Category Archives: Economist Dan Mitchell

Dan Mitchell: “The bottom line is that budget deficits don’t necessarily lead to inflation. But if a government is untrustworthy, then it will have trouble issuing debt to private investors”

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Milton Friedman – Deficits and Government Spending

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The Federal Reserve and “Fiscal Dominance”

Appearing on Vance Ginn’s Let People Prosper, I discussed spending caps, entitlement reform, past fiscal victories, and potential future defeats.

For today, I want to highlight what I said about monetary policy.

The above segment is less than three minutes, and I tried to make two points.

First, as I’ve previously explained, the Federal Reserve goofed by dramatically expanding its balance sheet (i.e., buying Treasury bonds and thus creating new money) in 2020 and 2021. That’s what produced the big uptick in consumer prices last year.

And it’s now why the Fed is raising interest rates. Part of the boom-bust cycle that you get with bad monetary policy.

Second, I speculate on why we got bad monetary policy.

I’ve always assumed that the Fed goofs because it wants to stimulate the economy (based on Keynesian monetary theory).

But I’m increasingly open to the idea that the Fed may be engaging in bad monetary policy in order to prop up bad fiscal policy.

To be more specific, what if the central bank is buying government bonds because of concerns that there otherwise won’t be enough buyers (which is the main reason why there’s bad monetary policy in places such as Argentina and Venezuela).

In the academic literature, this is part of the discussion about “fiscal dominance.” As shown in this visual, fiscal dominance exists when central banks decide (or are forced) to create money to finance government spending.

The visual is from a report by Eric Leeper for the Mercatus Center. Here’s some of what he wrote.

…a critical implication of fiscal dominance: it is a threat to central bank success. In each example, the central bank was free to choose not to react to the fiscal disturbance—central banks are operationally independent of fiscal policy. But that choice comes at the cost of not pursuing a central bank legislated mandate: financial stability or inflation control. Central banks are not economically independent of fiscal policy, a fact that makes fiscal dominance a recurring threat to the mission of central banks and to macroeconomic outcomes. …why does fiscal dominance strike fear in the hearts of economists and financial markets? Perhaps it does so because we can all point to extreme examples where fiscal policy runs the show and monetary policy is subjugated to fiscal needs. Outcomes are not pleasant. Germany’s hyperinflation in the early 1920s may leap to mind first. …The point of creating independent central banks tasked with controlling inflation…was to take money creation out of the hands of elected officials who may be tempted to use it for political gain instead of social wellbeing.

A working paper from the St. Louis Federal Reserve Bank, authored by Fernando Martin, also discusses fiscal dominance.

In recent decades, central banks around the world have gained independence from fiscal and political institutions. The proposition is that a disciplined monetary policy can put an effective brake on the excesses of political expediency.This is frequently achieved by endowing central banks with clear and simple goals (e.g., an inflation mandate or target), as well as sufficient control over specific policy instruments… Despite these institutional advances, the resolve of central banks is chronically put to the test. … the possibility of fiscal dominance arises only when the fiscal authority sets the debt level.

The bottom line is that budget deficits don’t necessarily lead to inflation. But if a government is untrustworthy, then it will have trouble issuing debt to private investors.

And that’s when politicians will have incentives to use the central bank as a printing press.

P.S. Pay attention to Italy. The European Central Bank has been subsidizing its debt. That bad policy supposedly is coming to an end and things could get interesting.

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A.F. Branco for Oct 21, 2021

US Debt by President: By Dollar and Percentage

Who increased the U.S. debt the most? That depends on how you measure it.

US President Barack Obama (L) former President Bill Clinton (C) and former President George W. Bush (R) walk to the Rose Garden
PHOTO:MARK WILSON/STAFF/GETTY IMAGES

What’s the best way to determine how much each president has contributed to our nation’s $31 trillion in U.S. debt? The most popular ways to measure involve comparing the debt level from when a president enters office to the debt level when they leave. It’s also good to compare the debt as a percentage of economic output, which takes into account the size of the economy at the time the administration accumulated the debt.1

Drawback of Measuring Debt by President

Neither of the techniques mentioned above is a very accurate way to measure each president’s impact on the national debtbecause the president doesn’t have much control over the national debt during their first year in office.

For example, President Donald Trump took office in January 2017. He submitted his first budget in May. It covered the 2018 fiscal year, which didn’t begin until October 1, 2017. Trump operated the first part of his term under President Barack Obama’s budget for fiscal year 2017, which ended on Sept. 30, 2017.2

fusing, Congress intentionally sets it up this way. An advantage of the federal fiscal year is that it gives the new president time to put together their budget during their first months in office.

The Best Way to Measure Debt by President

The best way to measure a president’s debt is to add up their budget deficits and compare that total to the debt level when they took office. A president’s budget reveals their administration’s priorities.

Note

Though they sound similar, deficit and debt are two different things. A deficit is a budget shortfall, whereas debt is the running total of all deficits and surpluses. Deficits add to the debt, while surpluses reduce it.

