We Have A Spending Problem

On Monday, The Daily Signal posted an article about government spending. The article included five charts that illustrate the problem.

These are the charts:

When interest payments make up a quarter or our spending, we have a problem. We have been living beyond our means for so long that we will never get out of debt without drastic action. There have been various plans to cut the federal budget in the past–one of which simply required taking one penny away from every dollar. It is time to reconsider these plans and to reconsider shrinking federal employment by at least 10 percent. If companies are forced to cut back because of inflation, the federal government should also be required to reduce its size. We are becoming the economically illiterate consumer who pays the minimum payment on his credit card every month and wonders why the balance never goes down.

The Numbers That Are Not Being Shared By The Mainstream Media

On Thursday, Fox Business posted the following headline:

Layoffs surged 136% in January to second-highest level on record

The article reports:

The pace of job cuts by U.S. employers accelerated at the start of 2024, a sign the labor market is starting to deteriorate in the face of ongoing inflation and high interest rates.

That is according to a new report published by Challenger, Gray & Christmas, which found that companies planned 82,307 job cuts in January, a substantial 136% increase from the previous month. However, that is down about 20% from the same time one year ago. It marked the second-highest layoff total for the month of January in data going back to 2009.

“Waves of layoff announcements hit U.S.-based companies in January after a quiet fourth quarter,” said Andy Challenger, senior vice president of Challenger, Gray & Christmas. The cuts were “driven by broader economic trends and a strategic shift towards increased automation and AI adoption in various sectors, though in most cases, companies point to cost-cutting as the main driver for layoffs.”

According to the Bureau of Labor Statistics, the workforce participation rate has remained steady since December at 62.5, down from 62.8 in November. Generally hiring is up in November due to Christmas shoppers.

The article concludes:

Another source of layoffs in January was retail stores, which trimmed 5,364 positions in January, a significant increase from the 110 layoffs announced in December. 

The top reason cited for job cuts last month was restructuring; companies blamed stores closing and artificial intelligence for the layoffs, as well.

The labor market has remained historically tight over the past year, defying economists’ expectations for a slowdown. Although economists say it is beginning to normalize after last year’s blistering pace, it is nowhere near breaking. 

The findings precede the release of the more closely watched January jobs report from the Labor Department on Friday morning, which is expected to show that employers hired 180,000 workers, following a gain of 216,000 in December

The unemployment rate is expected to inch higher to 3.8%.

As more people are laid off, there will be less demand for consumer goods. This theoretically will slow inflation, but at the cost of the American people. If the government truly wanted to slow inflation without hurting the average American, they would cut government spending, but that is not likely to happen.

Can We Elect Argentina’s President As America’s President This Year?

On December 27th, Headline USA reported the following:

(Luis CornelioHeadline USA) Newly sworn-in Argentina President Javier Milei purged over 5,000 government bureaucrats, fulfilling a campaign pledge to reduce the size of the inflation-burdened federal government. 

According to the Spanish-language newspaper El Pais, Milei signed an executive order to halt the contracts of federal workers hired in 2023, likely targeting individuals hired by his former leftist predecessor.

The order came after the capitalist president vowed to rescue Argentina from widespread corruption, inflation and wasteful government spending. 

El Pais reported that some disabled and indispensable employees will be exempt from the layoffs. However, the Argentine government announced a comprehensive audit within the next 90 days, hinting at potential future layoffs. 

The article notes that President Milei has been compared to President Trump in that President Trump has also pledged to shrink the federal government if he is elected in 2024. It will be interesting to watch the consequences of such a drastic change.

Bidenomics And The Cost Of Buying A House

Although President Biden has attempted to buy votes from younger voters with his student loan bailout programs, in the process he has created inflation and interest rates that put buying a home out of reach for the very people he has tried to bribe.

On Monday, Breitbart posted an article about what has happened to monthly mortgage payments under President Biden.

The article reports:

The average monthly mortgage payment in Joe Biden’s America has soared to $3,322, per analysis from the Wall Street Journal.

That $3,322 is nearly double the average monthly mortgage payment when His Fraudulency assumed office. When former President Trump left office, the average monthly mortgage payment was $1,787.

The article includes the following Twitter post:

The article notes:

Those obnoxiously high mortgage payments are not only due to the Bidenflation caused by His Fraudulency’s lunatic government spending. There are other factors…

For those of you who vote Democrat and are currently pissing away all your money on rent because you can’t afford a home, riddle me this: What happens to the housing market when a president throws open our southern border to millions and millions of illegal aliens who need a place to live? Think hard now… Could it be that when you have a finite amount of something people want and then flood the country with millions more people who want it…? Yes, that’s right, dummies, the cost of that Something People Want explodes and that Something People Want becomes scarcer. And now you want it and can’t get it because you’re a dummy.

The second factor is this… Democrats hate single-family homes. This is why they use Climate Change to justify blocking the construction of new homes. Democrats want us all packed in cities in massive government housing complexes. By the way, they make no secret of this.

The final factor is this… This is all by design, dummies. Democrats know lunatic government spending creates lunatic inflation and that lunatic inflation destroys purchasing power and creates high interest rates that make it impossible for the middle class to purchase a home. Democrats also know that when you flood a country already dealing with a housing crisis caused by enviro-lies with millions of illegals, housing costs explode.

If you are a young American just entering the workforce full time, do yourself a favor and vote every Democrat (and RINO Republican) out of office. That is the only way you can secure your financial future.

When You Have Someone In The White House Who Does Not Understand Basic Economics…

On Wednesday, The Gateway Pundit posted an article about one of President Biden’s recent speeches. The President is most interesting when he is not reading his notes.

The article reports:

President Biden acknowledged Monday that prices are still “too high” and argued that companies should lower them after an 18% jump in consumer costs since he took office.

“We know that prices are still too high for too many things — that times are still too tough for too many families,” the 81-year-old said near the White House.

“We’ve made progress, but we have more work to do,” Biden added. “Let me be clear to any corporation has not brought their prices back down, even as inflation has come down, even supply chains have been rebuilt: It’s time to stop the price gouging and give the American consumer a break.”

