Tag Archives: budget deficit

We Need Fiscal Responsibility In Washington

Posted on by

On Friday, The Washington Examiner posted an article about this year’s budget deficit. One of the conclusions that can be drawn from the numbers is that so far electing Republicans to the House of Representatives has not had any impact (actually that’s because the lame-duck Democrat Congress passed bills that limited the 2023 Congress’ ability to curtail spending). However, now we have a speaker who seems to be less likely to continue previous shenanigans. The next few weeks are going to be very interesting in terms of the budget process.

The article reports:

The United States is increasingly losing the war against red ink.

Per new Treasury Department figures, the U.S. government is courting a worsening fiscal crisis. Officially, Treasury Secretary Janet Yellen said the federal government ran a $1.7 trillion deficit for fiscal 2023, which ended Sept. 30. That’s up from a $1.4 trillion federal budget deficit posted in 2022.

But as highlighted by the Committee for a Responsible Federal Budget, Yellen’s math ignores another $300 billion in debt incurred by President Joe Biden’s student debt cancellations, bringing the actual total of the deficit under the president to a full $2 trillion. Fix that adjustment for fiscal 2022, and that year’s deficit amounted to a little less than $1 trillion.

This means that in just one year, sans recession and sans war, the federal government under Biden managed to double the deficit by more than $1 trillion. And in large part, it’s all thanks to his embrace of inflation, or at least inflationary spending.

Broadly speaking, the explosion of our national debt, which is now the size of the nation’s annual GDP, is primarily driven by our growth of government spending. While the rest of the nation pays handsomely for inflation with their paychecks, reduced in real terms of purchasing power, our wealthiest generation profits from the pockets of taxpayers. Thanks in large part to the cost-of-living adjustments for our entitlement programs, the three greatest categories of federal budget outlays — Social Security ($1.4 trillion), Medicare ($848 billion), and Medicaid ($616 billion) — grew by 11%, 12%, and 4%, respectively, from just last year.

The article concludes:

The stratospheric surge in bond yields should serve as a warning to Washington that even if the Fed won’t force the government to slow down the spending, the nation’s creditors will not continue to bankroll Uncle Sam without him paying a hefty premium for the privilege. While underlying demographic trends and the inherent, gerontocratic structure of entitlements predestined the nation to a certain fiscal fiasco long before the pandemic, the bipartisan embrace of wartime borrowing, and then Biden’s decision to double down on inflationary policy, have put the country on the path where not even the Fed can fight the deficit disaster on its own.

If Washington won’t listen to the Fed, perhaps it will begin to listen to creditors as the coffers continue to run dry.

We can’t afford to fund wars all over the world. The defense contractors love it, but the country will be destroyed by the debt incurred.

When Fact Checkers Check President Biden

Posted on by

Recently President Biden made a speech where he claimed that Bidenomics was working for everyone–inflation was down, jobs were up, etc. Well, that sounds wonderful, but the numbers tell a different story.

Issues & Insights reported:

The middle class made huge gains during the “trickle-down” Reagan boom and was making huge gains during the Trump boom until the Biden-backed COVID lockdowns gutted it.

Truth is, the only way Biden can make the case for “Bidenomics” is by lying. Examples:

    • “U.S. has had the highest economic growth rate, leading the world economies since the pandemic.”

Except it didn’t. The U.S. ranks 146th in real GDP growth in the world so far this year, came in 151st place last year, and was 66th in 2021, according to the International Monetary Fund.

    • “We created 13.4 million new jobs.”

Also false. Because almost 10 million of those were simply refilled jobs lost during the pointless COVID lockdown. Under Biden, the number of net new jobs is less than 4 million — which is nothing to brag about, given that the working-age population has grown by 6.8 million since Biden took office.

    • “Americans are back to work who’ve been on the sidelines, and they want to come back.”

Another falsehood. There are almost 10 million people who’ve dropped out of the labor force as of today, which is 2.7 million higher than it was just before all the COVID lockdowns.