Top 5 Presidents Who Contributed to the Debt by Percentage

Franklin D. Roosevelt (1933-1945)

President Roosevelt added the largest percentage increase to the national debt. Although he only added $236 billion, this was an increase of about 1,048% from the $22.5 billion debt level left by President Herbert Hoover before him. The Great Depression and the New Deal contributed to FDR’s yearly deficits, but the biggest cost was World War II—it added $186.3 billion to the debt between 1942 and 1945.3

Woodrow Wilson (1913-1921)

President Wilson was the second-largest contributor to the debt, percentage-wise. He added about $21 billion, which was a 723% increase over the $2.9 billion debt of his predecessor. World War I contributed to the deficits that raised the national debt.3

Ronald Reagan (1981-1989)

President Reagan increased the debt by $1.86 trillion, or by 186%. Reagan’s supply-side economics didn’t grow the economy enough to offset the lost revenue from its tax cuts. Reagan also increased the defense budget by 35%.4

George W. Bush (2001-2009)

President Bush added $5.85 trillion to the national debt. That’s a 101% increase, putting him in fourth. Bush launched the War on Terror in response to the 9/11 attacks, which led to multi-trillion-dollar spending on the War in Afghanistan and the War in Iraq. Bush also dealt with the 2001 recession and the 2008 financial crisis.5

Barack Obama (2009-2017)

Under President Obama, the national debt grew the most in dollar terms ($8.6 trillion) and was fifth by percentage at 74%. Obama fought the Great Recession with an $831 billion economic stimulus package and added $858 billion through tax cuts. Even though the fiscal year 2009 budget was set by President Bush, Obama added to it with the Economic Stimulus Act in 2009.657

US Debt Increase by President Per Fiscal Year

The U.S. Treasury Department has historical tables that report the annual U.S. debt for each fiscal year (FY) since 1790. We’ve compiled this data from that source to create the figures used below.81

Joe Biden

In January 2023, the nation hit the $31.4 trillion debt limit Congress passed in 2021.9Republican lawmakers control the House of Representatives and said they won’t raise the debt limit unless Democrats, who control the Senate, agree to budget cuts.

On Oct. 1, 2021, at the end of fiscal year 2021, the national debt was $28.4 trillion. Between the end of fiscal year 2020 and the end of fiscal year 2021, the national debt grew $1.5 trillion, a 5.6% increase year over year. For fiscal year 2022, President Joe Biden’s budget included a deficit of $1.84 trillion, and by August 2022, the national debt had grown to $30.8 trillion.110

When Biden took office, the economy and household finances were still reeling from the pandemic, and Biden continued his predecessor’s policy of spending heavily to keep households afloat. In March 2021, Biden signed the American Rescue Plan, which showered taxpayers with pandemic relief cash in the form of stimulus checks and extra unemployment payments, and temporarily expanded child tax credits, plus other help. It all came with a cost to future budgets: The bill would add $1.9 trillion to the national debt by 2031, the Congressional Budget Office estimated.11

The bipartisan infrastructure bill, signed by Biden in November 2021, which provided new funding for highways, railways, broadband Internet expansion and other projects, added to the debt too, with estimates on its 10-year impact ranging from $374 billion to $400 billion, depending on how it’s calculated.1213

Some of Biden’s actions cut the other way. In August 2022, Biden signed the Inflation Reduction Act, an anti-climate change bill that spent money on new green energy programs and tax credits as well as to make drugs cheaper for patients, and paid for it by raising taxes on corporations and the ultra-wealthy. The bill should reduce the national debt by $102 billion by 2031, the CBO estimated.14

Biden followed up this bill with an executive action that forgave up to $10,000 of federal student loan debt per borrower, and $20,000 for those who received Pell Grants. He also proposed a new, cheaper income-driven student loan repayment program for future borrowers. However, he also announced that student loan interest and required payments, both of which had been frozen since the pandemic hit, would resume in January 2023.15

In August 2022, the government did not have an official estimate for how these measures would impact the national debt. One piece of it—forgiving $10,000 of debt per student loan borrower—would cost $329.7 billion over 10 years, according to an estimate by the Wharton School of Business.16

Donald Trump

At the end of fiscal year 2020, the debt was $26.9 trillion. Trump added $6.7 trillion to the debt between fiscal year 2017 and fiscal year 2020, a 33.1% increase, largely due to the effects of the coronavirus pandemic and 2020 recession.

In his FY 2021 budget, Trump’s budget included a $966 billion deficit.17 However, the national debt actually grew by $1.5 trillion between October 1, 2020, and October 1, 2021.

  • FY 2021: $1.5 trillion
  • FY 2020: $4.2 trillion
  • FY 2019: $1.2 trillion
  • FY 2018: $1.3 trillion

Barack Obama

President Obama added about $8.6 trillion, about a 74% increase, to the national debt at the end of President Bush’s last budget in 2009.

