Tag Archives: Government spending

The Impact of the National Debt

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Author: R. Alan Harrop, Ph.D

We, the American taxpayers, need to be aware of the soaring national debt; primarily because we will ultimately suffer the consequences of this out-of-control spending. Let’s take a look at the facts. I strongly suggest that you sit down as you read this.

Much of the following data was obtained from the website www.us.debtclock.org as of the end of August 2024. The total debt is currently 35.2 trillion dollars. This debt, by far the highest of any country in history, is increasing at the rate of 1 trillion dollars every three months. This amounts to $268,000 per taxpayer. The debt to the Gross Domestic Product (GDP) ratio is 122% as compared to 35% in 1980. This is comparable to an individual having a debt that is 122% higher than their total assets and income. The interest alone on the national debt now amounts to 918 billion dollars per year, which is more than the entire military defense budget. This is clearly unsustainable.

The impact of federal spending on inflation is equally alarming. Compared to the year 2000, the price of essentials is truly shocking. For example, the average price of a new home is now $406,000 as compared to $166,000 in the year 2000. New cars now average $49,000 as compared to $22,000; annual healthcare now averages $15,000 as compared to $5,000; college tuition now averages $27,000 per year compared $11,000. Contrast these dramatic increases to the increase in median annual income that is now $39,000 compared to $32,000 in the year 2000. Clearly, the standard of living of the average American, especially the young, has diminished significantly, especially when you add the $268,000 we all owe on the national debt!

As we face the upcoming election, we need to evaluate the impact the Democrat and Republican platforms will have on the national debt and inflation. The Democrat platform, as far as we can tell, includes price controls, $25,000 gifts to first time home buyers, increases in corporate tax rates, allowing the Trump tax cuts to expire, a tax on unrealized capital gains, transferring student loan debt to others, and a wealth tax. History shows that none of these proposals will reduce the national debt or inflation–they will only increase government spending and reduce the incentive of the average person or corporation to invest.  Couple this with the money being spent to support illegal aliens, and the problem only worsens. For example, price controls lead to shortages in supplies and result in price increases. The Republican platform includes efforts to reduce the cost of energy by eliminating costly green energy programs and expanding the use of fossil fuels and nuclear power, reducing excessive government regulations, incentives to increase investments, and returning manufacturing to this country. Decreasing the cost of energy is essential to reducing inflation. The national debt crisis can only be solved by reducing the size of the federal government (e.g. abolishing the federal Department of Education and cutting the budgets of all federal agencies) and growing the economy by encouraging investment.

We have a very clear choice in the upcoming election. The fate of the economic survival of this country is on the ballot. Time to face reality.

Recognizing Marxism Part II

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Author:  R. Alan Harrop, Ph.D

In a previous article, I outlined seven indicators that a politician or government is advocating destructive Marxist principles or actions. Here are a few more that we should be aware of if we want to protect our freedoms as true American patriots.

First: Government giveaways. Marxist governments seduce citizens for support by providing things, seemingly for free. Examples:  free healthcare for all, canceling student debt, providing guaranteed income for all, and recently, free down payment money for first time home buyers. Of course, the government does not create wealth but merely takes from a person who earned it, and gives it to another who did not earn it. This is actually wealth transfer which penalizes the hard-working person.

Second:  Inflation. Most, if not all inflation, is caused by excessive government spending that exceeds revenues. The government does this by printing money that is not backed by actual economic growth.  Printing money is the Marxist way of buying votes while at the same time devaluing the buying power of the currency. This essentially amounts to a tax that makes citizens poorer. The Harris campaign’s recent announcement that inflation will be reduced by going after corporations who are “gouging the public” is misdirected and typical of trying to blame private companies for government caused inflation. Price controls always lead to shortages and increased inflation.

Third:  Suppressing dissent. Controlling the press, limiting free speech, and prosecuting opposition occurs in all Marxist countries such as China, North Korea, Russia, Cuba, and Venezuela. Alarmingly, this is now occurring in America. Blocking people from social media platforms, falsely prosecuting January 6th demonstrators as “insurrectionists” (while allowing actual rioters after the George Floyd incident to go free) are examples of what Marist governments do. The most glaring example, of course, is the Biden/Harris administration’s persecution of Donald Trump for bogus crimes. This has never happened before in the history of this country and represents a serious change which should alarm us all.

