 30 and raise the debt ceiling before mid-October. Is your head hurting yet?
Democrats have run smack into political reality, and it isn’t pretty. They spent months convincing themselves that a presidential election decided by 42,000 votes in three states, a tied Senate, and a 220-212 House (with 3 vacancies) is the same as FDR’s and LBJ’s supermajorities. Now they are just figuring out that the coalition that put them into office doesn’t agree on much of anything besides the idea that Donald Trump shouldn’t be in the White House.
Now the autumn of 2021 is turning into a reckoning for a Democratic Party that wanted to leverage a squeaker election into fundamental change. Like their predecessors in 1993 and in 2009, frontline House Democrats have to decide whether supporting a liberal agenda is worse for their careers than denying a president of their own party a legislative win. Either way, they lose.
Chance, guile, and missteps put the Democrats in this position. They hardly could believe their luck when Trump’s sour grapes cost the GOP two winnable seats in Georgia and handed Vice President Harris the tie-breaking vote in the Senate. What they forgot was that full control of government is a mixed blessing: Your partisans expect the sun, moon, and stars, while independents have no one else to blame when things go wrong. A Republican Senate might have given Biden a foil, and a reason to govern as the centrist he pretended to be during the campaign. Instead, he has no wiggle room. Thanks, Trump.
GOP leader Mitch McConnell made two decisions that complicated things further. First, he okayed Republican involvement in Senate infrastructure negotiations. Yuval Levin of the American Enterprise Institute (where I work) writes that GOP participation began “as an effort to turn down the temperature on the filibuster, then after a while it seemed like it might actually have enough votes to pass, and at that point it became clear that it could also further divide the Democrats.” Senate passage of the deal heightened the contradictions within the House Democratic caucus and guaranteed unified Republican opposition to the reconciliation bill.
Second, McConnell got his conference to agree that any increase in the debt ceiling should come from Democratic votes alone. Democrats from swing districts and purple states have to own their party’s spending binge. It’s a subtle and somewhat cynical move (Republicans add to the debt, too). But it’s also politically shrewd. Nor is the economy really in jeopardy. This isn’t 2011. In the end, Democrats can and will raise the debt ceiling themselves.
President Biden’s degraded political standing is behind the Democrats’ troubles. Biden’s mixed messaging and missteps in the pandemic, the crisis on the border, the rise in crime and inflation, and the debacle in Afghanistan have caused his approval rating to plummet. He’s at 46 percent approval in the FiveThirtyEight polling average. Gallup has him at 43 percent approval—and at just 37 percent among independents. In bellwether Iowa, he’s at 31 percent. Progressives in ultraviolet districts can ignore these numbers. Moderate Democrats cannot.
Still, a weak president and disunited Congress may not be enough to guarantee the collapse of the Build Back Better program. Democrats recognize the need for a win, no matter how small. They assume it’s the only way for Biden to make up lost ground and prevent a Republican takeover of the House, and possibly the Senate, in 2022. But presidential priorities have fallen apart before. Trump didn’t get Obamacare repeal, Obama didn’t get cap and trade, and George W. Bush didn’t get Social Security reform. Biden already got the $2 trillion American Rescue Plan. That might be it.
What’s worse—abject failure or unpopular success? Trick question: Both options are horrible. If Democrats think this fall is bad, just wait until they have to live through the next one.
Missouri Congressman Blaine Luetkemeyer is taking on the Biden administration over policy moves that have caused higher prices and the return of noticeable inflation.
“Gas, milk, fruit, televisions, furniture, washing machines, car rentals, hotel rooms – what do all of these things have in common? Their prices have gone up under the Biden administration,” Luetkemeyer, the ranking Republican on the House Committee on Small Business wrote in an op-ed published Friday by Fox Business.
Data published by the U.S. Bureau of Labor Statistics showed prices up 5.4 percent last month over June 2020, the highest jump since the economic difficulties that began when the market for sub-prime home mortgages collapsed in 2008. That’s higher than the interest rate setting U.S. Federal Reserve expected and marks the sixth straight month in which prices have risen.
