Tag: Budget

Nothing Is Certain But Death and Taxes. The IRS Can Deliver Both

 

In Orwellian Washington, DC-speak, a “budget reconciliation” bill is winging its way through Congress. Under the post-Watergate 1974 Budget Control and Impoundment Act, “reconciliation” bills have special status, especially in the United States Senate.

More Orwellian than calling it a “reconciliation” bill is its actual title: The Inflation Reduction Act. It does no such thing. But by the time you read this, it will likely have passed the Senate and is on its way to being rubber-stamped by a House narrowly controlled by Democrats and signed by a clueless, hapless, and compliant President. The Senate vote, I predict, will be 51-50, with Kamala Harris breaking the tie. There is always a chance a Senator won’t show up but don’t count on that.

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I’m waiting for a sane Democrat (oxymoron alert) to say that it’s “darkest before dawn.” It would at least add a little levity to the negotiations that resemble more a locker room brawl that is spilling out onto the field for everyone to see. Nancy Pelosi broke her promise to vote Thursday on a bipartisan […]

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Economic Illiteracy on Parade

 

The new Democratic talking point about their $3.5 trillion budget “reconciliation” is that it “costs zero dollars.” You read that correctly. From our avatar president’s Twitter feed:

The last line tells us how Democrats define “costs zero dollars.” It “adds zero dollars to the national debt.”

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It’s not news that traditional newsrooms are shrinking across America. Some local newspapers have gone from daily to biweekly or less, if not out of business altogether. This, despite the rise of new digital news organizations in recent years. You’ve probably seen them, from a national network of local “Patch” outlets, left-leaning Axios and its […]

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Hugh Hewitt, 65, hosts the second-longest-running radio talk show in the United States. With hundreds of affiliates in nearly every state, Hugh is also a former attorney, law professor, former Reagan Administration official, and perhaps the best interviewer in all media. I especially love how Hugh interviews journalists from the mainstream media and expertly schools […]

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The Platinum Rule

 

The Golden Rule, “Whoever has the gold makes the rule,” has turned into the Platinum Rule: “He who has the government’s American Excess Platinum Card makes the rules.” Because state politicians lack the power to spend significantly in excess of annual revenues, thanks to state constitutional balanced budget provisions, they turn to Uncle Sugar. The first taste may be free, but then come the demands. This bipartisan political dynamic has pernicious effects on the constitutional balance between states and the federal government. nationalizing much of our policy, right down to local government and so right down to where you live.

But wait, we hear all the time about states in debt, what is this state constitutional limit talk?

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Who didn’t see this headline from Bloomberg Wealth coming? “Rich Americans Who Were Warned on Taxes Hunt for Ways Around Them.” I suspect most of these people not only voted for Joe Biden, but many of them have also contributed mightily to his campaign and are still happy to have done so. Preview Open

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Join Jim and Greg as they explore some of the ideas on China that ought to unite conservatives, moderates, and even some Democrats. They also shudder as Bernie Sanders is about to become chairman of the Senate Budget Committee and plans to use the reconciliation process a lot to avoid Senate filibusters. And they unload on Don Lemon for demonizing all Trump voters because some repulsive figures supported him too.

Our Debt Nightmare Got Worse

 

The rascals did it again. Last December, Congress passed a gigantic spending bill that digs the debt hole deeper, using a devious process intentionally designed to be opaque. Americans, never that fascinated with budget issues, were well into the holiday season. Media attention was focused on impeachment and the perpetual horse race.

So, non-nerds may not yet realize that late at night on December 16, Congress released a 2,313-page bill with a cool $1.4 trillion in spending and another $500 billion in tax cuts and favors for special interests.

I Got Your Shutdown Right Here!

 

I loved the Oval Office drama with Don, Chuck, and Nancy. I even enjoyed filling in imaginary speech bubbles above Mike’s head. While all the players in politics and media want to run this “government shutdown” hype train, it is mostly hype.

Congress arranges the discretionary budget, which is about one-third of annual federal spending, into twelve standard annual appropriations. Just to be clear on the current state of the 12 discretionary budget appropriations:

Five of twelve regular appropriations are already authorized. None of those will be subject to “shutdown:”

Jim Geraghty of National Review and Greg Corombos of Radio America are encouraged that six months before the midterms, DNC Vice Chairman Keith Ellison is promising that people will die if Democrats don’t win.  It’s an indication that Democrats don’t have much of an agenda to run on other than fear and opposing President Trump.  They also throw up their hands as congressional Republicans reportedly have no plans to try to pass a budget this year because it will be really hard to pass in the Senate.  They react to Sean Hannity being named as one of Michael Cohen’s clients, and while there may be no legal scandal, Hannity is definitely wrong to have not disclosed this connection.  And Jim has some theories about the man in the sketch released by Stormy Daniels.

Five Minutes to Midnight: Announcing the “Federal Government Debt Default Clock”

 

Beyond the troubling debt-ceiling standoffs we witness every few years looms a far more dire threat: a true US government default, which economists warn could lead to a collapse of confidence in the American economy, a run on the dollar, and perhaps even a global economic meltdown. How close are we to such a catastrophic federal default?

To answer this question, a group of private-sector economists and fiscal policy experts has formed a citizens’ committee, called the Default Clock Committee, to maintain an objective, fact-based Federal Government Default Clock. The Clock is designed to help the public to see and track the nearness of the danger.

For the Committee’s purposes, “default” is defined simply as a failure by the US Treasury to make a scheduled interest payment on just one direct US Government obligation such as a Treasury note or bond. “Insolvency” is defined as the point beyond which default becomes a virtual certainty.