The prices of some goods, such as food products, are expected to decline in the coming months, but periods of general deflation are rare in US history.

Biden previously used his bully pulpit to try to pressure oil companies to take action to lower gas prices last year.

The only one price gouging is the federal government–they call it taxing. The cause of our current inflation is government spending, but that is the one cause that Washington consistently refusing to examine.

We need a businessman in the White House and many more in Congress.

Solving the Debt Crisis

Author: R, Alan Harrop

The current debt default discussion is a good time for us to take an honest look at the extent of the problem. Here goes. The total federal debt in 1993 was 4.3 trillion dollars, today, thirty years later the debt is 32 trillion dollars. That is a 744% increase. It amounts to $91,430 for every man, woman and child. However, since only about 150 million people pay federal taxes, it amounts to $213,000 per taxpayer. I strongly suspect that your income and net worth has not increased 744% in the past 30 years. If you took the national debt of 32 trillion dollars and stacked them up, the stack would be 2,584 thousand miles high or 11 one-way trips to the moon. Clearly, this is unsustainable.

The question is, what do we do about it. As Reagan once said: “The federal government does not have a revenue problem, it has a spending problem.” Assuming our elected leaders are serious about stopping this reckless spending (which is questionable at best), here are some things that can be done: (1) Reduce the budget of all federal agencies by 5% a year, exempting the Department of Defense. (2) Eliminate the federal Department of Education, which has a budget of $87 billion dollars. This agency was started during the Carter administration and is not needed, since the states have constitutional authority over education. (3) Reduce the budget of the FBI by 50% and refuse to fund their request to fund a new headquarters that would be larger than the current Pentagon. This should include removing arresting authority (started in 1934) from the FBI and returning it to a strictly investigative body with arresting authority remaining with local law enforcement. (4) Eliminate granting welfare, and other social programs to illegal aliens. They broke the law to get here and should be identified and returned to their country of origin. Illegal aliens currently cost the taxpayers $151 billion each year, and that number is growing exponentially. (5) Implement a strict work requirement for any healthy person who is currently receiving welfare payments. Too many people are staying home and refusing to take available jobs. According to the Heritage Foundation, the average family of four receives over $70,000 in total welfare payments per year. (6) Stop weaponizing non-law enforcement federal agencies such as the IRS, State Department, Dept of Commerce, etc.

There are plenty of other places to cut spending, such as grants to various institutions. This represents only a partial list of what could be done and needs to be done before the entire system collapses. No sane individual would run their household budget like the politicians run the federal government. Much of this wasteful spending is initiated and passed to help politicians get re-elected. This is one of the main reasons why there is increasing demand by some for term limits. The Republicans in the House are fighting to at least begin the process of controlling spending. Let’s hope they succeed.

What is long overdue, is an amendment to the Constitution requiring a federal balanced budget. A Convention of States may be the only way this will ever be accomplished.

 

Some Basic Facts About The Debt Ceiling

Issues & Insights is a blog that was started by the team that for decades had produced IBD Editorials at Investor’s Business Daily. They are one of the most reliable sites on the web for financial and political information.

On Monday, Issues & Insights posted an article about the debt ceiling ‘crisis.’ The article pointed out a lot of basic facts that are being overlooked in the debate.

The article notes:

At the heart of all fearmongering over the debt ceiling “crisis” is the claim that if the federal government can’t borrow more money it won’t be able to pay interest on its existing debt, leading to a default.

But that’s poppycock. The government will collect more than a trillion dollars over the next three months. (It collected $638 billion in taxes in April alone.) That will be more than enough to pay interest on the debt. And it will be enough to pay all Social Security benefits, Medicare and Medicaid bills, welfare checks, food stamps. There will even be enough money to pay for Joe Biden’s new electric car subsidies.

There just won’t be any money left for anything else. Nothing for the military, infrastructure, education, the environment, law enforcement, or any other program the federal government currently operates.

That’s because, as it stands today, every penny collected in taxes goes to pay interest on the debt and a category described as “payments for individuals.” Everything else is paid for with borrowed money.

…This year, the federal government will collect $4.8 trillion in taxes, according to the Office of Management and Budget.

It will spend $4.2 trillion on “payments for individuals,” and $661 billion in interest on the national debt.

Everyone knows about interest payments. But what are these “payments for individuals”?

As the budget document explains, payments for individuals:

Are federal government spending programs designed to transfer income (in cash or in-kind) to individuals or families. To the extent feasible, this category does not include reimbursements for current services rendered to the Government (e.g., salaries and interest).

In 1946, “payments for individuals” accounted for less than 11% of federal spending. By 1991, they reached 50%. In 2014, they topped 70% for the first time and have been bouncing around that level ever since.

The article also notes:

The vast bulk of these “payments for individuals” involve middle-class entitlements such as Social Security and Medicare, which are paid for in volume by … the middle class. Only a fraction of the money (26%) targets the poor and needy for programs such as Medicaid, welfare payments, food stamps, earned income tax credits.

Worse, some programs, Medicare, for instance, are regressive. A paper published by the National Bureau of Economic Research concluded that “Medicare has led to net transfers from the poor to the wealthy, as a result of relatively regressive financing mechanisms and the higher expenditures and longer survival times of wealthier beneficiaries.”

This is all by design. The left desperately wants to increase dependency on government, and there’s no better way to do that than through income redistribution. Take as much money away from people as possible, then give it back to them in the form of a “benefit.”

Please follow the link to read the entire article. We don’t just need to cut spending–we need to overhaul the entire federal budget and follow the lawful budget process.

Federal Spending Is Out Of Control

The Independent Women’s Forum posted an article today about the $1.9 trillion dollar “stimulus package.” The article includes the graph below:

This is how the system works–no Washington swamp creature would dare vote against Covid relief, so the bill gets passed. The American dollar loses more of its value because of the increased debt and increased printing of money. People in the lower middle class and lower class struggle to pay their bills because their dollars are worth less. Politicians in Washington feather the nests of their friends and lobbyists, and most Americans wonder why they are broke.