“While Democrats in Washington bulldoze a path for reckless government spending, small businesses and middle class working American families alike are left to pay the bill,” Luetkemeyer wrote, singling out the damaging impact the newest round of inflation is having on family-owned business.
“Small businesses are the backbone of the United States economy, and they were making huge economic strides before the Biden administration took over. Now, small businesses nationwide are facing the consequences of the Democrats’ massive government spending agenda in all sectors,” he wrote.
The U.S. says government nearly half the country’s small businesses were forced to increase prices in May, which Luetkemeyer said was “the largest percentage reported in 40 years.”
“From increased gas prices for delivering goods to rising food costs for restaurants, small business owners are bearing the brunt of Democrat-induced inflation,” he continued. “As more American consumers are spending and patronizing small businesses following the COVID pandemic shutdowns, this increased immediate spending has given our economy a bit of a shock. But rather than acknowledge this problem and correct the course, President Biden and Congressional Democrats are doubling down.”
“Make no mistake – inflation is taxation. Prices of the goods you buy go up, meaning the dollars in your pocket are worth less. It then takes more of those hard-earned dollars to purchase these goods.
“The Democrats’ proposed $3.5 trillion package will severely exacerbate the inflation problem for middle-class families and further crush Main Street U.S.A.
“Simply put, small businesses cannot afford the inflation tax that comes with the Democrats’ failed economic policies.
“As Republican Leader of the House Small Business Committee, my colleagues and I have worked tirelessly to provide much-needed relief for small businesses across the country as they regain their footing and reopen their doors to local communities.
“Unfortunately, there is no single COVID relief package that can simply fix inflation – the Democrats must stop their spending spree. As if the pandemic didn’t create enough of an economic burden for American families and workers, they now face an increased cost of living and consumer prices across the board with no end in sight.”
Luetkemeyer’s criticisms are being echoed by economists and others concerned about the effects ongoing inflation will have on the post-pandemic recovery.
Writing in mid-July for the Carsey School of Public Policy at the University of New Hampshire, Michael Ettlinger and Jordan Hensley observed that “As measured by Real Gross Domestic Product (GDP), 35 states and the District of Columbia have smaller economies, as of the first quarter of this year, than they did before COVID-19, while 14 states have seen a modicum of economic growth. Nationally, GDP remains 0.9 percent lower than it was before the pandemic struck.”
President Biden and others in his administration seem happy to claim credit for the good economic news but are rather cavalier about the impact the bad news is having, saying the spike in inflation is at worst temporary.
Biden himself recently dismissed the issue, saying his multi-trillion-dollar spending initiatives will “reduce inflation, reduce inflation, reduce inflation.” Some economists and business leaders fear, however, it is that very spending that is driving the hike in prices and that they will not stabilize or return to the levels at which they were at before the pandemic struck any time soon.
Before his death on February 6, George P. Shultz, a former US Secretary of the Treasury and Secretary of State, co-authored a final commentary warning of the dangers posed by the vast increase in US government spending in recent years, including during the COVID-19 crisis.
STANFORD – Many in Washington now seem to think that the US federal government can spend a limitless amount of money without any harmful economic consequences. They are wrong. Excessive federal spending is creating grave economic and national-security risks. America’s fiscal recklessness must stop.
The COVID-19 crisis has provided the latest impetus for government spending, even to the point of steering the American mindset toward socialism – a doctrine that has always harmed people’s well-being. But some say there is no need to worry about excessive spending. After all, they argue, record-low interest rates apparently show no sign of increasing. The economy was humming along just fine until the pandemic hit, and will no doubt rebound strongly when it ends. And is there even a whiff of inflation in the air?
This thinking is dangerously short-sighted. The fundamental laws of economics have not been repealed. As one of us (Cogan) demonstrated in his book The High Cost of Good Intentions, profligate government spending invariably has damaging consequences.