  • FY 2017: $671 billion
  • FY 2016: $1.42 trillion
  • FY 2015: $326 billion
  • FY 2014: $1.09 trillion
  • FY 2013: $672 billion
  • FY 2012: $1.28 trillion
  • FY 2011: $1.23 trillion
  • FY 2010: $1.65 trillion
  • FY 2009: $253 billion (Congress passed the Economic Stimulus Act, which spent $253 billion)18

George W. Bush

President Bush added $5.85 trillion to the national debt, a 101% increase from the $5.8 trillion debt at the end of Clinton’s last budget for fiscal year 2001.

  • FY 2009: $1.63 trillion (this was Bush’s deficit without the impact of the Economic Stimulus Act)
  • FY 2008: $1.02 trillion
  • FY 2007: $501 billion
  • FY 2006: $574 billion
  • FY 2005: $553 billion
  • FY 2004: $596 billion
  • FY 2003: $555 billion
  • FY 2002: $421 billion

Bill Clinton

President Clinton increased the national debt by almost $1.4 trillion, almost a 32% increase from the $4.4 trillion debt at the end of President H.W. Bush’s last budget.54

  • FY 2001: $133 billion
  • FY 2000: $18 billion
  • FY 1999: $130 billion
  • FY 1998: $113 billion
  • FY 1997: $189 billion
  • FY 1996: $251 billion
  • FY 1995: $281 billion
  • FY 1994: $281 billion

George H.W. Bush

President H.W. Bush added $1.55 trillion to the debt, a 54% increase from the $2.857 trillion debt at the end of Reagan’s last budget.4

  • FY 1993: $347 billion
  • FY 1992: $399 billion
  • FY 1991: $432 billion
  • FY 1990: $376 billion

Ronald Reagan

President Regan added $1.86 trillion to the national debt, a 186% increase from the $997.8 billion debt at the end of Carter’s last budget.4

  • FY 1989: $255 billion
  • FY 1988: $252 billion
  • FY 1987: $225 billion
  • FY 1986: $302 billion
  • FY 1985: $251 billion
  • FY 1984: $195 billion
  • FY 1983: $235 billion
  • FY 1982: $145 billion

Jimmy Carter

President Carter added $299 billion to the debt, a 42.7% increase from the $698.8 billion debt at the end of Ford’s last budget.4

  • FY 1981: $90.1 billion
  • FY 1980: $81.1 billion
  • FY 1979: $54.9 billion
  • FY 1978: $72.7 billion

Gerald Ford

President Ford added $223.7 billion to the debt.4

  • FY 1977: $78.4 billion
  • FY 1976: $87.2 billion
  • FY 1975: $58.1 billion

Richard Nixon

President Nixon added $121.1 billion to the national debt, a 34% increase from the $353.7 billion debt at the end of President Johnson’s last budget.4

  • FY 1974: $16.9 billion
  • FY 1973: $30.8 billion
  • FY 1972: $29.1 billion
  • FY 1971: $27.2 billion
  • FY 1970: $17.1 billion

Lyndon B. Johnson

President Johnson added $41.8 billion to the national debt, just a small 13% increase from the $312 billion debt at the end of President Kennedy’s time in office in 1964.4

  • FY 1969: $6.1 billion
  • FY 1968: $21.3 billion
  • FY 1967: $6.3 billion
  • FY 1966: $2.6 billion
  • FY 1965: $5.5 billion

John F. Kennedy

President Kennedy added $22.6 billion to the national debt.4

  • FY 1964: $5.8 billion
  • FY 1963: $7.6 billion
  • FY 1962: $9.2 billion

Dwight Eisenhower

President Eisenhower added $22.8 billion to the national debt.4

  • FY 1961: $2.6 billion
  • FY 1960: $1.6 billion
  • FY 1959: $8.3 billion
  • FY 1958: $5.8 billion
  • FY 1957: $2.2 billion surplus
  • FY 1956: $1.6 billion surplus
  • FY 1955: $3.1 billion
  • FY 1954: $5.1 billion

Harry Truman

President Truman added $7.3 billion to the national debt.43

  • FY 1953: $6.9 billion
  • FY 1952: $3.8 billion
  • FY 1951: $2.1 billion surplus
  • FY 1950: $4.5 billion
  • FY 1949: $478 million surplus
  • FY 1948: $6 billion surplus
  • FY 1947: $11 billion surplus
  • FY 1946: $10.7 billion

Franklin D. Roosevelt

President Roosevelt increased the national debt by $236 billion, a 1,048% increase from the $22.5 billion debt at the end of Hoover’s last budget.3

  • FY 1945: $57.7 billion
  • FY 1944: $64.3 billion
  • FY 1943: $64.2 billion
  • FY 1942: $23.5 billion
  • FY 1941: $6 billion
  • FY 1940: $2.5 billion
  • FY 1939: $3.2 billion
  • FY 1938: $740 million
  • FY 1937: $2.6 billion
  • FY 1936: $5 billion
  • FY 1935: $1.6 billion
  • FY 1934: $4.5 billion

Herbert Hoover

President Hoover added about $5.7 billion to the national debt.3

  • FY 1933: $3 billion
  • FY 1932: $2.8 billion
  • FY 1931: $616 million
  • FY 1930: $746 million surplus

