I Totally Agree

Yesterday the U.K Daily Mail posted an article about some recent comments by Senate Majority Leader Mitch McConnell. The Senator made it clear that the federal government was going to help the states with financial problems caused by the shutdown of the economy but not with financial problems caused by bad management.

The article reports:

Mitch McConnell said Wednesday that he is OK with states going bankrupt instead of increasing federal bailouts even further – as Democrats demand more money for state and local governments be included in the next coronavirus relief bill.

‘My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that,’ McConnell lamented.

‘That’s not something I’m going to be in favor of,’ he continued in an interview with conservative radio talk show host Hugh Hewitt Wednesday.

‘I would certainly be in favor of allowing states to use the bankruptcy route,’ the Kentucky Republican senator said. ‘It saves some cities. And there’s no good reason for it not to be available.’

Many of the states looking for bailouts need bailouts because of unfunded liabilities such as pension funds and retiree medical expenses. The only way these problems are related to the coronavirus is that there is reduction of tax revenue coming in. However, these problems were eventually going to occur with or without the coronavirus.

The article notes:

He also insisted, however, that he didn’t want to send money to states just to have them used the money to bail themselves out of preexisting issues, like a pileup of pension debts.

‘You know, we’ll certainly insist that anything we’d borrow to send down to the states is not spent on solving problems that they created for themselves over the years with their pension programs,’ McConnell told Hewitt.

‘There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations,’ he continued.

The Senate Majority Leader said he knows that states’ would rather have money given to them by the federal government in another large-scale coronavirus stimulus package.

I agree with Senator McConnell. Each state is responsible for its own financial situation. That’s part of what federalism is about. States who have managed spending better will come through this crisis in better shape. It is my guess that states that have consistently mismanaged money and raised taxes will have people moving out of their states in the coming months.

Never Let A Crisis Go To Waste

If you look at the people who oppose voter id laws, they tend to be Democrats. I’m not accusing them of anything, but I do wonder why they would oppose something that would protect the votes of all Americans. Well, the coronavirus crisis has caused those who oppose voter id laws to take things a step further.

Just The News posted an article yesterday with the following headline, “Democrats pushing harder for ‘Vote by mail’ in November election.” I don’t mean to be cynical, but I believe that would be the end of honest elections.

The article reports:

House Speaker Nancy Pelosi said that she would like to see “vote by mail” funding of up to $4 billion in Congress’ next coronavirus stimulus package for upcoming elections.

Pelosi suggested on Wednesday that the funding would to help states “expand” their vote-by-mail capabilities and allow voters to cast ballots by mail rather than show up in-person at the polls.

“Vote-by-mail is so important to our democracy so that people have access to voting and not being deterred, especially at this time, by the ammunition to stay home,” Pelosi said on a conference call. “We need at least $2 billion, $4 billion is probably what would really democratize our whole system.”

On Tuesday, Pelosi said she does not know why anyone would oppose voting by mail in the next election.

Aside from the obvious problem of voter fraud, why does Speaker Pelosi think we will still be under threat of the coronavirus in November? I realize that the disease may make a comeback in the fall, but I suspect that by that time enough Americans will have developed immunity to the disease to minimize the problem or we will have learned how to successfully deal with the disease so that ‘social distancing’ will be a distant memory.

Because of their recent strong turn to the left, Democrats have lost a lot of American voters. The party that was previously the party of the working man has totally forgotten its roots. The only hope for a strong Democrat party in the future is illegal aliens voting or election fraud. Until the Democrats turn back toward the center, they will be a dying party. That is the reason voting by mail looks good to them.

Your Tax Dollars At Work

On Thursday, Just The News posted an article about some of the things the National Institute of Health (NIH) is spending your tax money on.

The article reports:

On a steamy summer day inside the lecture auditorium of the storied National Institutes of Health headquarters, Dr. Michael Bracken delivered a stark message to an audience that dedicated its life, and owed its living, to medical research.

As much as 87.5% of biomedical research is wasted or inefficient, the respected Yale University epidemiologist declared in a sobering assessment for a federal research agency that spends about $40 billion a year on medical studies.

He backed his staggering statistic with these additional stats: 50 out of every 100 medical studies fail to produce published findings, and half of those that do publish have serious design flaws. And those that aren’t flawed and manage to publish are often needlessly redundant.

The article notes where the NIH has spent money instead of researching cures for a coronavirus pandemic:

As you weigh that question, consider this: In the 15 years since evidence first emerged that drugs like chloroquine might help in a coronavirus pandemic, NIH spent:

Just two days ago, in the midst of surging coronavirus deaths in America, NIH released a joint study by its National Cancer Institute and the National Institute on Aging that came to a heady conclusion: If you walk more, you are likely to live longer.

If the NIH had investigated chloroquine fifteen years ago, we might not have governors forbidding doctors to use it to treat coronavirus. It really is time to go through the federal budget line by line and get rid of stupid research projects and useless programs. We could probably pay for the stimulus package with what we cut and have money left over.