High and rising US national debt will eventually crowd out private investment, thereby slowing economic growth and job creation. The Federal Reserve’s continued accommodation of deficit spending will inevitably lead to rising inflation. Financial markets will become more prone to turmoil, increasing the chance of another big economic downturn.
Financial markets’ current relative calm and low consumer-price inflation are no cause for comfort. Previous periods of sharp increases in inflation, rapidly rising interest rates, and financial crises have followed periods of excessive debt like a sudden wind, without warning.
Shultz and Taylor’s book Choose Economic Freedom shows that economic indicators in the United States gave no hint in the late 1960s of the subsequent rapid rise in inflation and interest rates in the early 1970s. Likewise, financial markets during the years immediately preceding the 2007-09 Great Recession provided little indication of the calamity that would ensue.
So, what should today’s US policymakers do? Higher tax rates are not the answer. Even before the pandemic hit, every federal tax rate would have had to be increased by one-third in order to finance the current level of federal spending without adding to the national debt. Such an increase would have harmful effects – similar to those of mounting public debt – on economic growth and job creation.
Congress may be tempted to reduce defense spending to help close the deficit, as it often has done in the past. But these previous efforts demonstrably failed. Rather than reduce the budget deficit, Congress instead used the savings from lower defense outlays to finance additional domestic spending.
Unless policymakers abandon their misguided beliefs about budget deficits, cutting defense expenditure now would produce the same result. More importantly, it would be a grave strategic mistake, weakening US national security and emboldening the country’s foreign adversaries – particularly now that China is flexing its muscles in Asia and investing heavily in its military.
Throughout US history, the federal government’s ability to borrow during times of international crisis has proven to be an invaluable national-security asset. Two hundred years ago, the ability to borrow was instrumental in America maintaining its independence from England. During the Civil War, it was crucial to preserving the union. And it proved decisive in defeating totalitarian regimes in the two world wars of the twentieth century.
The US government’s careless spending is jeopardizing this asset. If the country continues along its current fiscal path, the federal government’s borrowing well will eventually dry up. When it does, America will be far less able to counter national-security threats. As hostile foreign governments and terrorist organizations recognize this, the world will become a far more dangerous place.
US policymakers’ mistaken belief that deficits and debt don’t matter is the sad culmination of a long downward slide in fiscal responsibility. From 1789 to the 1930s, the federal government adhered to a balanced-budget norm, incurring fiscal deficits during wartime and economic recessions, and running modest surpluses during good times to pay down this debt. This prudent management of the federal finances was instrumental in establishing America’s strong position in world financial markets.3
President Franklin D. Roosevelt’s New Deal broke this norm, and deficit spending has since become a way of life in Washington, with the federal government outspending its available revenues in 63 of the 75 years since the end of World War II. At first, elected officials were deeply concerned about the adverse consequences of their excess spending. But over time, this anxiety gradually lessened. Annual deficits grew so large that by the mid-1970s the US national debt was growing faster than national income.Sign up for our weekly newsletter, PS on Sunday
During the last decade, any remaining fiscal concerns in either the Democratic or Republican parties have seemingly vanished. Freed from a belief that rising deficits and debt are harmful, policymakers unleashed a torrent of new spending. By fiscal year 2019, the federal government was spending $1 trillion per year more in inflation-adjusted terms than it had a dozen years earlier. In fiscal year 2020, the federal government added nearly another $2 trillion of new spending in response to the pandemic, raising the national debt to 100% of national income. This year, another trillion dollars of new spending – if not more – appears to be on the way.
The momentum toward more spending and exploding debt may currently appear unstoppable. But sooner or later, people will look at the facts, see the destructive path fiscal policy is now on, and recognize that they and the US economy will be better off with a different approach. At that point, America’s democratic system will say the expenditure growth must stop.
U.S. Senator Rand Paul (R-KY) recently introduced his own “Three Penny Plan” federal budget that will balance within five years by assuming the repeal of the Bipartisan Budget Act of 2021 and utilizing the “Three Penny Plan.” Dr. Paul’s budget includes instructions that would pave the way for the expansion of Health Savings Accounts (HSAs) to help Americans more easily cover their health care costs.