The article includes a list of some of the spending in this bill:

  • 60,000,000 for NASA 
  • $75,000,000 for the Endowment for the Arts—because we’ve been able to enjoy so many artistic expressions during the pandemic. 
  • $75,000,000 for the National Endowment for the Humanities 
  • $25,000,000 for “Salaries and Expenses” for the House of Representatives 
  • $324,000,000 for State Department Diplomatic Programs 
  • $95,000,000 for “Operating Expenses” for the Agency of International Development 

Ask yourself, “Would these things pass a stand-alone items? Not likely. So they put them in a bill that no one will dare vote against. As a result of this, the Covid Relief bill simply funds Democrat pet projects and leaves the American people further in debt.

The article concludes:

The list goes on and on. Yes, the CARES Act did provide some important relief for Americans. But it also included an enormous amount of funding for other groups and organizations that could not possibly be connected to the coronavirus pandemic.

Unfortunately, this new bill being pushed by the Democrats and the Biden administration takes a similar, if not even worse, approach.

Pandemic stimulus and funding should be targeted, temporary, and flexible. Clearly many people continue to struggle, particularly small businesses as seen by the wild success of the Barstool Sports Fund. Congress should focus on helping those who need it most, not bailing out their allies and enforcing their wish list upon Americans who will have to foot the bill in the end.

Festivus Report’ of government excess

Yesterday The Washington Examiner reported that Senator Rand Paul released his annual Festivus Report, airing his grievances of government excess and spending.

The article lists some of the details of the report:

“Spending was about 50% higher than last year, and payments of interest on the public debt remained extremely high at $387 billion. If you laid out that many $1 bills end to end, it’d be enough to wrap around the earth 1,506 times,” Paul wrote. “Our debt puts at risk the long-term solvency of major programs such as Social Security. And why? To pay for test tubes for COVID tests that turn out to be soda bottles?”

Paul’s report documented more than $54.7 billion worth of “totally wasted money.” He points to specific projects and studies that received federal funding and identifies the total value of grants used to conduct the research.

That amount of money, Paul said, was enough to fund the entire Treasury Department for three years, the Department of Housing and Urban Development for six months, or buy every citizen a 40-inch television.

The “waste” spending varies from failed international missions, such as $8.6 billion spent in Afghanistan to boost counternarcotics efforts or $23.9 billion spent “trying unsuccessfully to replace the Bradley [Fighting Vehicle],” to oddities including $1.3 million researchers accessed to determine whether people would knowingly eat ground-up bugs or $2 million spent testing whether hot tubs lower stress.

The report identified $896,000 spent by the National Institutes of Health “to give cigarettes to adolescent kids to test their reactions to various levels of nicotine in the cigarettes.”

The article concludes:

“Congress has every tool it needs to fight and end government waste,” Paul’s report stated. “It’s just a matter of finding the willpower to use them. Rest assured, I will keep fighting for fiscal sanity and providing my colleagues in Congress with the opportunity to find their fiscal backbone!”

Americans already pay more money in taxes than the medieval serfs did to their manor lords. Unless the spending is brought under control, our children and grandchildren will be slaves to the government. Congress controls the spending. Until voters elect congressional representatives who are willing to cut spending, things will not change.

Where Do Our Taxpayer Dollars Go?

Citizens Against Government Waste defines baseline budgeting as follows:

“Baseline budgeting” is one of those Washington terms that sounds very dry and boring. In reality, baseline budgeting is one of the most sinister ways that politicians claim to cut spending when they are actually increasing spending. The Congressional Budget Office defines the baseline as a benchmark for measuring the budgetary effects of proposed changes in federal revenue or spending, with the assumption that current budgetary policies or current services are continued without change. The baseline includes automatic adjustments for inflation and anticipated increases in program participation. Baseline, or current services, budgeting, therefore builds automatic, future spending increases into Congress’s budgetary forecasts.

Baseline budgeting tilts the budget process in favor of increased spending and taxes. For example, if an agency’s budget is projected to grow by $100 million, but only grows by $75 million, according to baseline budgeting, that agency sustained a $25 million cut. That is analogous to a person who expects to gain 100 pounds only gaining 75 pounds, and taking credit for losing 25 pounds. The federal government is the only place this absurd logic is employed.

Just the News posted an article (updated today) about one result of this practice.

The article reports:

The Golden Horseshoe is a weekly designation from Just the News intended to highlight egregious examples of wasteful taxpayer spending by the government. The award is named for the horseshoe-shaped toilet seats for military airplanes that cost the Pentagon a whopping $640 each back in the 1980s. 

This week, in honor of pending federal budget negotiations, our award is going to the entire U.S. government for spending a total of $91 billion taxpayer dollars this month last year, in order to ensure their individual agency and organization budgets would not shrink, as Congress negotiated a new deal.

Every year, in corporate offices around the country, departments coming up on the end of their fiscal term rush to spend any additional funds that might be left on hand, lest they be left with a surplus of cash that would lead their corporate overlords to believe they could do just as much work during the next year, with fewer dollars. Parts of the federal government face the same problem every year, as Congress spends each September renegotiating the federal budget to keep the government funded.

The article concludes with some specifics:

While all parts of the government should assume appropriate responsibility for their year-ending spending sprees, it is worth noting that in 2019, 81% of all contract spending occurred across just five departments of government. Of the $91 billion spree, the Pentagon spent $57.5 billion, Health and Human Services spent $5.7 billion, Veterans Affairs spent $3.8 billion, the General Services Administration spent $3.6 billion, and Homeland Security spend $3.5 billion.

In 2019, the federal government spent $575 billion in total on contracts. So, about one sixth, or just under 16%, of those dollars were spent during the last month of the fiscal calendar. By a long shot, September typically sees the highest annual monthly rate of spending from the federal government.

The federal government is once again entering the period of the year when, despite massive coronavirus relief spending, agencies will throw caution to the wind and spend like there’s no fiscal tomorrow.

And that, my friends, is why the deficit is growing and the value of our money is shrinking.

It’s The Spending

On Wednesday, CNS News posted an article about the income and revenue of the federal government from October 2019 to January 2020.

