Tag: deficits

Jim and Greg cheer Wisconsin Sen. Ron Johnson for calling out the massive amount of deficit spending since the pandemic, how we don’t need the trillions more being pushed in Biden’s agenda, and how runaway inflation is a real danger.  He’s right, but will people listen after Republicans spent big when they had control?  They also react to a new report showing more than 33,000 people came to our southern border last month who were not from Central American countries.  And they shake their heads as NIH officials admit to Congress that the Biden administration never consulted with them before shutting down a State Department probe into the origins of the COVID pandemic.

Steven Malanga and Brian Anderson discuss how the economic shock resulting from the coronavirus—the closing of large sections of the American economy, the plunge of stock markets—is likely to undermine state and local budgets around the country.

Even as states are searching for extra funds to help battle Covid-19, the loss of tax revenue during the crisis will be devastating. “States that rely on meetings, conventions, and tourism, or that derive substantial economic growth from energy production, or that depend on big gains in the financial markets from wealthy individuals, will be among the biggest losers unless the economy turns around fast,” Malanga writes.

Brian Riedl and Shai Akabas discuss the U.S. federal budget, budget negotiations, and why Congress hasn’t addressed the rising national debt—even as it gets worse.

The case for a “grand deal” on the budget has never been more evident: within a decade, annual budget deficits are projected to exceed $2 trillion. Entitlement programs are projected to drive trillions in new government debt over the next few decades. Yet increasing partisanship and political polarization—both in Washington and among voters—have significantly diminished the likelihood of bipartisan cooperation to avoid a fiscal calamity.

Jim Geraghty of National Review and Greg Corombos tackle the latest accusations of Christine Blasey Ford against Brett Kavanaugh, leaving Republicans with the unpleasant choice of ditching a Supreme Court nominee over an eleventh hour allegation missing many specifics or confirming a nominee who many Americans now believe to be a sex offender just one month before the midterms.  They also get a kick out Alexandria Ocasio-Cortez flailing and failing to explain how she would pay for $40 trillion in new government programs over ten years.  And they sigh as evidence mounts that North Korean dictator Kim Jong-Un hasn’t stopped his nuclear or missile programs but just isn’t boasting about it anymore.

Jim Geraghty of National Review and Greg Corombos of Radio America are amazed that more than 90 percent of House Democrats either opposed a resolution supporting Immigration and Customs Enforcement or refused to vote on it at all.  They also grumble as deficit projections once again head north of a trillion dollars and the number of food stamp recipients remains stubbornly high in a strong economy.  And they denounce Vladimir Putin’s proposal to allow U.S. investigators to interview the 12 Russians indicted for meddling in the 2016 elections in exchange for allowing the Russians to interview a former U.S. ambassador.

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[This is a two-part series. In part two I’ll explore whether Trump has invented a new fiscal strategy for the GOP] The Cheney doctrine, first articulated by Dick Cheney in the early 2000s, is that fiscal deficits do not matter. As the 2000s wore on, the doctrine was expanded to include trade deficits. This expanded […]

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David French of National Review and Greg Corombos of Radio America pause to cheer the Falcon Heavy rocket launch by Space X this week and David hopes it sparks more aspirational innovation that our nation so sorely needs.  They also grimace as Republican majorities are preparing to jack up spending significantly over the next couple of years, even though some positive elements are included in the budget bill.  And they sigh as Nancy Pelosi uses part of her marathon floor speech on immigration policy to say her young grandson blew out his birthday candles and wished he could look like his friend from Guatemala.

Jim Geraghty of National Review and Greg Corombos of Radio America see decent prospects for Republicans governors in the 2018 midterms, as they are glad to see the ten most popular governors in the U.S. are all Republicans and that many of the GOP’s least popular governors are not running for re-election.  They also groan as Treasury Department officials project nearly trillion dollar deficits returning this fiscal year.  And they get dizzy trying to follow all the accusations and counter-attacks related to the House Intelligence Committee FISA memo, concluding that the more information that gets released the better – from all sides – so long as sources and methods are not compromised.