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Posting from this week’s Josiah Bartlett Center for Public Policy newsletter. A lesson in how Republicans act when they want to expand an entitlement program but claim that it doesn’t affect general fund appropriations. The bill reauthorizing Medicaid expansion passed the state Senate on Thursday when half of the 14 Republicans joined all 10 Democrats […]

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As people should know the government is on the verge of shutting down again for a long weekend. The continuing resolution that ended the last shut down is due to expire at midnight tonight if I am not mistaken. Have no fear though Republicans and Democrats have  come together to craft a compromise that will […]

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Looking Back – Economical Cooking

 

Sometime back in April, I asked for tips on how to be a more economical cook. Someone asked if I could do a look-back post and tell you guys how it went.

Our first year practicing a budget was a huge success! We were able to replace a 16-year-old car with a 2017 Honda Civic, financing less than half of the cost. We have also put aside another couple thousand for our kids. We hope to have the car paid off sometime in June or July, which will put us at Dave Ramsey’s Baby Step Six-ish once again.

Contra Caplan on Physical Illness, Too

 

In 2006, insouciant economic imperialist Bryan Caplan published a paper outlining a consumer-choice model of mental illness designed to rehabilitate the anti-psychiatry of Thomas Szasz. Caplan claimed this model shows that mental illness should not to be understood as a “real illness” (and therefore as a matter for medical rather than moral treatment) at all, but that mental illness should be understood as a weird preference rational actors persist in despite their preference being a poor match for functioning in society.

From the perspective of Caplan’s model, mental-health treatment is a form of rent-seeking designed to paper over the interpersonal conflicts that arise when somebody won’t relinquish a preference grievously at odds with society, rent-seeking that, on the one hand, provides the “mentally ill” with official-sounding excuses for their weird preferences while, on the other hand, providing the families of the “mentally ill” with medical justification for treating sufficiently “ill” family members against their will. In October 2015, the blogger Scott Alexander, himself a psychiatrist, published “Contra Caplan on Mental Illness”, an essay pointing out why, from his perspective, it seems so strange to call mental illness merely a weird preference. Given Caplan’s framework, I would like to point out how strange it is to call physical illness not a “weird preference”, albeit a weird preference most of us take pity on out of belief that it arises from physical derangement that we don’t expect sufferers to be able to compensate for completely.

Jim Geraghty of National Review and Greg Corombos of Radio America discuss rapidly dropping rates in illegal immigration across the southern border. They also reproach Illinois state representatives – especially Republicans –  for agreeing to tax hikes instead of dealing with major fiscal problems. And they question CNN’s decision to intimidate an anonymous Reddit user over the controversial GIF President Trump re-tweeted on Sunday. To finish off the day, they criticize the History Channel for concluding what happened to Amelia Earhart based largely on one photograph.

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We’re now in day 3 of the special session of the Illinois General Assembly, called by the Governor to make it look like we’re doing something about getting a budget. The first 2 days have been, well, less than productive. Today’s Chicago Tribune editorial sums it up pretty well: “Day Two of the Illinois General […]

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Congress Should Support the Trump Administration’s Balanced Budget … and Sustain It

 

The Trump Administration released its first full budget proposal on Tuesday. It is a good proposal. First, it balances the federal budget by the end of the 10-year budget period. Second, its gets a handle on the federal government’s accelerating debt and interest costs. Finally, it is pro-growth. This final point is critical because achieving the goal of the restoration of a responsible federal fiscal policy will be a practical impossibility in the midst of a stagnant economy.

The immediate task for Congress is to adopt a budget that matches the general parameters of the Trump Administration’s proposal. This is to say, the budget Congress adopts should include the same numbers for the total outlays, the total revenues, deficits, debt, and interest costs (both on debt held by the public and debt held by other government accounts) in each fiscal year. On the other hand, it is appropriate for Congress to modify the budget proposed by the Administration in terms of the individual accounts under these general numbers. The Trump Administration cannot expect to get everything it wants. Most important for President Trump is that he limit himself to issuing veto threats against any appropriations bill and reconciliation bill that follows from such a budget to very few matters—those that are at the very top of his policy priorities.

Sustainability Is Key

Progressively Bankrupt

 

A recent story in the Wall Street Journal foretells a grim financial future for Connecticut, the wealthiest state in the union by per capita income. Its great wealth, however, does not translate into financial stability. For this coming year, the state expects a $400 million shortfall in tax collections that will only compound its looming budget deficit of some $5.1 billion, attributable to the usual suspects: service on existing debt, a lowered credit rating, surging pension obligations, runaway health care expenditures, and a declining population. In both 2011 and 2015, Connecticut Governor Dannel Malloy sought to fill the fiscal gap by engineering two tax increases on the state’s wealthiest citizens, so that today the state’s highest tax bracket is 6.99 percent. Under the state’s tax pyramid, about one-third of the state’s $7-billion budget is paid by the several thousand people earning over $1 million per year.

But reality has finally set in. Kevin Sullivan, head of Connecticut’s tax commission, has conceded that “you can’t go back to that well again.” Determined progressives may claim the path to prosperity remains blue. But sooner or later, the bubble has to burst. Even the well-heeled individuals willing to pay high taxes for superior services will cut back their business activities or flee when fleeced. Massive government wealth transfers cannot succeed if those whose wealth is to be transferred end up leaving the state altogether. Indeed, in some cases, the departure of just one billionaire can lead to a hole in the budget, as with David Tepper’s departure from New Jersey.

But if Governor Malloy has thrown in the towel on higher taxation, he has not offered any alternative program that will allow Connecticut to escape from its economic doldrums. Yet there is a path forward. His state can return to financial health if it reverses its policy course and removes many of its vaunted restrictions on labor and real estate markets. Fortunately, states have no power over interest rates and the money supply, so in order to survive, they are forced to look inward to make the necessary changes.