 

How Does This Statement Make Sense?

Yesterday I posted an article that included the following:

…Newly-elected Rep. Rashida Tlaib (D-MI) also endorsed impeaching Trump on her first day in office, according to The Nation, which described Tlaib as calling for “immediate steps” to remove the president from the White House.

“Each passing day brings more pain for the people most directly hurt by this president, and these are days we simply cannot get back. The time for impeachment proceedings is now,” Rep. Tlaib declared.

I really am confused about how this president is hurting people. I am further confused by looking at Representative Tlaib’s statement in view of some economic news that was reported today.

For instance, CNN is reporting today:

US employers added 312,000 jobs in December, well above what economists expected and underlining that the American economy remains strong despite recent market turbulence.

The unemployment rate rose to 3.9% as more people were looking for work. It had been at a 50-year low of 3.7% for two of the last three months.

Employers added 2.6 million jobs in 2018, compared to 2.2 million in 2017. Revisions to the October and November estimates added an additional 58,000 jobs to the 2018 total.

…Paychecks grew as employers raised wages to attract new workers. Average hourly pay was up 3.2% compared to a year earlier. The average number of hours people worked also edged up.

…The unemployment rate rose because more than 400,000 people joined the labor force looking for jobs. The percentage of the working-age people in the work force matched a five-year high.

“Yes, the nation’s unemployment rate rose to 3.9%, but for the best of reasons,” said Mark Hamrick, Bankrate.com senior economic analyst. “That’s a deal we’ll take if more people are participating in the workforce.”

The chart that I watch to see how things are going is from the Bureau of Labor Statistics. It is the chart of the Workforce Participation Rate. It indicates how many Americans are actually part of the workforce. This is the chart:

Note that we have reached the 63.1 percent participation rate only three times since 2014. When President Obama took office, the rate was 66.2. By the time President Obama left office, the rate was 62.7. That was after the federal deficit doubled due to the stimulus package that was supposed to create jobs.

The House of Representatives has a choice–they can either join in the efforts of President Trump to improve the American economy and the lives of American workers, or they can do everything they can to slow it down. Unfortunately, the new rules they are putting in place will bring us laws and policies that will slow the economy down. That is unfortunate–Americans deserve better, even though they elected these people.

A Chart That Tells It All

The chart below was posted in the Wall Street Journal yesterday:

image

The chart is based on numbers from the International Monetary Fund. The chart is contained in an article by Arthur Laffer about the impact of government stimulus spending.

In the article Mr. Laffer points out:

The four nations—Estonia, Ireland, the Slovak Republic and Finland—with the biggest stimulus programs had the steepest declines in growth. The United States was no different, with greater spending (up 7.3%) followed by far lower growth rates (down 8.4%).

These numbers are particularly relevant as countries around the world are debating whether or not another round of stimulus spending is the answer to the current recession.

Mr. Laffer states:

Still, the debate rages between those who espouse stimulus spending as a remedy for our weak economy and those who argue it is the cause of our current malaise. The numbers at stake aren’t small. Federal government spending as a share of GDP rose to a high of 27.3% in 2009 from 21.4% in late 2007. This increase is virtually all stimulus spending, including add-ons to the agricultural and housing bills in 2007, the $600 per capita tax rebate in 2008, the TARP and Fannie Mae and Freddie Mac bailouts, “cash for clunkers,” additional mortgage relief subsidies and, of course, President Obama’s $860 billion stimulus plan that promised to deliver unemployment rates below 6% by now. Stimulus spending over the past five years totaled more than $4 trillion.

If you believe, as I do, that the macro economy is the sum total of all of its micro parts, then stimulus spending really doesn’t make much sense. In essence, it’s when government takes additional resources beyond what it would otherwise take from one group of people (usually the people who produced the resources) and then gives those resources to another group of people (often to non-workers and non-producers).

If the government wants the producers in our society to continue producing, it needs to understand how human nature and incentives work. If I can make more money by not working than I can for working, it doesn’t take a rocket scientist to figure out that I am less likely to work.

I think Mr. Laffer is on to something. Please read the entire article at the Wall Street Journal for more information on the impact of government stimulus programs.

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The Truth Comes Out–Unfortunately It’s A Bit Late

John Hinderaker at Power Line reported today on testimony given by Doug Elmendorf, head of the Congressional Budget Office to the Senate Budget Committee. Senator Jeff Sessions reminded Mr. Elmendorf of the CBO’s projection, made around the time the stimulus bill was enacted, that the measure would have a negative long-term impact on economic growth. Elmendorf confirmed that this is still the view of the CBO.

The article at Power Line contains a video of the testimony. So let me get this straight–we spend $800 billion-plus dollars, the unemployment rate is still at 9 percent or more, and the spending will have a long-term negative impact on economic growth. Where do we go to get our money back?

 

 

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