    • “Just in my first two years in office, my team and I have reduced the deficit by $1.7 trillion.“

His biggest lie yet. As we pointed out in this space earlier, a Congressional Budget Office report released at the start of this year showed that “Biden sharply increased the deficit last year, this year, and next year, and he has set the country on course to add a total of $5.45 trillion to the federal deficit over the following decade.”

The only thing that Biden said that was truthful in his speech is that “Bidenomics is working.”

It’s working all right, assuming that Biden’s plan was to destroy America.

Please follow the link to the article. It includes a number of charts that actually illustrate what has happened to the American economy since 2021.

I Wondered About This When He Said It

Posted on by

There were a lot of misleading statements in the State of the Union address on Tuesday. On Tuesday, The Wall Street Journal posted an article about one of these statements.

The article reports:

Presidents typically embellish their achievements during their State of the Union addresses, but President Biden’s pose as a budget deficit hawk is one for the ages.

“By the end of this year, the deficit will be down to less than half what it was before I took office,” he said, adding that he will be “the only President ever to cut the deficit by more than one trillion dollars in a single year.”

That’s not by choice.

The article notes:

This assumes Congress doesn’t enact his Build Back Better plan or the more Covid relief he’s asking for.

He’s also using the fiscal 2020 budget as his benchmark. Congress passed $2 trillion in Covid relief in March 2020 to prevent a recession. Both parties piled on $900 billion more that December, and Democrats in March 2021 ladled out nearly $2 trillion more. The deficit is declining because Congress blew it out for two years.

…Inflation is always good for government coffers. Receipts are up 28% during the first four months of this fiscal year. But the Congressional Budget Office still projects deficits to exceed $1 trillion on average over the next decade.

The article concludes:

Mr. Biden is hoping the deficit reduction ruse will lure West Virginia Sen. Joe Manchin to go along with more spending. Don’t fall for it, sir.

Remember, statistics can pretty much be manipulated to say anything a statistician wants them to say. President Biden evidently has some good statisticians in his speech writing department.

When Life Gives You Lemons…

Posted on by

I think we all admire people who are able to turn a difficult situation into something enjoyable. The good news story of the week illustrates that principle.

Yesterday Steven Hayward posted an article at Power Line Blog that illustrates one aspect of the coronavirus lock-down that most of us had not considered.

The article reports:

But no, by far the the best stand-up-and-cheer-for-‘Murica story this week is “Team Allegedly Sets New ‘Cannonball Run’ Record on Empty Highways During Coronavirus Lockdown.” Now that’s making the best of the bad situation, American-style! Me, I’m getting three weeks to the gallon on my car right now, and so admire and envy the lust for speed on the open road.

But it sets me to wondering whether the American economy will put the pedal to the metal when the lockdown ends, such that we’ll experience an economic Cannonball Run. We’re in uncharted territory, but unfortunately I wouldn’t bet big on a big boom coming out the other side.

Let’s consider one tiny bit of microeconomic data, and one bit of lagging macroeconomic data, that ought to make us worry. The microeconomic data is my own monthly credit card statement. For the first time in my life, I’m looking forward to getting my monthly credit card statement later this month. I’ve been too busy to check online, but I expect I’ll have a credit balance for the first time ever, on account of all the plane fights and hotel rooms I’ve had canceled and refunded over the last month, on top of the restaurant meals I’m not having and other retail purchases. I’m not even buying many books at the moment, since Amazon and other online sellers are delaying book shipments in favor of more urgent items (though for me, what could be more urgent than another book?).

Unfortunately the article ends on a discouraging note:

The point is, even if 80 percent of the pre-crisis economy comes back by mid-summer, you’re still looking at a major recession, if not a near depression. Mauldin, by the way, has been predicting for the last couple years that a recession would see the federal budget deficit soar to $2 trillion. Now that would be regarded as “the good old days.” This year’s federal budget deficit is more likely to be over $4 trillion. And that may be optimistic.