Richard Epstein grades the Trump Administration’s proposal for tax reform, explains the first principles of effective tax systems, and challenges the notion that progressivity is essential to an equitable tax code.

Jim Geraghty of Natonal Review and Greg Corombos of Radio America sigh as liberal late night comedians demand new gun control legislation while getting their facts wildly wrong.  They also react to reports that President Trump does not appear likely to embrace gun control efforts in the wake of the horrific attack in Las Vegas that killed dozens and wounded hundreds.  And they shake their heads as White House Budget Director Mick Mulvaney  – a deficit hawk while in Congress – says he is embracing deficits as part of the emerging tax reform legislation.

A Simple Explanation Why the Trump Theory on Trade Deficits Is Wrong

 

This explainer from Mike Feroli at JPMorgan does a pretty good job showing why a focus on trade deficits as a measure of US economic vitality is wrongheaded (bold is by me):

When each worker in the economy does a narrow task efficiently, the overall economy is more productive than if each of us tried to grow our own food, sew our own clothes, and produce our own economic research. The basic case for free trade among nations rests on a similar argument—when each country can specialize in the activities at which it is most efficient, the overall size of the global pie will be larger. If trade were to be substantially restricted, we would expect to see lower levels of productivity and GDP in the long run, as workers and countries are forced to make things they are not especially good at making.

Democrats Push $1 Trillion Infrastructure Plan As Deficits Are Rising

 

ABC News:

Senate Democrats on Tuesday offered a plan to spend $1 trillion on transportation and other infrastructure projects over 10 years, challenging President Donald Trump to join them on an issue where they hope to find common ground. Democrats estimate their plan would create 15 million jobs. The plan includes $210 billion to repair aging roads and bridges and another $200 billion for a “vital infrastructure fund” to pay for a variety of transportation projects of national significance.

Should We Worry about America’s National Debt?

 

Of course, Ronald Reagan said the debt is big enough to take care of itself. Still, that headline question is the exact question I asked economist Ken Rogoff last November. From our exchange:

Rogoff: Well, obviously one question is at what horizon are we borrowing? So if you’re borrowing at 30 years, you can certainly carry – it’s a lot less risky than if you’re doing all quantitative easing and you’re borrowing at overnight interest rates when those can change on you very suddenly.

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I just read an article by a Keynesian economist arguing that voters and politicians shouldn’t be afraid of running deficits if it means avoiding recessions, and it got me pondering. I said to myself, “self, wouldn’t it be just as easy to say that voters and politicians shouldn’t be afraid of (short-term) recessions if it […]

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President Obama has a Brian Williams Problem on Deficits

 

CBO1-580_0Despite the recent illogical musings of some liberal economists, including Paul Krugman, deficits and increasing debt are bad things. Not only do they jack up the borrowing costs and necessary amounts of taxation and/or inflation needed to cover the difference, deficits also drain investment capital that could be put to efficient use (and sustainably grow our economy) out of the market and into the hands of notoriously wasteful government bureaucrats.

Deficits are bad. There is no argument. Prior deficit spending by other presidents doesn’t make even bigger deficit spending OK. I wasn’t old enough to vote for George W. Bush either time and, as much as I admire many of the attributes of Ronald Reagan, The Gipper made fiscal mistakes too. I agreed with candidate Obama: trillions of dollars in national debt is unpatriotic. To some degree the president still seems to understand that deficits are a bad thing, even if just politically. At the Democrats’ Winter Meeting this past week, the president (again) took credit for falling deficits, claiming that deficits only seem to go down when Democrats are president. He claimed that our deficits are falling at the fastest rate in 60 years. This is technically true, but that’s the purpose of doublespeak isn’t it?

President Obama needs to learn a lesson from the Brian Williams suspension and stop taking credit for things in which he played absolutely no part. Deficits have fallen, but President Obama has done almost nothing to account for this, except for hiking taxes on people’s health care under Obamacare.