The article reports:

The federal government set records for both the amount of taxes it collected and the amount of money it spent in the first four months of fiscal 2020 (October through January), according to data released today in the Monthly Treasury Statement.

So far in fiscal 2020, the federal government has collected $1,178,800,000,000 in total taxes.

The previous high for total federal taxes collected in the first four months of the fiscal year came in fiscal 2018, when the Treasury collected $1,172,088,080,000 in constant December 2019 dollars.

While the federal government was collecting that record $1,178,800,000 in federal taxes in October through January of this fiscal year, it was spending a record total of $1,567,985,000,000.

…In the first four months of this fiscal year—while collecting a record $1,178,800,000,000 and spending a record $1,567,985,000,000—the federal government ran a deficit of $389,185,000,000.

The Department of Health and Human Services led all federal agencies in spending in the first four months of fiscal 2020 with outlays of $443,759,000,000. The Social Security Administration was second with $380,623,000,000 in spending. The Defense Department and Military Programs was third with $237,702,000,000.

Spending is controlled by the House of Representatives. It is our responsibility to elect representatives who will cut spending. This has nothing to do with what political party a person belongs to–it has to do with whether or not they are willing to take steps to cut government spending. It has to do with campaign contributions that encourage the spending. It’s time to hold Congress accountable. If we don’t get government spending under control, we will be carrying briefcases of cash to the grocery store because the value of our dollars will crash.

Hope For The Deficit

Yesterday The Daily Caller reported that the Trump administration’s budget for fiscal year 2021 will take steps to curb what it calls “wasteful” government spending, including cutting funds for, and in some cases outright eliminating, dozens of federal programs, grants and endowments, documents reviewed by the Daily Caller show.

The article reports:

For the first time, the budget features an entire chapter devoted to saving taxpayers’ money and defines five clear categories of waste requiring attention.

The administration used new guidelines to identify fiscally inefficient programs. The cuts will target agencies with overlapping and similar goals, agencies that provide similar or identical services to the same group of recipients, programs without a clearly defined federal role, federal programs that mirror state-level initiatives and erroneous payments.

The budget calls for eliminating the following programs entirely:

    • National Institute for Occupational Safety and Health’s Education and Research Centers
    • Department of the Interior’s Highlands Conservation Act Grants
    • National Park Service’s Save America’s Treasures Grants
    • National Endowment for the Arts Endowment for the Humanities
    • Corporation for National and Community Service (including AmeriCorps)

The administration also identified several categories of government spending in desperate need of additional government oversight, including travel, employee conferences or workshops, subscriptions, marketing, entertainment, office refreshments and end-of-year “Use It or Lose It” spending. The chapter cites expenditures by 67 federal agencies from December 30-31, 2018 which totaled $97 billion and included more than $15 million worth of fine china, lobster, alcohol, recreational, musical, and workout equipment.

The article notes that the President has had assistance in setting out his program:

The nonprofit group Open the Books, which assisted OMB in calculating spending inefficiencies, lauded the administration for “declaring war on federal waste.”

“The president’s budget to Congress is the first step toward defending the American taxpayer and stopping egregious waste, fraud, duplication, and taxpayer abuse. It’s a target rich environment,” said Open the Books CEO Adam Andrzejewski when asked about the cuts. “Our team of auditors at OpenTheBooks.com is very proud that our oversight reporting and examples of federal taxpayer abuse are being used by the president and the Office of Management and Budget to spearhead cuts. We applaud the president for taking action.”

Getting this done would be an incredible accomplishment and eventually a real benefit to American taxpayers.

One Of Many Reasons Government Spending Keeps Increasing

On September 24, The Daily Signal posted an article about some recent comments made by Senator Joni Ernst. The Senator highlighted the practice of ‘Christmas in September’ spending by government agencies. There are some problems with the way our federal government’s budgeting system works. There is something called ‘baseline budgeting.’ This simply means that your starting point for your yearly budget is how much you actually spent of last year’s budget. Therefore, unless you want your budget to be cut this year, you had better spend all of the money you had in your budget last year. This means that as the fiscal year draws to a close, government agencies have the incentive to spend wildly. It also results in statements that actually make no sense but are widely accepted as fact. For instance, if I ask for a ten percent increase in my budget and only get a five percent increase, I will complain that my budget was cut five percent. In any other world, I got a five percent increase. In the world of government, I got a five percent cut. That is the reason that even though you are reading that the federal budget got cut, the spending actually increased. Unfortunately, to Washington it is all a game. Wild spending of taxpayer money is not a problem to our Congress–only to the taxpayers who have to pay the bill.

The article at The Daily Signal reports:

The fourth-ranking Republican in the Senate called on colleagues Tuesday to pass her legislation to reduce wasteful government spending and rein in agencies’ spending practices.

“Government agencies are going on their annual ‘Christmas in September’ use-it-or-lose-it shopping spree,” Sen. Joni Ernst, R-Iowa, said in remarks prepared for delivery on the Senate floor.

“If not spent by midnight on Sept. 30, leftover dollars expire and can no longer be used,” Ernst said. “Rather than returning the money to taxpayers, binge-buying bureaucrats are wasting billions of taxpayer dollars needlessly.”

The federal government’s fiscal year ends Sept. 30, and Ernst’s legislation, called the End of Year Fiscal Responsibility Act, would end agencies’ annual 11th-hour sprints to spend all their budgeted money before the fiscal year runs out.

Her bill would curb how much an agency could spend in the last two months of the fiscal year to no more than what the agency usually spends each month on average during the rest of the year.

…“This bill won’t end all wasteful spending, but it will force agencies to put more thought into long-term planning and curtail the bad habit of out-of-control impulsive spending,” Ernst said.

Ernst said “spending sprees” in the past have included almost $12,000 for a commercial foosball table; $4.6 million for lobster tail and crab; $2.1 million for games, toys, and wheeled goods; over $53,000 on table china; and over $40,000 on clocks.

“With our national debt now surpassing $22 trillion, Washington should be looking for ways to save by canceling or delaying unnecessary expenses, rather than splurging on end-of-year wish lists,” Ernst said.