Calvin Coolidge

President Coolidge reduced the national debt by about $5.3 billion.3

  • FY 1929: $673 million surplus
  • FY 1928: $907 million surplus
  • FY 1927: $1.1 billion surplus
  • FY 1926: $873 million surplus
  • FY 1925: $734.6 million surplus
  • FY 1924: $1 billion surplus

Warren G. Harding

President Harding reduced the national debt by about $1.6 billion thanks to budget surpluses.3

  • FY 1923: $614 million surplus
  • FY 1922: $1 billion surplus

Woodrow Wilson

President Wilson added about $21 billion to the national debt, a 723% increase from the $2.9 billion debt at the end of Taft’s last budget for fiscal year 1913.3

  • FY 1921: $1.9 billion surplus
  • FY 1920: $1.4 billion surplus
  • FY 1919: $12.8 billion
  • FY 1918: $9.8 billion
  • FY 1917: $2.1 billion
  • FY 1916: $551 million
  • FY 1915: $146 million
  • FY 1914: $0 (slight surplus)

Note

All presidents from 1790 to 1913 added a total of $2.8 billion to the national debt.8

Frequently Asked Questions (FAQ)

Which president has put the United States the most in debt?

President Joe Biden is on track to add the most to the budget deficit, largely due to the costs associated with continuing to battle the coronavirus pandemic. In late 2021, Congress voted to raise the debt ceiling.

Why does the United States owe so much debt?

Continued decreases in the amount of taxes paid by corporations and the wealthiest Americans have resulted in less money coming in. At the same time, spending on pandemic relief and the military continues to increase.

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

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Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

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Democrats Refuse to Deal as House Republicans Deliver a Pro-Growth Bill to Reduce Spending

A.F. Branco for Oct 21, 2021

It’s important to understand why House Republicans’ proposal on the debt ceiling would be an excellent step toward restoring fiscal sanity to the Washington swamp. Pictured: President Joe Biden presents a copy of his State of the Union speech Feb. 7 to House Speaker Kevin McCarthy, R-Calif., before delivering the address to a joint session of Congress. (Photo: Jacquelyn Martin/Pool/Getty Images)

House Speaker Kevin McCarthy, R-Calif., releasedtext April 19 of legislation dubbed the Limit, Save, Grow Act. The bill, a focus of internal negotiationsamong House Republicans, would provide an increase in the federal debt ceiling lasting into next spring in exchange for a package of reforms aimed at lowering future deficits and boosting economic growth.

This approach of pairing debt ceiling increases with fiscally responsible reforms has public support, but Washington has an uneven track record of doing the right thing. In recent years, Congress has tended to punt and allow huge increases to the federal debt limit without any meaningful reforms.

Kicking the can down the road is exactly what Senate Majority Leader Chuck Schumer, R-N.Y., wants.

A “clean” debt limit increase such as Democrats seek would mean ignoring the stark reality of what America’s financial trajectory looks like:

McCarthy has criticized President Joe Biden for an unwillingness to negotiate a debt limit deal, which puts Biden to the left of former Presidents Bill Clinton and Barack Obama, both fellow Democrats. Even House Democrats are concerned about Biden’s approach.

Although there is no telling how the debt standoff drama will play out, it’s important to understand why House Republicans’ proposal would be an excellent step toward restoring fiscal sanity to the Washington swamp.

In turn, deficit reduction also would  go a long way toward slowing the inflation that has punished hardworking families since the start of the Biden administration.

Bringing Spending Back to Earth, Repealing Unspent COVID-19 Cash

On the spending side, the most significant proposal in House Republicans’ Limit, Save, Grow Act is a reduction in discretionary spending, which covers most federal activity outside of major benefit programs.

The bill would reduce budget authority for fiscal year 2024 to the level of fiscal year 2022, then allow increases of 1% per year moving forward.

Although this might seem like a modest change—reverting to spending levels passed less than two years ago—it would lead to big savings.

That’s because Congress passed a bloated, pork-filled spending frenzy to cover fiscal year 2023, which began Oct. 1. Merely undoing the spending increases from that one-year period would save taxpayers $131.3 billion.

Holding spending growth to 1% per year, rather than the almost 9% growth in the last bill, would lead directly to even larger savings every year thereafter, as well as significantly reduced net interest costs.

The Congressional Budget Office estimates that this approach would save $3.2 trillion over a decade, or about $25,000 per household.

If Congress enacts a long-term discretionary spending limit, it’s vital for taxpayers to hold their representatives’ feet to the fire. The Budget Control Act of 2011 led to spending caps that saved hundreds of billions of dollars, but the caps eventually were undone in a series of bipartisan deals.

Americans must remember that members of Congress will not do the right thing with public funds unless they know that there will be consequences for irresponsibility. As the tea party movement waned, Washington’s big spenders went hog wild.

Another way the Republican savings package would address reckless spending is by rescinding leftover funds passed during the COVID-19 spending spree, saving tens of billions of dollars.

Ending Biden’s Student Loan Bailouts

The next-largest amount of savings in the Limit, Save, Grow Act, worth $460 billion, would target the Biden administration’s outrageous attempt to cancel student loan debt for those who haven’t felt like repaying what they owe.