“When I started offering these kinds of budgets four years ago, we could balance with a freeze in spending. Not cut anything, then we went to just a penny, then two, now it is three,” said Dr. Paul. “We cannot keep ignoring this problem, this budget sets a goal for balance and provides Congress with necessary tools to achieve that objective.”
“Senator Rand Paul has long been a champion of balancing the federal budget and protecting the American taxpayer,” said Frontiers of Freedom President George Landrith. “Too often opponents of fiscal responsibility argue that to balance the budget would require draconian cuts. But Senator Paul’s proposal only requires a budget cut of 3 pennies on the dollar each year for the next five years and then limits spending increases thereafter by 2 percent per year.”
“Senators should support Rand Paul’s balanced budget plan to expand HSAs, reject tax hikes, and reduce spending by 3 pennies for every dollar,” said Americans for Tax Reform President Grover Norquist.
“I’m glad to see Senator Rand Paul continue his work to address the rampant growth in federal spending and the national debt,” said American Legislative Exchange Council Chief Economist Jonathan Williams.
Dr. Paul’s plan requires that for every on-budget dollar the federal government spends in Fiscal Year 2021, it spends three pennies fewer each year for the next five years. Senator Paul’s proposal doesn’t change anything about Social Security, but reduces spending by $67.4 billion in Fiscal Year 2022 and by $7.2 trillion over ten years.
Sixteen Thirty Fund acts as network for liberal donors to anonymously give to Democratic committees
Deep-pocketed liberal donors are using a massive dark money network to conceal the source of nearly $20 million in donations to pro-Biden PACs.
At least $19.8 million has made its way through the Sixteen Thirty Fund to liberal PACs for the 2020 cycle. The fund, which normally works with advocacy organizations, has switched its focus to the election in recent months, sending large amounts to groups supporting Joe Biden in the presidential race. Wealthy donors push cash into the Sixteen Thirty Fund—an entity housed at the D.C.-based dark money network Arabella Advisors—which then disburses the money to prominent Democratic committees.
Arabella Advisors operates as an important funding avenue for wealthy liberal donors, allowing them to contribute to political groups anonymously. Each of several funds within Arabella, including the Sixteen Thirty Fund, acts as a “fiscal sponsor,” providing its legal and tax-exempt status to dozens of liberal groups that fall under its auspices. That status absolves the groups from having to disclose their donors. Donors’ use of the Sixteen Thirty Fund as a vehicle for election PAC donations marks a departure from the group’s normal operations. It normally serves as a pass-through entity to bankroll shadowy nonprofit groups behind left-wing initiatives. This year, however, Democratic candidates including Joe Biden will benefit from the fund’s disbursements despite railing against secret money in politics.
The fund’s relationship to liberal nonprofits has raised eyebrows among money-in-politics watchdogs. Anna Massoglia, a dark money researcher at the Center for Responsive Politics, said the Sixteen Thirty Fund “has taken dark money in politics to a new level of opacity by channeling money from secret donors to political groups while steering funds into its own fiscally sponsored operations.”
“Sixteen Thirty Fund’s fiscal sponsorship scheme not only enables seemingly independent groups to operate under its umbrella with little or no paper trail but also enables them to engage in a level of political activity that might not be possible if they operated as separate tax-exempt nonprofits,” Massoglia said.
Several election-focused PACs received large sums from Sixteen Thirty, according to FEC filings. The pro-Biden Unite the Country PAC, liberal operative David Brock’s American Bridge PAC, and a joint fundraising venture between the two groups hauled in a combined $11.4 million from the fund last month. Priorities USA Action, the largest Democratic super PAC, received $3.5 million. The Black PAC, a progressive group focused on black voter turnout, received $2.25 million from the dark money entity—nearly all of the $2.5 million the committee raised in June.