Another piece of legislation pushed by Iowa’s junior senator would keep her colleagues from returning home until they passed a budget.

“Through my No Budget, No Recess Act, members of Congress would be prohibited from leaving Washington if we fail to pass a budget by April 15 or approve regular spending bills by Aug. 1,” she said.

The government must stop enabling agencies to spend money that shouldn’t be spent, Ernst added:

I think Senator Ernst has some really good ideas.

The Cost Of Congressional Inaction

America has needed a reasonable approach to immigration for years. Congress has chosen not to meet this need. So what is the cost of their inaction? Today’s Washington Examiner has some of the numbers.

The Washington Examiner reports:

Federal arrests of noncitizens have jumped over 200% in the last 20 years and now account for 64% of those arrested, according to the Justice Department.

The Bureau of Justice Statistics said that federal arrests of non-Americans rose 234% from 1998-2018. For U.S. citizens, the percentage rose just 10% over those 20 years.

The newly released statistics feed the Trump administration’s narrative that an increase in immigration, especially illegal immigration, has fed a spike in crime.

The article concludes:

Also over that period, illegal immigration has surged off and on and the bureau said that immigration crimes account for the bulk of arrests. In the past, Department of Homeland Security authorities have accounted for a majority of the arrests.

“20 years, 95% of the increase in federal arrests was due to immigration crimes. From 1998 to 2018, federal immigration arrests increased 5-fold (from 20,942 to 108,667), rising more than 50,000 in one year from 2017 to 2018,” said the Justice Department.

Vaughan, the director of policy studies for the Center for Immigration Studies, said that the statistics and types of crimes disprove claims by pro-immigration advocates that illegal immigrants aren’t involved in crimes.

“Opponents of immigration enforcement are obsessed with trying to establish that illegal aliens and legal immigrants commit fewer crimes than Americans, and so, as their narrative goes, local law enforcement agencies should not cooperate with ICE and should adopt sanctuary policies. This is first of all not true, but is off-point and a dangerous conclusion. What these numbers show is that there are certain types of crime that are disproportionately associated with illegal aliens: drug trafficking, certain gang crimes, and identity theft and document fraud,” she told Secrets.

I can’t even imagine how much this is costing our federal government. It would seem that with budget deficits as far as the eye can see, Congress might be willing to look at fixing the immigration problem as one positive step toward reducing government spending, Nope–the political issue is worth more than the solution. Also, is Congress willing to take responsibility for the Americans who have been harmed by illegal immigration?

The Economy Continues To Move In A Positive Direction

Ed Morrissey posted an article at Hot Air today about the latest economic numbers. As usual when a Republican is President, the ‘experts’ were surprised that the numbers were better than expected.

The article reports:

It’s not great news for the White House, but it could have been a lot worse. The US economy’s growth slowed to 2.1% in the second quarter, down a full point from Q1. However, with economists predicting a recession right around the corner, the growth is still substantial enough to look positive:

Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2019 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1 percent.

The Bureau’s second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 2). The “second” estimate for the second quarter, based on more complete data, will be released on August 29, 2019.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, nonresidential fixed investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The deceleration in real GDP in the second quarter reflected downturns in inventory investment, exports, and nonresidential fixed investment. These downturns were partly offset by accelerations in PCE and federal government spending.

President Trump weighed in on Twitter:

The article at Hot Air concludes:

“Not bad” is a little bit of an understatement, actually. It’s pretty good, especially in the context of the global economy. That’s the bigger anchor, especially the trade disputes that at least for one quarter hit our exports hard.

The steady growth with low inflation should result in the Federal Reserve lowering interest rates in the near future.

Economic Policies Impact All Of Us

The Trump economy has been good for everyone. Taxes are lower, wages are moving up, unemployment is low, and the workforce participation rate is moving up. Wages on the lower economic scale have seen a marked increase in the past year. However, one thing that impacts government spending as well as being an indication of economic conditions  is food stamps. Yesterday Breitbart reported that the most recent USDA data revealed that 37,911,631 people received food stamps through the Supplemental Nutrition Assistance Program (SNAP) in December 2018, marking the lowest level of overall participation in the nation’s food stamp program in nearly ten years. That is good news for the people who no longer need food stamps, and it is good news for taxpayers who fund food stamps.

The article reports:

The last time overall participation in food stamps reached this level was in October 2009, when 37,672,818 people were on the government dole, according to USDA data.

…After 2013, SNAP enrollment plummeted once state legislatures passed laws requiring food stamp recipients to work, attend school, volunteer, or participate in job training for a set number of hours per week to receive benefits.

Food stamp enrollment dropped even further under President Trump’s administration partly because of the administration’s efforts to reform welfare programs like SNAP at federal and state levels of government and an improving economy spurred by Trump’s tax reform package.

The article concludes:

According to the latest USDA data, 4.2 million Americans have dropped off of the food stamp rolls during Trump’s presidency.

President Trump also signaled that he is looking to limit dependency on welfare programs like food stamps even further.

The president recently told Breitbart News in an Oval Office interview that he does not want any immigrants coming into the U.S. to be dependent on welfare programs.

“I don’t want to have anyone coming in that’s on welfare,” Trump told Breitbart News last Monday.

The asylum program was not meant to be a free lunch. There is a difference between people coming here to work and people coming here for free stuff.

A Border Will Will Save Taxpayers Billions

Betsy McCaughey posted an article at Townhall today about the cost of not having a border wall.

The article reports:

Look what it costs us when a Central American teen crosses the border illegally without an adult. Uncle Sam spends a staggering $775 per day for each child housed at a shelter near Florida’s Homestead Air Reserve Base. There they have access to medical care, school and recreation. They stay, on average, 67 days at the Homestead shelter before being released to a sponsor. Do the math. That’s almost $52,000 per child. American parents would appreciate the government spending that money on their kids. Imagine the government handing you a check for $52,000 for your teenager.

However, there are bigger costs ahead. The number of illegal border crossers just hit an 11-year high with a total of more than 76,000 during the month of February alone. U.S. and Mexican officials predict hundreds of thousands more in the coming months.