This attempted power grab is politically corrupt, so unconstitutional that even then-House Speaker Nancy Pelosi said in 2021 that it would be illegal. It’s an insult to both those who repaid their student debt and to the tens of millions of taxpayers who never took out student loans in the first place.

The House package also would end the loan repayment pause that began in March 2020 as a result of the COVID-19 pandemic. Biden repeatedly has extended the pause, which  now will last through June 30 even though the administration belatedly ended the national emergency two weeks ago.

Trading ‘Green New Deal’ for Low-Cost American Energy

The Limit, Save, Grow Act includes two sections devoted to energy policy:

  • Repeal of a swath of hyper-expensive “green” energy and electric vehicle tax credits passed by Democrats last year.
  • The entirety of HR 1, the Lower Energy Costs Act, which the House passed March 30. It primarily serves to enable more domestic energy production by reforming outdated and cumbersome regulations that impose massive costs for minimal environmental effects.

Although the two sections are not explicitly linked, they flow from the same stream of thought.

Rather than using a mix of taxes, subsidies, and regulations to micromanage the nation’s energy and transportation sectors—the approach of Biden and other progressives—House Republicans would empower Americans to produce and consume energy in ways that best suit them.

This one-two punch has many benefits. It would help prevent energy dependence on China (which controls much of the supply chain for many “green” products such as batteries and rare minerals), grow the economy through increased energy production and lower energy prices, create hundreds of thousands of jobs, and reduce future deficits by hundreds of billions (or even trillions) of dollars.

These provisions would do more to combat inflation than anything Congress has done in decades.

Rescinding That Huge Funding Boost for IRS

The so-called Inflation Reduction Act of 2022 provided the Internal Revenue Service with almost $80 billion of supplemental funding through fiscal year 2031. These funds were in addition to the agency’s regular annual appropriations, which stood at $12.6 billion as of fiscal 2022.

The Limit, Save, Grow Act would rescind most of the unspent portion of the supplemental IRS funding, but would leave in place funding set aside for taxpayer services, business systems modernization (technology improvements), and agency oversight. The new House bill potentially would prevent IRS outlays of more than $45 billion on enforcement and nearly $25 billion on operations between fiscal 2024 and 2031.

The enforcement portion of the IRS funding was perhaps the most controversial element of the biggest tax-and-spend bill of 2022. Enforcement almost entirely consists of new audit examinations and collections.

Repeal of the extra IRS funding would save honest taxpayers in at least three ways, by: (1) reducing direct taxpayer funding to the IRS, (2) reducing the number of costly and time-consuming audits Americans face, and (3) lowering consumer prices by reducing company overhead, especially for small businesses that can ill afford to pay high-priced accountants and lawyers for tax and audit services.

On April 19, the IRS submitted a compendium of its strategic operating plan to the Senate Finance Committee, and that document shows that the IRS plans to amass an enormous enforcement apparatus, more than tripling its spending on enforcement from about $5.4 billion in 2022 to about $16.9 billion in 2031.

If IRS employees assigned to enforcement were to increase at the same rate as enforcement funding, that would allow the IRS to hire more than 76,000 more full-time employees in enforcement by 2031. If the IRS averaged 50 audits of households per year per new full-time employee in enforcement (less than one audit per week per new employee), that would mean 3.8 million additional audits in 2031 alone.

(Incidentally, fewer than 3.8 million American households reported adjusted gross income of greater than $400,000 as of 2020.)

The coming wave of new IRS audits would impose a huge cost on Americans, regardless of whether they themselves were selected for an audit. The $144.5 billion accounting industry would benefit, but everyday Americans would pay the price if labor and scarce resources were diverted from producing the goods and services they need and shifted to the IRS, accountants, and lawyers.

By constraining the IRS and freeing American workers and small businesses from excessive audits, the Limit, Save, Grow Act wouldn’t just save Americans money, it also would limit the expansion of government and grow the economy.

Work Requirements: Good for Welfare Recipients and Taxpayers

An aspect of the Limit, Save, Grow Act that is receiving outsize attention considering its budgetary impact is adding and strengthening work requirements for federal programs such as Medicaid and food stamps.

The estimated savings, in the neighborhood of $100 billion over a decade, are certainly helpful. However, what matters more is the beneficial effect that work requirements have in rescuing families from the trap of dependency on government.

Welfare reform made great strides in the 1990s by steering the able-bodied into the workforce, which in turn dramatically reduced poverty in single-parent households. Unfortunately, some of that progress has been lost in recent years, and millions of open jobs are available to adults who are languishing in the welfare system.

While the Left portrays work requirements as a harmful burden, keeping adults in the workforce actually has a variety of positive effects beyond improved household financials, including better mental and physical health. That means these reforms would be worth passing even if they didn’t reduce future deficits—which they do.

Protecting the Economy from Regulatory Strangulation

Although discussions about the federal budget typically focus on spending and taxes, Congress has another method to reduce long-term deficits: increasing economic growth by reducing burdensome regulations.