The Sixteen Thirty Fund pushed more than $2.5 million to other Democratic PACs earlier this cycle, including six-figure sums to the Nancy Pelosi-linked House Majority PAC, Shaun King’s Real Justice PAC, and Forward Majority Action. It also sent seven-figure sums to Future Forward USA PAC.
“Liberal dark money groups outspent their conservative counterparts in 2018 for the first election cycle since Citizens United,” Massoglia said. “But direct spending by groups like 501(c)(4) nonprofits is only a fraction of the secret donor money seeping into U.S. elections since dark money groups also steer donations to groups like super PACs.”ADVERTISING
Arabella’s massive network has facilitated the transfer of more than $1 billion from Democratic donors to powerful liberal groups and initiatives in 2017 and 2018 alone.
“The Sixteen Thirty Fund provides support to advocates and social welfare organizations around the country, and we will continue to grow our program,” Amy Kurtz, the fund’s executive director, told the Washington Free Beacon. She added that the fund would continue to support groups that work on causes such as “economic equity, the climate crisis, racial justice, and participation in our democracy.”
It makes a lot of sense for Republicans to run a unified campaign going into the next election—with the intent to not just hold the White House and the U.S. Senate, but to regain control of the U.S. House of Representatives, as well.
Many election forecasters would say that if the election were held today, that’s a bridge too far. And they’d be right. House Republicans under Kevin McCarthy have offered little in the way of meaningful contrasts on most of the major pieces of legislation taken up over the past few months. But establishing a meaningful contrast with the way the other party runs things (or would run them) is a key component of any winning strategy and, thanks to Speaker Nancy Pelosi’s considerable overreach in the last coronavirus bill, Republicans now have a chance to make such a contrast.
The American public is highly dissatisfied with the job Congress is doing. According to Gallup, just 20 percent of those recently surveyed expressed approval of Congress. Even Democrats are unhappy, with just a quarter telling Gallup that things under Pelosi were going well.
Part of this is attributable to the increasing polarization of the American electorate. As veteran electoral analyst Michael Barone has written repeatedly, the number of people who split their vote between the major parties as they move down the ballot has declined steadily since the Bush/Gore election in 2000.Ads by scrollerads.com
Republicans can make polarization work to its benefit, especially in the upcoming election, if they run a campaign based on the idea that the two parties have dramatically different visions of what the nation should be like in the future—a vision clearly defined by what Pelosi and her allies narrowly managed to get through the House in the last COVID-19 relief bill.
That legislation contains lots of wedges issues the GOP can exploit to its benefit. For example, with more people out of work at any time since the Great Depression, it’s highly unlikely most voters would support the distribution of their hard-earned tax dollars to unemployed people here in America who did not go through the legal immigration process. It’s the kind of excess progressives generally favor, but which leaves most Americans probably thinking twice about voting for any member of Congress who supports it.
Likewise, the Pelosi-built bill included an extension of the so-called bonus payment being given to many unemployed workers who now find themselves making more money while out of work than they did while gainfully employed. That’s bad policy, not just because it adds considerably to the annual deficit, but because it is also a perverse incentive to stay out of the labor market just as job openings are once again about to become plentiful.
Throughout the political activities related to COVID-19 relief, the Democrats have insisted on all kinds of new spending, adding to the budgets of agencies that are not involved in fighting the pandemic and liberally passing out money to friends and favored interests. Most everything Democrats have accused President Donald J. Trump of doing for his so-called “billionaire buddies,” they’ve themselves done for the interests that keep them in power.
All this creates a contrast with Republicans, who, at least at one time, used to argue for responsible spending and balanced budgets. Trump was never part of that, but he did take the lead, by cutting the corporate tax rate and deregulating industries, in getting the American economy growing at something like the level it is supposed to during good times.
Pelosi’s plan for America, like Joe Biden’s, is the anthesis of that. Incredibly, the former vice president recently proposed taking the corporate tax rate back up to a level higher than even China’s. So much for global business competitiveness during a time when the pressure will be high on America’s manufacturers to come home to the United States.