The migrants use the word “asylum” as their get-in-free card. When they say it to a border agent, they gain entry to the U.S. 80 percent of the time according to Homeland Security Secretary Kirstjen Nielsen. They are temporarily housed and eventually released with an immigration court date. But half never go on to file an asylum claim, disappearing into the U.S., said former Attorney General Jeff Sessions.

Asylum is supposed to be reserved for people facing persecution and danger in their home country whose safety depends upon their leaving that country. People who simply want better lives are asked to go through the legal process. Unfortunately our southern border is so porous that it is very easy for people to come here illegally and then simply disappear. We need a wall. It is sad that Congress is playing political games in order to avoid building one. Congress has never wanted a secure southern border–the Democrats see future voters and the Republicans see cheap labor for the corporate sponsors. No one is looking at the security of America right now except the President and very few members of Congress.

The Economy Under President Trump

I am not an economist, but I have learned over the years to listen to the people with the best track records on analysis. One of those people is Stephen Moore, who posted an article at The Wall Street Journal yesterday.

The article reports:

Liberals are tripping over themselves to explain why the economy has performed so much better under Donald Trump than it did under Barack Obama. The economy has grown by nearly 4% over the past six months, and the final number for 2018 is expected to come in at between 3% and 3.5%. The U.S. growth rate has doubled since Mr. Obama’s last year in office.

When Mr. Trump was elected, many Democratic pundits predicted an economic and stock-market meltdown. Then the economy started surging and they abruptly changed their tune, arguing that Mr. Trump was simply riding a global growth wave. That narrative was shattered when U.S. growth kept steaming ahead even as global growth—especially in China and Germany—stalled.

The people who predicted an economic crash if President Trump was elected are now saying that the tax cuts have given us a ‘sugar high’, and the market will crash when the sugar wears off. That makes about as much sense as President Obama taking credit for the move toward American energy independence.

The article continues:

The real contradiction in the “sugar high” argument is that it ignores the slow growth of the Obama years, which featured an avalanche of debt spending. Deficits as a share of GDP were 9.8% in 2009, 8.6% in 2010, 8.3% in 2011 and 6.7% in 2012. Where was the sugar high then? Instead of the expected burst in output coming out of the 2008-09 recession, borrowing more than $1 trillion a year for four years yielded the worst recovery since the Great Depression. Even excluding 2009, Mr. Obama’s deficits averaged more than 5% of GDP throughout the rest of his presidency but produced less growth than Mr. Trump has with lower deficits.

This wasn’t what Keynesians expected. Mr. Obama’s economic team predicted 4% growth every year coming out of the recession. Instead the “sugar high” from record peacetime deficits produced measly 2% growth. By 2016 GDP was running about $2 trillion below the trend line of a normal recovery.

The fastest growth rate over the past three decades was recorded in Bill Clinton’s second term, when federal government spending fell from 21.5% to 18% of GDP and deficits disappeared into surpluses. So much for the idea that deficit spending is a stimulant.

Mr. Trump’s fiscal policies have produced more growth than Mr. Obama’s because they were designed to incentivize businesses to invest, hire and produce more here at home. The Obama “stimulus,” by contrast, went for food stamps, unemployment benefits, ObamaCare subsidies, “cash for clunkers” and failed green energy handouts.

The article concludes:

Those pushing the “sugar high” fallacy also don’t realize that the Trump tax cuts aren’t going away soon. The 2017 business tax cuts can’t cause a recession in 2019 or 2020 because they don’t expire until 2025. They aren’t sugar pills.

The biggest threats to the economic boom and financial markets today are a deflationary Federal Reserve and the specter of a global trade war. Solve those problems and the American economy can keep flying high on its own power. And Mr. Trump’s critics will be proved wrong again.

When you decrease taxes and regulations on businesses, we all gain. That combination, if allowed to continue, will bring us continued economic growth.

There Are Very Few People Who Actually Want To Clean Up Washington

Yesterday The Conservative Treehouse posted an article about the uniparty that current controls Washington, D.C. The uniparty is made up of the professional republicans and the professional democrats. Their common enemy is Donald Trump.

The article reports:

The same UniParty dynamic is visible in the way the FBI/DOJ and aggregate intelligence community were weaponized against Donald Trump – with Democrats and Republicans participating in the unlawful processes.   Now, in the downstream consequence phase, we see a UniParty defense approach to block Trump from revealing what happened.

I’m not sure people fully completely understand this dynamic within “spygate”.  It was not a targeting operation by democrats; republicans were just as complicit. The ongoing goal to eliminate candidate and president Trump is *not* partisan.

Which brings me to the current state of the advisers around the executive.  Remember, there are trillions at stake here – and the downstream benefactors are both Republicans and Democrats who make up the UniParty.

Within the UniParty dynamic, in order to retain full financial benefit, the political class need to align with Wall Street priorities.  That alignment means the UniParty needs to eliminate Main Street priorities that are adverse to their interests.

The article concludes:

Border controls and immigration enforcement are adverse interests to the UniParty. Additional cross party alignment to benefit Wall Street surrounds: •budgets and massive government spending; •government controlled healthcare retention; •government controlled education (common core); •and most importantly the removal of any national economic and trade policy that would threaten the structure of the multinationals.

On all of these issues the Democrats and Republicans have identical outlooks, common interests and mirrored legislative priorities. It is not coincidental that US Chamber of Commerce President Tom Dohonue also outlined these issues as primary priorities for his massive lobbyist spending.

There are trillions of dollars at stake; and we must never discount how far the Big Club participants will go to ensure the White House counselors are shaping their advice toward those objectives.

There are no MAGA lobbying groups in Washington DC advocating for policies that benefit economic nationalism. On this objective President Donald Trump stands alone.

We don’t need a third party in Washington DC, we actually need a second one.