The Limit, Save, Grow Act contains the contents of the REINS (Regulations from the Executive in Need of Scrutiny) Act, a measure that would force presidential administrations to receive approval from Congress before implementing major regulations.

This would prevent administrations from abusing executive authority and also make it more difficult for Washington to entangle businesses in additional layers of red tape. Such protections are badly needed due to the radical bend of the Biden administration, which has pushed statutes to a breaking point in pursuit of increasing its control over the economy.

While the REINS Act is only one of many necessary actions Congress should take regarding regulation, it would help bolster economic growth, which in turn would help the nation’s bottom line.

Conclusion: This Can’t Wait

The debate over the debt limit is likely to take center stage in the coming months. Hopefully, Democrats will put aside demagoguery long enough to participate in good faith negotiations.

In the meantime, House and Senate Republicans must stand their ground and make it clear to the public that tackling Washington’s unsustainable, inflationary spending can’t wait.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Remember to include the url or headline of the article plus your name and town and/or state.

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]

Dan Mitchell article: The Case Against Biden’s Class-Warfare Tax Policy, Part VI

A.F. Branco for Oct 21, 2021

The Case Against Biden’s Class-Warfare Tax Policy, Part VI

Last week, I wrote about Biden’s proposed budget, focusing on the aggregate increase in the fiscal burden.

Today, let’s take a closer look at his class-warfare tax proposals. Consider this Part VI in a series (Parts I-V can be found hereherehere, here, and here), and we’ll use data from the folks at the Tax Foundation.

We’ll start with this map, which shows each state’s top marginal tax rate on household income if Biden’s budget is enacted.

The main takeaway is that five state would have combined top tax rates of greater than 50 percent if Biden is successful in pushing the top federal rate from 37 percent to 39.6 percent.

At the risk of understatement, that’s not a recipe for robust entrepreneurship.

While it is a very bad idea to have high marginal tax rates, it’s also important to look at whether the government is taxing some types of income more than one time.

That’s already a pervasive problem.

Yet the Tax Foundation shows that Biden wants to make the problem worse. Much worse.

His proposed increase in the corporate tax rate is awful, but his proposal to nearly double the tax burden on capital gains is incomprehensibly foolish.

I guess we should be happy that Biden didn’t propose to also increase the 40 percent rate imposed by the death tax.

But that’s not much solace considering what Biden would do to American competitiveness. Here’s our final visual for today.

As you can see, the president wants to make the US slightly worse than average for personal income taxes, significantly worse than average for the corporate income tax, and absurdly worse than average for taxes on capital gains and dividends.

I’ll close by observing that some of my leftist friends defend these taxes since they target the “evil rich.”

I have a moral disagreement with their view that people should be punished simply because they are successful investors, entrepreneurs, or business owners.

But the bigger problem is that they don’t understand economics. Academic research shows that ordinary workers benefit when top tax rates are low, and there’s even more evidence that workers are hurtwhen there is punitive double taxation on saving and investment.

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]

Dan Mitchell: More Government = More Corruption

More Government = More Corruption

My Democratic friends correctly argue that Republicans have a corruption problem and my GOP friends correctly argue that Democrats have a corruption problem.

I wish both sides would recognize that the real problem is big government.

As I wrote last year, “unethical people are naturally drawn to politics and unethical interest groups naturally seek to obtain unearned wealth (a process known as “rent seeking“).”

And I shared lots of examples.

Today, let’s review some wise – and blunt – analysis from Steven Greenhut.

In an article for Reason, he connects the dots to show that the level of corruption is linked to the size and power of government.

Whenever some astounding corruption scandal explodes onto the front pages, the public is aghast and policymakers cobble together new reforms that promise to keep such outrages from occurring again. …Soon enough, however, we learn about new abuses—or some other scandal grabs the headlines. …corruption is inherent in a system where officials dole out public money and regulate almost everything we do. …The most corrupt nations are, of course, those where dictators, politburos, bureaucrats and security officials can do as they please—and where lowly citizens lack the right to free speech or due process. Our current government may be a far cry from the one the founders designed, but it attempts to limit government power, which is the main source of corruption. …corruption fundamentally is a problem of government power, as official actors use immense powers to help themselves and their allies. If we want less corruption, the solution is obvious: We need less government.

Amen. When government’s footprint is smaller, there’s less opportunity for graft.

The moral of the story is that Washington’s revolving door of legal corruption needs to be welded shut.

Thought that may be too much to hope for.

So maybe a more realistic goal is to simply not add more grease to the door so it spins even faster.

Perhaps we can learn from Estonia?

P.S. Today’s column focus on what small government is a good goal if we want less corruption, but don’t forget that there is also a very strong economic case for smaller government.

California is the Greece of the USA, but Texas is not perfect either!!!

Texas is in much better shape than California. Taxes are lower, in part because Texas has no state income tax.

No wonder the Lone Star State is growing faster and creating more jobs.

And the gap will soon get even wider since California voters recently decided to drive away more productive people by raising top tax rates.

But a key challenge for all governments is controlling the size and cost of bureaucracies.