I am hoping he is wrong. What we may see is a slingshot effect–people who have been holding on to their money because of uncertainty may feel comfortable spending some of what they have been holding on to. There will also be the desire to get out of the house–go anywhere! The American economy is consumer driven. If the consumers come out of hiding when the lock-down ends, I believe the economy will recover by the fall. I am also hopeful that various areas of the economy will begin to open up in the very near future. A lot of what has gone on under this pandemic is illegal under the U.S. Constitution. The thing I fear more than an economic downturn is the precedents that are being set that may pave the way for limiting the God-given rights of Americans.

Common Sense In Immigration Policy

Posted on by

On Monday CNBC posted an article about a Supreme Court decision regarding President Trump’s immigration policy.

The article reports:

The Supreme Court said Monday that it will allow the Trump administration’s “public charge” rule to take effect after the immigration policy had been blocked by lower courts.

The 5-4 vote was divided along partisan lines, with the court’s four Democratic appointees indicating that they would not have allowed the policy to be enforced.

The court’s five conservatives, including Chief Justice John Roberts, formed the majority siding with the administration. The decision came as Roberts was presiding over President Donald Trump’s impeachment trial in the Senate.

The rule, which was proposed in August, will make it more difficult for immigrants to obtain permanent residency, or green cards, if they have used or are likely to use public benefits like food stamps and Medicaid.

Under previous federal rules, a more narrow universe of public benefits, such as cash assistance and long-term hospitalization, were considered in determining whether an immigrant was likely to become a “public charge.”

The following statistics are from the Center for Immigration Studies:

  • No single program explains non-citizens’ higher overall welfare use. For example, not counting school lunch and breakfast, welfare use is still 61 percent for non-citizen households compared to 33 percent for natives. Not counting Medicaid, welfare use is 55 percent for immigrants compared to 30 percent for natives.
  • Welfare use tends to be high for both newer arrivals and long-time residents. Of households headed by non-citizens in the United States for fewer than 10 years, 50 percent use one or more welfare programs; for those here more than 10 years, the rate is 70 percent.
  • Welfare receipt by working households is very common. Of non-citizen households receiving welfare, 93 percent have at least one worker, as do 76 percent of native households receiving welfare. In fact, non-citizen households are more likely overall to have a worker than are native households.1
  • The primary reason welfare use is so high among non-citizens is that a much larger share of non-citizens have modest levels of education and, as a result, they often earn low wages and qualify for welfare at higher rates than natives.
  • Of all non-citizen households, 58 percent are headed by immigrants who have no more than a high school education, compared to 36 percent of native households.
  • Of households headed by non-citizens with no more than a high school education, 81 percent access one or more welfare programs. In contrast, 28 percent of non-citizen households headed by a college graduate use one or more welfare programs.
  • Like non-citizens, welfare use also varies significantly for natives by educational attainment, with the least educated having much higher welfare use than the most educated.
  • Using education levels and likely future income to determine the probability of welfare use among new green card applicants — and denying permanent residency to those likely to utilize such programs — would almost certainly reduce welfare use among future permanent residents.
  • Of households headed by naturalized immigrants (U.S. citizens), 50 percent used one or more welfare programs. Naturalized-citizen households tend to have lower welfare use than non-citizen households for most types of programs, but higher use rates than native households for virtually every major program.
  • Welfare use is significantly higher for non-citizens than for natives in all four top immigrant-receiving states. In California, 72 percent of non-citizen-headed households use one or more welfare programs, compared to 35 percent for native-headed households. In Texas, the figures are 69 percent vs. 35 percent; in New York they are 53 percent vs. 38 percent; and in Florida, 56 percent of non-citizen-headed households use at least welfare program, compared to 35 percent of native households.

At this point I need to say that I am not against helping people in need, but we do need to get our priorities in order. Our Veterans’ Administration health system is horrible. It is underfunded and does not have the facilities necessary to meet the needs of our returning veterans. We have been at war for eighteen years, and we have broken faith with those who have fought those wars. Shouldn’t taking care of those veterans be a higher priority than taking care of people who are not American citizens? Look at the budget deficits we are running–we can’t afford to do both.