This is a pretty good explanation as to why the promises that Republican Congressmen running for office made were broken–as long as President Obama was in power, they were safe promises–he was not likely to sign any law they passed that differed from Democrat ideas. When President Trump was elected, the Republicans had to put up or shut up. They chose to shut up in order to maintain their big donors and people they are beholden to other than the American voters. With a  few exceptions, we haven’t had Republican leaders in Congress since Newt Gingrich, and the establishment did a pretty good job of marginalizing him. If the Republican party continues on its current path, it will no longer exist in five years.

How Cutting Taxes Creates Revenue

On November 16th, Hot Air posted an article about the impact of the Trump tax cuts on government revenue. As I am sure you remember, the Democrats called the tax cuts on individuals ‘crumbs’ and swore that the tax cuts would bankrupt the country. Well, that’s not exactly what happened.

The article reports:

Unemployment is at an historic low. Employment is at an all-time high. Wagers are growing after years of stagnation.

And now from all that increased economic activity, the federal government has just reported historic record tax revenues in October, the first month of the new fiscal year, of $252,692,000,000.

That’s more than $11.4 billion above revenue for October of last year, which was the previous record tax revenue for an October.

And it did this by collecting more than $3 billion less in personal income taxes, thanks to the tax cuts.

The new revenues were the result of increased business taxes because of increased business. Here’s how much different it was:

Corporation income tax receipts to the U.S. Treasury this year in October were a whopping $8,000,000,000. This compares to the previous October’s $3.8 billion.

Despite the record tax revenues in October, the federal government ran a deficit of $100.5 billion that month because, spending. That’s a problem that newly-elected members of Congress such as Indiana’s senator-elect Mike Braun, a businessman, said would be a major target in 2019.

The thing to remember here is that as unemployment decreases, government spending should also decrease. Unfortunately Congress did not get the message. Our problem is not the revenue–the problem is the spending. If either party were serious about curbing government spending, it would have been done by now. Obviously they are not. There are a few members of the Republican party who have been trying to put the brakes on runaway spending for years, but they are either not trying very hard or they are ineffective. At any rate, we need to elect Congressmen (regardless of party) who will pledge to bring the spending under control. It does no good to increase the revenue if the spending increases right along with it.

Who Holds Our Debt?

CNS News is reporting today:

Chinese holdings of U.S. Treasury securities are 11.5 percent below their peak level which was attained in November 2013, according to data published by the U.S. Treasury.

U.S. government debt held by entities in the People’s Republic of China peaked at $1,316,700,000,000 in November 2013, according to the Treasury. As of August 2018, according to the latest date released by the Treasury this month, China held $1,165,100,000,000 in U.S. Treasury.

That is a drop of $151,600,000,000 from the November 2013 peak.

We are still carrying way too much national debt, and that will be a more serious problem as the federal reserve raises interest rates. However, although China is holding less of our debt, it is still the the top foreign holder of U.S. Treasury securities.

The article concludes:

While China remains the top foreign owner of U.S. government debt—despite its declining holdings—the Federal Reserve still owns far more. As of the end of November, according to the Federal Reserve, it owned $2,324,589,000,000 in U.S. Treasury securities.

China’s $1,165,100,000,000 in U.S. Treasury securities was only 50.1 percent of the Fed’s holdings.

It’s time to cut government spending and get out of debt!

 

 

Representative Walter B. Jones Is Sounding The Alarm On The Deficit

Monday morning, a group of taxpayers and I were fortunate to sit down with Representative Walter B. Jones and ask him questions about his votes and his views. The interview will be aired on 107.1 WTKF The Talk Station on Sunday at 11am and 8 pm. You can stream the interview if you live outside the listening area. The interview will also be available on the Coastal Carolina Taxpayers Association website later in the week.

Representative Jones has been a warrior for responsible government spending since he has been in Congress. His voting record reflects that. He will not support a bill that increase the deficit, regardless of what is in the bill.

This is the handout he gave us about the deficit. I think all of us need to read it carefully. We need to understand the consequences of the unbridled spending that is currently the norm in Washington.

Americans need to learn to live within their means at home and at the federal and state levels. Most Americans carry some level of personal debt and do not realize that as the economy improves and the fed raises interest rates, the cost of that debt (and the cost of the national debt) will increase. It is time we all learned to spend responsibly–both at home and in government.

The Immediate Impact Of The Tax Cuts

The Daily Signal posted an article today about the immediate impact of the tax cuts recently passed by Congress.

I would like to remind people of what happened the in the 1980’s when President Reagan and Congress passed major tax cuts.

According to a Washington Post article April 10, 2015:

…the government’s budget numbers show that tax receipts expanded from $517 billion in 1980 to $909 billion in 1988 — close to a 75 percent change (25 percent after inflation),” Moore (Stephen Moore of The Heritage Foundation) wrote.

We checked the historical records of the White House budget office, and those numbers are right. But it’s devoid of important context.

First of all, revenues as a percentage of gross domestic product (GDP), which is the best way to compare across years, dropped from 19.1 percent in 1981 to a low of 16.9 percent in 1984, before rebounding slightly to 17.8 percent in 1989. One reason the deficit soared during Reagan’s term is because spending went up as a share of the economy and revenues went down.

A HeraldNet article of December 15, 2012 reminds us that President Reagan made a deal with the Democrats that included spending cuts as well as tax cuts. Conventional wisdom concerning that deal was that for every dollar in tax cuts there would be a three dollar cut in spending. Unfortunately, the Democrats never kept their end of that bargain.

The HeraldNet article reports the plan:

Here’s the actual breakdown of the three-year agreement, according to a June 1982 chart prepared by the GOP-controlled Senate Budget Committee staff, which appears in the 1989 book “The Deficit and the Public Interest,” by Joseph White and Aaron B. Wildavsky. (Note: The numbers represent reductions from anticipated outlays.)

Revenue:

$98.3 billion (26 percent)

Defense cuts: $26.4 billion (7 percent)

Nondefense cuts: $34.8 billion (9.1 percent)

Entitlement cuts: $30.8 billion (8.1 percent)

Other reductions/offsets: $7.8 billion (2 percent)

Freeze federal pay raise: $26.1 billion (6.9 percent)

Management savings: $46.6 billion (12.3 percent)

Net interest: $107.7 billion (28.4 percent)

Total non-revenue:$280.2 billion (74 percent)

Total: $378.5 billion

…At best, the spending savings that Congress could deliver, including defense cuts, amounted to a 1:1 ratio.