Government employees are probably overpaid in both states, but the situation is worse in California, as I discuss in this interview with John Stossel.

Dan Mitchell Comparing Excessive Bureaucrat Compensation in Texas and California

But being better than California is not exactly a ringing endorsement of Texas fiscal policy.

A column in today’s Wall Street Journal, written by the state’s Comptroller of Public Accounts, points out some worrisome signs.

As the chief financial officer of the nation’s second-largest state, even I have found it hard to get a handle on how much governments are spending, and how much debt they’re taking on. Every level of government is piling up incredible bills. And they’re coming due, whether we like it or not. Even in low-tax Texas, property taxes have risen three times faster than the inflation rate and four times faster than our population growth since 1992. Our local governments, meanwhile, more than doubled their debt load in the last decade, to more than $7,500 in debt for every man, woman and child in the state. In Houston alone, city-employee pension plans are facing an unfunded liability of $2.4 billion. But too many taxpayers aren’t given the information they need to make informed decisions when they vote debt issues. Recently I spent several months holding about 40 town-hall meetings with Texans across our state. Each time, I asked the attendees if they could tell me how much debt their local governments are carrying. Not a single person in a single town had this information.

In other words, taxpayers need to be eternally vigilant, regardless of where they live. Otherwise the corrupt rectangle of politicians, bureaucrats, lobbyists, and interest groups will figure out hidden ways of using the political process to obtain unearned wealth.

P.S. The second-most-viewed post on this blog is this joke about Texas, California, and a coyote, so it must be at least somewhat amusing. If you want some Texas-specific humor, this police exam is amusing and you’ll enjoy this joke about the difference between Texans, liberals and conservatives. And if you want California-specific humor, this Chuck Asay cartoon hits the nail on the head.

US Debt by President: By Dollar and Percentage

——

Milton Friedman – Deficits and Government Spending

————-

A.F. Branco for Oct 21, 2021

US Debt by President: By Dollar and Percentage

Who increased the U.S. debt the most? That depends on how you measure it.

US President Barack Obama (L) former President Bill Clinton (C) and former President George W. Bush (R) walk to the Rose Garden
PHOTO:MARK WILSON/STAFF/GETTY IMAGES

What’s the best way to determine how much each president has contributed to our nation’s $31 trillion in U.S. debt? The most popular ways to measure involve comparing the debt level from when a president enters office to the debt level when they leave. It’s also good to compare the debt as a percentage of economic output, which takes into account the size of the economy at the time the administration accumulated the debt.1

Drawback of Measuring Debt by President

Neither of the techniques mentioned above is a very accurate way to measure each president’s impact on the national debtbecause the president doesn’t have much control over the national debt during their first year in office.

For example, President Donald Trump took office in January 2017. He submitted his first budget in May. It covered the 2018 fiscal year, which didn’t begin until October 1, 2017. Trump operated the first part of his term under President Barack Obama’s budget for fiscal year 2017, which ended on Sept. 30, 2017.2

fusing, Congress intentionally sets it up this way. An advantage of the federal fiscal year is that it gives the new president time to put together their budget during their first months in office.

The Best Way to Measure Debt by President

The best way to measure a president’s debt is to add up their budget deficits and compare that total to the debt level when they took office. A president’s budget reveals their administration’s priorities.

Note

Though they sound similar, deficit and debt are two different things. A deficit is a budget shortfall, whereas debt is the running total of all deficits and surpluses. Deficits add to the debt, while surpluses reduce it.

Top 5 Presidents Who Contributed to the Debt by Percentage

Franklin D. Roosevelt (1933-1945)

President Roosevelt added the largest percentage increase to the national debt. Although he only added $236 billion, this was an increase of about 1,048% from the $22.5 billion debt level left by President Herbert Hoover before him. The Great Depression and the New Deal contributed to FDR’s yearly deficits, but the biggest cost was World War II—it added $186.3 billion to the debt between 1942 and 1945.3

Woodrow Wilson (1913-1921)

President Wilson was the second-largest contributor to the debt, percentage-wise. He added about $21 billion, which was a 723% increase over the $2.9 billion debt of his predecessor. World War I contributed to the deficits that raised the national debt.3

Ronald Reagan (1981-1989)

President Reagan increased the debt by $1.86 trillion, or by 186%. Reagan’s supply-side economics didn’t grow the economy enough to offset the lost revenue from its tax cuts. Reagan also increased the defense budget by 35%.4

George W. Bush (2001-2009)

President Bush added $5.85 trillion to the national debt. That’s a 101% increase, putting him in fourth. Bush launched the War on Terror in response to the 9/11 attacks, which led to multi-trillion-dollar spending on the War in Afghanistan and the War in Iraq. Bush also dealt with the 2001 recession and the 2008 financial crisis.5

Barack Obama (2009-2017)

Under President Obama, the national debt grew the most in dollar terms ($8.6 trillion) and was fifth by percentage at 74%. Obama fought the Great Recession with an $831 billion economic stimulus package and added $858 billion through tax cuts. Even though the fiscal year 2009 budget was set by President Bush, Obama added to it with the Economic Stimulus Act in 2009.657

US Debt Increase by President Per Fiscal Year

The U.S. Treasury Department has historical tables that report the annual U.S. debt for each fiscal year (FY) since 1790. We’ve compiled this data from that source to create the figures used below.81

Joe Biden

In January 2023, the nation hit the $31.4 trillion debt limit Congress passed in 2021.9Republican lawmakers control the House of Representatives and said they won’t raise the debt limit unless Democrats, who control the Senate, agree to budget cuts.