Fourth:  Intentionally distorting the truth. Truth is not a Marxist value. Marxists will say anything in order to hide the truth from the people. This includes mislabeling their destructive actions to hide the real impact. For example, the so-called Inflation Reduction Act did nothing but increase inflation. The Biden/Harris administration spent billions of dollars on green energy and other programs that required borrowing more money, that the government did not have. Another example, is the tragic effort to encourage the surgical mutilation of children. They call it “Gender Affirming Care” when it is the exact opposite. Instead of encouraging children to accept and be content with their birth gender, they advocate gender hormone blockers and genital surgery in an effort to change the child’s true gender. Some states like California and Wisconsin (where VP candidate Tim Walz is governor) threaten to take a child away from the parents if they refuse to agree to hormone blockers or surgery.

Fifth:  Open borders. Marxism always attempts to eradicate the national traditions of any country they control. One way of doing this is to flood the country with immigrants who do not share the principles, values, and traditions of that country, thereby allowing the government to define the culture. Demeaning a country by focusing on flaws from their past diminishes patriotism and love of country and ignores the positive accomplishments.  This is especially destructive to the youth.

The issue facing America in 2024 is whether there are enough clear-thinking patriots who recognize the destructive path we are on and are willing to do what is necessary to reverse course.  The upcoming election will answer that question, once and for all.

Those Who Fail To Learn The Lessons Of History Are Doomed To Repeat Them

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Presidential candidate Kamala Harris has announced her economic plan to stem inflation. She has stated that her goal is to make life in America more affordable for everyone. Her intentions may be noble, but her knowledge of economics and human nature leaves a lot to be desired.

On Friday, Fox News reported:

A liberal economic columnist criticized Vice President Kamala Harris’ proposal to control prices on food and groceries as “totally unworkable” and compared it to failed efforts by communist governments.

“It‘s not going to be markets, it‘s not going to be supply and demand that’s determining how much your grocery store charges you for milk or for eggs, it‘s going to be some bureaucrat in D.C., which seems like totally unworkable,” Catherine Rampell said on CNN on Friday.

Rampell, a columnist for the Washington Post and a CNN economics and political commentator, argued the plan was “bad” for various reasons, from practicality to effectiveness.

“Well, first of all, nobody can explain what price gouging means,” she said on CNN, saying the idea of “excessive” prices or profit margins is subjective and thus “very hard to pin down what this would actually mean.”

The article also notes:

“We’ve seen this kind of thing tried in lots of other countries before; Venezuela, Argentina, the Soviet Union, et cetera. It leads to shortages, it leads to black markets, you know, plenty of uncertainty,” she said.

“And beyond that, the specific way this bill is written might actually increase prices because of some of the other language in it, things like requiring companies — public companies to disclose in their quarterly reports, their quarterly earnings reports, how they’re setting prices, which is a great way to help them collude, which normally we don’t want them to do,” she explained.

If you want to bring down inflation, the first thing you need to do is cut government spending and regulation. After that is done, open up America’s energy resources and loose the free market on all areas of our economy. The return to the free market will make economic success available to anyone who is willing to work for it. That should be everyone’s goal.

Milton Friedman is credited with saying, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” Kamala Harris needs to consider that quote when planning her economic program.

Hiding The Increased Cost Of Medicare Premiums Caused By The Passage Of The Inflation Reduction Act

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The Inflation Reduction Act did a lot of things. One of the things it did not do was reduce inflation. We are now finding out that it will cause a significant increase in the cost of Medicare Insurance.

On Wednesday, Fox News posted an article about the use of taxpayer money to delay the increases until after the election.

The article explains:

In a move critics say is designed to shield the Biden-Harris administration from election fallout, the administration has leveraged taxpayer funds to mask upcoming increases in Medicare premiums.

Under the Inflation Reduction Act (IRA), which was intended to cap out-of-pocket drug costs for Medicare beneficiaries, insurers are poised to significantly hike monthly premiums, with average bids for Part D plans expected to triple by 2025.