I applaud the Supreme Court for upholding a common-sense approach to immigration.

About The Taxes You Pay On Your Social Security

Posted on by

In the past few days I have been getting notices on my phone to sign a petition to end taxing Social Security. I normally support smaller government, less spending, and lower taxes, but in this case, I want to keep taxing Social Security. I want to keep taxing Social Security until the federal budget is balanced. Who do I hold responsible for the unbalanced budget and the increasing debt? The voters. I will explain.

There are a lot of factors that went into my deciding that Social Security should be taxed (despite the fact that the money has already been taxed once). I will attempt to list them here. The majority of today’s Social Security recipients are the baby boomers. Those born in 1957 or before are now eligible to collect Social Security. In 1971, the voting age was lowered to 18, and those people born in 1957 began voting in 1975. The gold standard ended in 1973. Up until that point, budget deficits were running between $1 billion and $23 billion.

I want to focus on the baby boomers. We were the generation that ‘had it all.’ We were the ‘me generation.’ Our parents had come through the depression and World War II and enjoyed the prosperity of the 1950’s. We were consumers. As adults, we began the serious use of credit cards. We took out student loans to send our children to college. We were seriously into instant gratification. We were idealistic–we wanted to end poverty. We also wanted to end communism. We tried to do both at once and spent money we didn’t have. In the 1970’s and 1980’s the deficits grew rapidly. We continued to elect people who helped them grow. We complained when they grew, but continued to elect people who overspent. We are the ones currently collecting Social Security. We deserve to be taxed on it because we are the ones who elected the people who have run up the deficit.

So who is responsible for the rapidly growing federal debt–the voters. Don’t talk to me about the money or lobbyists in politics–if your Congressman is voting against your interests because of lobbyists, it is your responsibility to vote him out of office. When the Republicans caved on repealing ObamaCare, they deserved to be voted out of office. We need to keep voting people out of office until we get what we want.

I would love for Social Security to be tax free, but let’s put people in Congress who will control spending first!

Walter Jones Will Be Missed

Posted on by

Walter Jones was my Congressman. I met him on various occasions. He was a humble man who worked hard to represent the people of eastern North Carolina. I know of more than one instance when he went out of his way to help someone cut through the red tape of government to get help with an issue.

Tonight The Daily Caller posted an article about his death.

The article notes:

Jones, who represented his North Carolina district for over 20 years, was fighting off several illnesses over the last few months, according to Fox News, and was granted a leave of absence in late 2018 after missing several votes on the floor.

A strong supporter of the U.S. Marines, Jones previously served in the North Carolina General Assembly. His district has numerous military bases, and while he initially supported the war in Iraq, he eventually sided with Democrats calling for the withdrawal of troops from the country. 

…Back in 2011, Jones was one of 10 members of Congress to file a lawsuit against President Obama in an effort to stop the U.S. from sending troops to Libya, calling the U.S. bombing an “abuse of power.”

“Libya had done nothing to America,” Jones had said. “I realize they’ve got an evil leader, Qaddafi, but still, you don’t go around the world attacking countries because they have an evil leader.”

Any time a constituent spoke with Walter Jones, he told them how concerned he was about the budget deficit. He would not vote yes on any bill that increased the deficit. He was a man who represented the people in his district well and stuck to his principles.

Things To Notice

Posted on by

On October 15, The Wall Street Journal noted:

The U.S. government ran its largest budget deficit in six years during the fiscal year that ended last month, an unusual development in a fast-growing economy and a sign that—so far at least—tax cuts have restrained government revenue gains.

The deficit totaled $779 billion in the fiscal year that ended Sept. 30, up 17% from $666 billion in fiscal 2017, the Treasury Department said Monday. The deficit is headed toward $1 trillion in the current fiscal year, the White House and Congressional Budget Office said.

Deficits usually shrink during economic booms because strong growth leads to increased tax revenue as household income, corporate profits and capital gains all rise. Meantime, spending on safety-net programs like unemployment insurance and food stamps tends to be restrained.