As Congress debates spending, we can hope that they will not repeat this mistake. Increased government revenues due to tax cuts should not lead to increased federal spending.

So far the results of the recent tax cut have been positive.

The article at The Daily Signal reports:

More businesses are announcing bonuses, higher minimum wages, and new benefits for employees after passage by Congress of Republicans’ tax reform bill. 

An email from House Speaker Paul Ryan’s press office highlights 33 businesses—including Aflac, Associated Bank, and PNC Bank—that have announced raises, bonuses, and other improvements for employees.

In moves that may defuse efforts to mandate higher minimum wages across the nation, at least nine of the 33 businesses announced they are boosting their minimum wage for thousands of workers to $15 or more an hour.

The article at The Daily Signal includes a partial list of companies offering benefits to their employees as a result of the tax cut. The article also includes a link to a complete list.

All working Americans have many reasons to celebrate the tax bill.

 

Preventing The Fleecing Of The Middle Class

The American tax code is a tribute to the effectiveness of lobbyists and big campaign donors. The loopholes in the code for people who make a lot of money are numerous. Even with loopholes in place, the rich pay a lot of taxes. As I have previously reported, The top 10 percent of income earners, those having an adjusted gross income over $138,031, pay about 70.6 percent of federal income taxes. About 1.7 million Americans, less than 1 percent of our population, pay 70.6 percent of federal income taxes. These numbers come from actual IRS data.

However, it seems that when it comes to eliminating loopholes, it’s always the middle class loopholes that go away.

Breitbart posted an article today about Congress‘ latest effort to take away a middle-class tax break. Because of a certain lack of faith in the future solvency of Social Security, many employers offer employees 401k retirement plans. Aside from allowing middle-class families to save for the future, these programs provide a place to put money so that it will not be taxed during the highest earning period of the employee. It will be taxed later at retirement when traditionally a person’s earnings are lower and generally taxed at a lower rate. Congress was evidently planning to alter the current system.

Breitbart reports:

“There will be NO change to your 401(k),” Trump tweeted. “This has always been a great and popular middle class tax break that works, and it stays!”

House Republicans were considering a plan to slash the amount of income American workers can save in tax-deferred retirement accounts. Currently, workers can put up to $18,000 a year into 401(k) accounts without paying taxes on that money until they retire and withdraw money from their savings. Proposals under discussion on Capitol Hill would set the cap lower, perhaps as low as $2,400. The effect would be a huge tax hike on middle class workers.

The plan to lower the cap on 401(k)’s would not have had an effect on long-term government deficits. Instead, it would have raised tax revenue now but lowered it in the future, since the retirement savings would already have been taxed. But taxing the savings would have had an impact on household budgets and may have discouraged workers from saving, increasing their future dependence on government benefits.

Let’s cut spending to ‘pay for’ tax cuts. Actually, if taxes are cut, economic growth should increase to a point where there is no loss of revenue. During the 1980’s, after President Reagan cut taxes, government revenue soared. Unfortunately, the Democrats who controlled Congress at the time greatly increased spending, so the government debt increased rather than decreased. Generally speaking, lowering taxes increases revenue–people are less inclined to look for tax shelters.

The Laffer Curve works:

Congress needs to keep this in mind while revising the tax code.

 

Restoring The Rule Of Law

A website called usconstitution.net explains the procedure involved in government spending:

…”All bills for raising Revenue shall originate in the House of Representatives” (Article 1, Section 7). Thus, I’ve listed the House’s “original jurisdiction” over revenue bills (laws that affect taxes) as a check. The House, however, views this clause a little differently, taking it to mean not only taxation bills but also spending bills.

The plain language of the clause would seem to contradict the House’s opinion, but the House relies on historical precedent and contemporaneous writings to support its position. In Federalist 66, for example, Alexander Hamilton writes, “The exclusive privilege of originating money bills will belong to the House of Representatives.” This phrase could easily be construed to include taxing and spending. The Supreme Court has ruled, however, that the Senate can initiate bills that create revenue, if the revenue is incidental and not directly a tax. Most recently, in US v Munoz-Flores (495 US 385 [1990]), the Court said, “Because the bill at issue here was not one for raising revenue, it could not have been passed in violation of the Origination Clause.” The case cites Twin City v Nebeker (176 US 196 [1897]), where the court said that “revenue bills are those that levy taxes, in the strict sense of the word.”

Yesterday, John Hinderaker at Power Line Blog posted an article explaining how recent actions by President Trump are restoring that constitutional principle. On Thursday, President Trump announced that he was ending payments to insurance companies that were implemented by Executive Order under ObamaCare. Since the payments were never approved by the House of Representatives, the payments were illegal and should never have begun in the first place. The Obama Administration had made those payments.

The article at Power Line states:

Liberal news outlets are offering a parade of horribles that will ensue if the federal government doesn’t continue to pay off insurance companies. In most cases, they pay little or no attention to the constitutional issue at stake. Whether such consequences will result is not so clear. Chris Jacobs points out:

For the time being, individuals likely will not see any direct effects from the payments ceasing. Carriers cannot exit Exchanges mid-year, and contracts for the 2018 plan year are already signed. (A provision in carriers’ 2017 and 2018 contracts lets them exit Exchanges if enrollees do not receive cost-sharing reductions—not if the insurers themselves do not receive reimbursement for those cost-sharing reductions. This clause, awkwardly drafted by insurers’ counsel, may provide them with little legal recourse—and further highlights their questionable assumptions and behavior surrounding the subsidies.) So maybe—just maybe—Washington can spend some time focusing on the real issue behind the Administration’s action: Upholding the Constitution.

If Congress wants to continue the subsidies, it can do so. Its appropriation, obviously, will make them constitutional. But regardless of what happens from now on, the Trump administration has acted admirably by refusing to go along with the unconstitutional regime that Barack Obama instituted.

This is not about politics–it is about following the U.S. Constitution as the law of the land.