Tag: Budget

After a brief hiatus, the Daily Standard Podcast has returned with a new host: Charlie Sykes. A longtime journalist, author, commentator, and radio host, Charlie brings his decades of experience and insight to our daily podcast.

Today, he speaks with editor-in-chief Stephen F. Hayes on President Trump’s new budget and the end of fiscal conservatism, the proposed military parade, and whether White House Chief of Staff John Kelly will survive the recent scandals plaguing the White House.

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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.

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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.

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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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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.

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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.

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Render to Caesar the Things That Are Caesar’s…

 

The people who sued Little Sisters of the Poor are now angry that Christians aren’t practicing their faith.

The White House released a proposed budget that would cut funding for many agencies and eliminate a few programs entirely. For those who want government only to grow, this is intolerable. So instead of focusing on our $20 trillion debt or the ineffectiveness of our leviathan government, the left yanked the heartstrings.

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Jim Geraghty of National Review and Greg Corombos of Radio America are pleased to see conservative priorities in Pres. Trump’s budget, even though they concede the final appropriations will look nothing like this. They also shake their heads as John McCain accuses anyone opposing NATO membership for Montenegro of doing Vladimir Putin’s bidding. And they react to a tweet from the McDonald’s account that slams Pres. Trump.

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Pathway to a Balanced Budget Begins with a Fixed Debt Limit that Provides Flexibility

 

According to the Bipartisan Budget Act of 2015 (Public Law 114-74), the current suspension of the debt ceiling expires at the end of the day Wednesday, March 15. Following this date, the US Treasury can avoid defaulting on the federal debt only by using “extraordinary measures.” Indeed, Treasury Secretary Mnuchin sent a letter to Speaker Ryan on March 8, stating that the Treasury will start using these measures on March 16. He also asked Congress address the matter in a way that avoids jeopardizing the full faith and credit of the US government. These measures (i.e., accounting steps) will most likely allow the federal government to make it to early fall before it runs up against a hard ceiling on the debt.

Suspension or No Suspension?

The first question facing Congress on the debt ceiling is whether to set a new debt ceiling or simply to extend the current suspension. What should Congress do? Without hesitation, I recommend that Congress set a new ceiling that aligns with the state of the art balance budget amendment that is being proposed by the States.

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Welcome to the Harvard Lunch Club Political Podcast for March 14, 2017, it’s the Nobody Will Ever Have Healthcare edition of the show.

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Jim Geraghty of National Review and Greg Corombos of Radio America cheer Donald Trump’s selection of Rep. Mick Mulvaney to be director of the Office of Management and Budget. They also slam Pres. Obama for dismissing the Electoral College as a vestige of an earlier vision of America. And we react to Michelle Obama comparing the American people to toddlers.

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Illinois on the Fiscal Brink

 

shutterstock_203635339Illinois — a state that has long embraced progressive fiscal policies — has moved one step closer to the financial abyss. Last week, Moody’s Investors Service issued the jarring announcement that it was downgrading Illinois’s general obligations bonds to Baa2 from Baa1, which is just two levels above junk bond status. The next day, Standard & Poor’s followed suit by lowering its rating to BBB+, or three levels above junk bond status. In one important sense, this is really not news at all, since Illinois had 13 bond downgrades under its previous governor, Patrick Quinn, even though it passed a temporary tax increase that collected an additional $31 billion in revenues between 2011 and 2015, 90 percent of which was funneled into pension payments for public employees.

The reason Illinois’s credit ratings have declined is that the state has been unable to live within its means. Even with its tax increases, Illinois has not had a balanced budget since 2001, though one is required under its Constitution. The latest credit downgrade stemmed from the inability of key players in the state to agree on any budget at all for the coming year. It is therefore no surprise that Moody’s observes: “The rating downgrade reflects continuing budget imbalance due to political gridlock that for more than a year has kept Illinois from addressing revenue lost due to income tax cuts that took effect in January 2015.” This remark reflects the bias of rating agencies to worry more about the condition of government balance sheets than the overall health of the state economy. Reduced expenditures are another, superior way to bring a budget into balance, which is necessary, for — as Moody’s ruefully notes — Illinois is running a structural budget gap of about 15 percent of its general fund expenditures.

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