In response to potential voter backlash, the Centers for Medicare and Medicaid Services (CMS) rolled out a three-year “demonstration project” to subsidize these premiums, aiming to keep them artificially low. However, despite the appearance of relief, some critics are saying that taxpayers will fund a dramatic increase in subsidies — from $30 per recipient per month in 2024 to $142.70 in 2025 — raising concerns about the long-term impact on government spending and debt. 

The article notes:

Research published by Fidelity, an investment research group, shows that a 65-year-old retiring today can expect to spend $165,000 on health care in retirement, a 5% increase from last year and more than double the estimate from 2002.

Yet, there appears to be a disconnect for many Americans between the actual projected cost of health care in retirement and how much they expect to spend on those expenses. The average American thinks they will spend about $75,000 on health care and other medical expenses, less than half of Fidelity’s calculation, according to the research.

The estimate assumes that an individual is enrolled in Medicare – including Part A and Part B, which cover most hospital care and doctor’s visits – and Part D, which covers prescription drugs. Other expenses such as Medicare premiums, over-the-counter medications, dental and vision care and other costs typically not covered by Medicare are “left to retirees to manage on their own,” the report said.

As of April 2024, about 67.3 million Americans were enrolled in Medicare, according to the Centers for Medicare and Medicaid Services. Of those, about half were enrolled in a Medicare Advantage plan, while about 80% were covered by Medicare Part D.

“They just want to get through the election,” Grogan (former President Trump advisor Joe Grogan) said. “They’re hoping after the election they can face it, but its gonna need to be dealt with in the next 12–18 months. They did not believe it would be this bad and its only gonna get worse.” 

Medicine was much more efficient and much cheaper before the government got involved. It is time to let medicine become a free-market part of the economy. More competition will provide more care at a more reasonable price for everyone.

 

 

Targeting Taxpayers

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Author: R. Alan Harrop, Ph.D

The Coastal Carolina Taxpayers Association is committed to ensuring that citizens receive accurate information about policies that impact taxes. The election in November will have a major impact on federal taxes. It is important to note that 47% of earners paid no federal income tax in 2022 and the top 1% of earners paid a whopping 76% of federal taxes collected. This means that there are a substantial number of people who have no stake in how much federal taxes increase. Also, be aware that the Left’s constant refrain that the top earners do not pay their fair share is a lie.

What can we as taxpayers expect in the future? Let’s take a look. First, if a leftist Democrat, like Kamala Harris, is elected we can expect that Trump’s tax cuts from 2017 will be allowed to expire in 2025 increasing taxes substantially; particularly on middle class wage earners. Second, we can expect an increase in spending on “green new deal” programs, which are not only a hoax, but will destroy this country. Subsidies and mandates for wind, solar, and electric vehicles will increase your tax debt. The war on fossil fuels is the major cause of the increased price of energy and inflation. Third, runaway government spending has increased the federal deficit to over $35 trillion, which amounts to $104,000 for every man, woman and child in this country. This will only get worse, and ultimately must be paid by you the taxpayer. Fourth, the so-called student loan forgiveness scam (which is really a transfer of the debt to you the taxpayer) will be pursued in order to buy votes from those who actually benefited from the loans. Fifth, the open border policy is costing taxpayers billions of dollars in direct payments, housing subsidies, food stamps and free healthcare. Kamala Harris has previously advocated free healthcare and Medicare/Medicaid for all, including illegal immigrants. Since hospitals are not allowed to turn people away, you are actually paying this bill now, and it will get worse.

Of course the biggest tax of all is rampant inflation, which has increased the cost of living for the average American over 23% since Biden/Harris took office. Even though the inflation rate has diminished somewhat, prices continue to increase and will never return to their previous levels. In the meantime, mortgage rates, housing prices and rising rents are an increasing burden on the American people, especially the young. The American Dream is being shattered by excessive government spending.