A coherent, well conceived and executed plan could get the GOP within striking distance of a House majority. It could even push Republicans over the top if they make the effort to produce the proper policies. The money and the organization are there. If they have ideas to go with it, Pelosi may have to pass the gavel next January—which would be good for America.
“Even though our businesses are creating new jobs and have broken record profits,” President Obama said in his economics address last week, “nearly all the income gains of the past 10 years have continued to flow to the top 1 percent.”
It’s odd that Obama touts these facts, because the facts indict his policies. This is even stranger: Many Republicans want to downplay these facts, even though they provide the GOP with an opening.
Obama’s first term, with all its tax hikes, regulations, mandates, subsidies and bailouts, saw stock markets rise, corporate earnings break records and the rich get richer, while median income stagnated and unemployment remained stubbornly high. Continue reading
Will Rogers once said, “It is a good thing that we do not get as much government as we pay for.” That may be true, but I think we all wish we were paying for a lot less government and a lot less taxes. Our federal government is at historically high levels of spending — in recent years gobbling up nearly 25% of the total economic output.
Every year, the federal government spends more money than it did the last year. Even this year with the “sequester,” federal government will spend more money this year than it did the year before. Continue reading
“In the Obamaian universe, the units of the private economy . . . are satellites orbiting the great fixed planet of public spending.”
by Daniel Henninger
It may be that we have to move beyond politics alone to explain events in Washington. We are in the fifth year of the Obama presidency, and Washington is still dead in the water. Four straight years in which the government of the United States of America fails to enact a budget is, well, amazing.
The sense is growing around Washington, and this increasingly includes Democrats, of living in an alternative universe. Barack Obama gives his State of the Union speech, the sequester looms, and the president flies around the country giving speeches. He’s had virtually no contact on the sequester with the legislative branch. Continue reading
Worse, a veiled liberal threat to correct what they deem a “misallocation of wealth.”
by Scott L. Vanatter
Over the past week liberal House and Senate leaders have spoken openly about how they see America’s spending problem. They don’t see it. They claim that we don’t have a spending problem.
First, Rep. Pelosi (D-CA) relabeled it as a “priorities problem.” Then, Rep. Hoyer (D-MD) redefined it as a “paying-for problem.” Finally, Senator Harkin (D-IA) revealed the usually hidden liberal designs on capital. He turned the equation upside down by describing problem of a lack of funds to pay for what we have spent, not because we do not have a budget, but because we have “misallocation of wealth problem.” Continue reading
“This whole controversy: Are you entitled to the fruits of your own labor or does government have some presumptive right to spend and spend and spend?”
by Scott L. Vanatter
Ronald Reagan is well known for his multi-decade devotion America’s purpose and promise. By returning to these lofty ideas America would fulfill its destiny.
His July 27, 1981 speech was President Reagan’s main public effort to educate the nation on the benefits of a bipartisan bill to cut taxes and spending. He taught America, once again, how and why cutting taxes and spending (cutting the rate of growth of government spending) would make for a stronger economy — and help restore America’s latent greatness.
It was Reagan’s habit to speak on large themes. In this particular case he used a two-letter word to illustrate one of the largest of political themes. He stated that the people in electing him wanted to make a change from ‘by’ to ‘of.’ Succinctly put, “It doesn’t sound like much, but it sure can make a difference changing by government,’ ‘control by government’ to ‘control of government.’” Continue reading
Why isn’t there a debt clock in the convention hall in Charlotte, NC?
$16 TRILLION is an astronomical number. If you were to count from 1 to 1 million without stopping (assuming about 1 second per number on average), it would take about 12 days. If you were to count to 1 billion, it would take about 32 years. And if you were to count to 1 trillion, it would take about 31,710 years. And to count out the dollars of our current national debt of more than $16 trillion, it would take more than 507,357 years of counting one number each second without ever stopping. The point is — a trillion is a HUGE, GARGANTUAN number and 16 trillion is completely off the charts. We must have a serious national debate about cutting government spending. And then we must dramatically cut spending before we become the next Greece. We cannot delay.