In the last fiscal year, a different set of forces was at play as economic growth sped up. Interest payments on the federal debt and military spending rose rapidly, while tax revenue failed to keep pace as the Republican tax cuts for both individuals and corporations kicked in.

What you just read is totally misleading. The statement that ‘ tax revenue failed to keep pace as the Republican tax cuts for both individuals and corporations kicked in” is absolutely false. The two major parts of the problem are Congress’ lack of ability or willingness to cut spending and the fact that when the federal reserve raises interest rates, it increases the interest the government pays on the current debt, thus increasing the deficit. As far as the tax cuts are concerned, the facts are quite different from what The Wall Street Journal reported.

On October 16, Investor’s Business Daily reported:

Critics of the Trump tax cuts said they would blow a hole in the deficit. Yet individual income taxes climbed 6% in the just-ended fiscal year 2018, as the economy grew faster and created more jobs than expected.

The Treasury Department reported this week that individual income tax collections for FY 2018 totaled $1.7 trillion. That’s up $14 billion from fiscal 2017, and an all-time high. And that’s despite the fact that individual income tax rates got a significant cut this year as part of President Donald Trump’s tax reform plan.

True, the first three months of the fiscal year were before the tax cuts kicked in. But if you limit the accounting to this calendar year, individual income tax revenues are up by 5% through September.

Other major sources of revenue climbed as well, as the overall economy revived. FICA tax collections rose by more than 3%. Excise taxes jumped 13%.

The only category that was down? Corporate income taxes, which dropped by 31%.

Overall, federal revenues came in slightly higher in FY 2018 — up 0.5%.

Spending, on the other hand, was $127 billion higher in fiscal 2018. As a result, deficits for 2018 climbed $113 billion.

The underline is mine.

It’s the spending, stupid! We need a Congress that will curb spending and a Federal Reserve that will move slowly.

Two Posts About The State Of The Union Speech From Facebook Friends

Posted on by

I will post an analysis of the State of the Union speech later today, but this is a start:

MiliitaryAt SOTUThis screen shot is from bizpacreview. THIS was the exact response of our TOP military leaders at the EXACT moment Obama said that terrorists were not a threat to our nation’s existence. Houston, we have a problem.

The graphic below was posted by another friend:

StateOfTheUnion

Breitbart.com posted the following about President Obama’s claim that he has cut deficits:

“[W]e’ve done all this while cutting our deficits by almost three-quarters.” This is pure fiction. Obama has doubled the national debt, and it’s not because he cut the deficit. Rather, he spent staggering amounts of money in his first months in office–which he assigns, dishonestly, to the previous fiscal year, under George W. Bush. He “cut” (i.e. spent more gradually) from that spending, but only under protest, after Republicans took the House in 2010.

(Update: It is true that Obama’s 2015 budget deficit was about 25% of his 2010 deficit. But he referred to “deficits,” plural. Until last year, all of Obama’s deficits were worse than all of Bush’s deficits except for the last two.)

More to follow.

Another Reason We Have A Budget Deficit

Posted on by

I can’t believe that I am posting this story during the same week that I posted a story talking about proposed cuts to promised benefits to veterans and their families (rightwinggranny.com).

Yesterday the Daily Caller posted a story reporting that the U. S. Government has just spent $750,000 of taxpayer money to build a new soccer field for prisoners held at Guantanamo.

The article reports:

The field is reportedly half the size of a standard American football field and has been constructed so that detainees can have “maximum access” to it — about 20 hours a day — including secure passage to the field without a guard escort.

Navy Comander Tamsen Reese told the AP Tuesday the new field replaces a small recreational area in a part of the facility that is no longer used.

According to a Fox Guantanamo source, outdoor activity helps to “reduce behavioral problems” and limits the interaction between guards and prisoners.

Spending $750,000 on Guantanamo prisoners while denying American veterans things they were promised if they served twenty years seems a little lopsided to  me.

Enhanced by Zemanta