By contrast, a Republican administration is likely to expand energy production, which will not only ease inflation, but provide revenue from the sale of oil and gas to other countries. Trump’s “Drill, baby, drill” plan needs to be implemented. Tax rate cuts to stimulate economic growth and productivity can be expected and are the only positive way of attacking the federal debt. Shrinking the federal government such as eliminating the federal Department of Education and cutting agency budgets are planned. President Trump’s commitment to closing the border will not only reduce taxes but ensure greater security and protect American jobs. Last, but not least is Trump’s commitment to revoke China’s most favored nation status which would help level the playing field and return manufacturing to this country, as well as provide revenue from equal tariffs as appropriate.

Regardless of other issues, and there are many, the impact on taxpayers of this coming election could not be more profound. As taxpayers this should be of the highest concern.

The Impact Of Bidenomics

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On June 18th, Just the News posted an article about the impact of Bidenomics. Essentially Bidenomics is excessive spending creating inflation and rising federal deficits combined with interest rates rising in an attempt to curb inflation without dealing with the spending.

The article reports:

More companies are declaring bankruptcy and shutting down operations, citing inflation and high costs. Inflation and the economy remains a top issue among all voters, according to a recent The Center Square Voters’ Voice Poll.

Retailers are closing nearly 3,200 stores this year, according to a recent analysis from CoreSight Research. The closures are a 24% increase from 2023.

U.S. drug stores and pharmacy closures led to 8 million square feet of shuttered retail space this year, the research company said. It also notes that retailers are losing inventory and customers due to retail theft. “Retail shrink” is closely connected to “organized retail crime,” it notes.

Out of the 3,200 being closed, the majority are being closed by roughly 30 retailers, with Family Dollar closing the most of over 600, according to the data, CBS News reported.

The article concludes:

One key indicator of economic health is consumer spending, and while it hasn’t yet slowed, warning signs are there because it’s largely being financed by debt, economists have explained. And consumers are also struggling to pay it off, they add. Earlier this year, economist David Rosenberg of Rosenberg Research warned that as total credit card debt reached a new all-time high of $1.13 trillion, credit card and auto loan delinquencies were also up. “As far as consumer credit is concerned, the default cycle isn’t merely looming, it’s arrived,” he wrote in an economic report.

According to a recent The Center Square Voters’ Voice Poll, conducted in conjunction with Noble Predictive Insights, inflation/price increases (45%) and the economy/jobs (24%) are top concerns among voters.

“Inflation is a high-ranking issue among Democrats and Republicans and True Independents,” David Byler of Noble Predictive Insights told The Center Square. “Every political group thinks this matters.”

The rise in retail theft is also a factor in store closings. How much does it cost to put candy behind plastic so that it cannot be stolen? How many extra man hours are needed to help customers access products that are now locked away? These are also things that lead to higher prices and continuing inflation. Curtailing government spending and prosecuting retail theft would be a good first step in lowering prices for consumers.

The Choice Is Between Bad And Awful

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On Wednesday, Armstrong Economics posted an article about inflation and recession.

The article reports:

Federal Reserve Bank of Minneapolis President Neel Kashkari has advised against anticipating near-term rate cuts. While speaking to the Financial Times, the Fed president stated that people would simply prefer a recession to continued inflation.

“I have learned that the American people—and maybe people in Europe equally—really hate high inflation. I mean, really viscerally hate high inflation,” he told the Financial Times’ The Economics Show podcast. Kashkari is speaking as if we are not already in a recession. It is not difficult to understand the “visceral” hatred people around the world feel toward rising prices. The effects of inflation are felt with every purchase, causing the average person to adjust their entire lifestyle.

The article concludes:

Real prices have far surpassed anything they calculate in CPI. Everyone understands that prices have risen far more than the arbitrary number the Fed provides us. Taxes are continually increasing for everyone in every tax bracket. The government not only adds to inflationary issues with their spending but then expects their citizens to foot a portion of the bill with taxes, which will simply never be enough.

Then we have Washington telling the masses to blame corporations for price gouging while raising their taxes and making it increasingly difficult to conduct business and maintain a large workforce. It is not that the people would prefer to be in a recession, the real issue is that countless people are entering survival mode. People everywhere want to hold onto whatever they may have out of fear for the future, but they are unable even to hoard as real prices now demand they hand over whatever they have to maintain their lives.

In a recession, consumer spending drops, and people lose their jobs. A service economy such as the one America currently has is more vulnerable to recession than a manufacturing economy. A recession creates hardship for working families.Inflation impacts both working families and retirees. Either one is a bad deal. The most practical way to deal with inflation in America would be to cut government spending and to resume domestic oil production. Both of those things would help revive a miserable economy.

What Impact Does This Have On America’s Future?

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On Monday, Breitbart reported that according to the Center for Immigration Studies (CIS), only 46 percent of the migrants who had arrived in America in 2022 or later were employed at the beginning of 2024.

The article reports:

“Immigration clearly adds workers to the country, but it just as clearly adds non-workers who need to be supported by the labor of others,” Steven Camarota and Karen Zeigler, researchers with the CIS, wrote.

This was the case in the past, it is true today, and it will surely be the case for immigrants who arrive in the future. Those who simply see immigration as a source of labor need to understand it is also a source of school children, retirees, and many other non-workers.

The data from the CIS report undermines arguments that supporters of illegal immigration have used to try to point out that migrant workers help the economy by working hard.

The article also includes a chart showing the rapid increase in the foreign-born population in America:

The article also notes:

The report also found that, since Biden took office in January 2021, the migrant population in the U.S. increased by roughly 6.6 million over the course of 39 months.

As of March 2024, there were 51.6 million foreign-born migrants, 5.1 million more than in 2022. This number made up 15.6 percent of the population in the U.S.

…Another report from the CIS in February found that Biden’s job growth centered around hiring millions of foreign-born immigrants while the number of American citizens with jobs decreased from pre-COVID-19 levels.

Controlled immigration is a good thing. However, when immigrants make up nearly one quarter of the population, assimilation is nearly impossible. What occurs is enclaves of ethnic groups that do not identify as Americans and are not necessarily inclined to work for the good of the country. In a recent election, a member of Congress declared that they would represent the interests of Somalia. The problem with that is that they are not supposed to represent the interests of Somalia–they are supposed to represent the interests of their constituents in America. The immigration policies (or lack thereof)  of the Biden administration are going to come back to bite us. It is only a matter of time.

 

It’s The Spending, Stupid!

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On Tuesday, The Daily Caller posted an article about federal spending. If the average American family spent money the way the government does, they would be bankrupt within six months.

The article reports:

The U.S.’ national deficit surged in February as income declined and expenses rose, resulting in the federal government spending more than double what it collected in the month, according to a release from the Treasury Department.

The federal government collected $271 billion in February, mostly through taxes and social insurance and retirement payments, but spent $567 billion, a difference of $296 billion that was funded by an increase in the national debt, according to the Treasury Department. The gain in February brings the total national debt increase in fiscal year 2024 to $828 billion, which began in October 2023.

Remember–we have to pay interest on that debt.

The article continues:

At the end of February, the national debt totaled $34.71 trillion, with $27.38 trillion of that being held by the public and $7.09 trillion being held by other government organizations, according to the Treasury. The federal government recently passed the $34 trillion debt mark right before the start of 2023.

The government has already paid $433 billion in gross interest expenses in fiscal year 2024, far higher than the $306 billion that had been paid at this point in the last fiscal year, according to the Treasury. For the current fiscal year, the Treasury anticipates that it will pay over $1 trillion in just interest costs.

The article concludes:

A Biden administration official claimed that 90% of the non-emergency increase in the debt-to-GDP ratio since 2001 has been the result of tax cuts, the official told the Daily Caller News Foundation in response to a request to comment. The official argued that Biden’s recently proposed budget would reduce the national deficit by $3 trillion through taxing wealthy individuals and big corporations.

If President Joe Biden’s budget proposal is enacted, it is estimated that the debt would increase to $42.5 trillion by the end of fiscal year 2028, around the time his presumptive second term would end.

Can we please have a President who understand the Laffer Curve and economics!

We Have A Spending Problem

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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

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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?

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On December 27th, Headline USA reported the following:

(Luis Cornelio, Headline 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

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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…

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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

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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

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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

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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

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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?

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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

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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

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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

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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

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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

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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

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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.