On Oct. 1, 2021, at the end of fiscal year 2021, the national debt was $28.4 trillion. Between the end of fiscal year 2020 and the end of fiscal year 2021, the national debt grew $1.5 trillion, a 5.6% increase year over year. For fiscal year 2022, President Joe Biden’s budget included a deficit of $1.84 trillion, and by August 2022, the national debt had grown to $30.8 trillion.110

When Biden took office, the economy and household finances were still reeling from the pandemic, and Biden continued his predecessor’s policy of spending heavily to keep households afloat. In March 2021, Biden signed the American Rescue Plan, which showered taxpayers with pandemic relief cash in the form of stimulus checks and extra unemployment payments, and temporarily expanded child tax credits, plus other help. It all came with a cost to future budgets: The bill would add $1.9 trillion to the national debt by 2031, the Congressional Budget Office estimated.11

The bipartisan infrastructure bill, signed by Biden in November 2021, which provided new funding for highways, railways, broadband Internet expansion and other projects, added to the debt too, with estimates on its 10-year impact ranging from $374 billion to $400 billion, depending on how it’s calculated.1213

Some of Biden’s actions cut the other way. In August 2022, Biden signed the Inflation Reduction Act, an anti-climate change bill that spent money on new green energy programs and tax credits as well as to make drugs cheaper for patients, and paid for it by raising taxes on corporations and the ultra-wealthy. The bill should reduce the national debt by $102 billion by 2031, the CBO estimated.14

Biden followed up this bill with an executive action that forgave up to $10,000 of federal student loan debt per borrower, and $20,000 for those who received Pell Grants. He also proposed a new, cheaper income-driven student loan repayment program for future borrowers. However, he also announced that student loan interest and required payments, both of which had been frozen since the pandemic hit, would resume in January 2023.15

In August 2022, the government did not have an official estimate for how these measures would impact the national debt. One piece of it—forgiving $10,000 of debt per student loan borrower—would cost $329.7 billion over 10 years, according to an estimate by the Wharton School of Business.16

Donald Trump

At the end of fiscal year 2020, the debt was $26.9 trillion. Trump added $6.7 trillion to the debt between fiscal year 2017 and fiscal year 2020, a 33.1% increase, largely due to the effects of the coronavirus pandemic and 2020 recession.

In his FY 2021 budget, Trump’s budget included a $966 billion deficit.17 However, the national debt actually grew by $1.5 trillion between October 1, 2020, and October 1, 2021.

  • FY 2021: $1.5 trillion
  • FY 2020: $4.2 trillion
  • FY 2019: $1.2 trillion
  • FY 2018: $1.3 trillion

Barack Obama

President Obama added about $8.6 trillion, about a 74% increase, to the national debt at the end of President Bush’s last budget in 2009.

  • FY 2017: $671 billion
  • FY 2016: $1.42 trillion
  • FY 2015: $326 billion
  • FY 2014: $1.09 trillion
  • FY 2013: $672 billion
  • FY 2012: $1.28 trillion
  • FY 2011: $1.23 trillion
  • FY 2010: $1.65 trillion
  • FY 2009: $253 billion (Congress passed the Economic Stimulus Act, which spent $253 billion)18

George W. Bush

President Bush added $5.85 trillion to the national debt, a 101% increase from the $5.8 trillion debt at the end of Clinton’s last budget for fiscal year 2001.

  • FY 2009: $1.63 trillion (this was Bush’s deficit without the impact of the Economic Stimulus Act)
  • FY 2008: $1.02 trillion
  • FY 2007: $501 billion
  • FY 2006: $574 billion
  • FY 2005: $553 billion
  • FY 2004: $596 billion
  • FY 2003: $555 billion
  • FY 2002: $421 billion

Bill Clinton

President Clinton increased the national debt by almost $1.4 trillion, almost a 32% increase from the $4.4 trillion debt at the end of President H.W. Bush’s last budget.54

  • FY 2001: $133 billion
  • FY 2000: $18 billion
  • FY 1999: $130 billion
  • FY 1998: $113 billion
  • FY 1997: $189 billion
  • FY 1996: $251 billion
  • FY 1995: $281 billion
  • FY 1994: $281 billion

George H.W. Bush

President H.W. Bush added $1.55 trillion to the debt, a 54% increase from the $2.857 trillion debt at the end of Reagan’s last budget.4

  • FY 1993: $347 billion
  • FY 1992: $399 billion
  • FY 1991: $432 billion
  • FY 1990: $376 billion

Ronald Reagan

President Regan added $1.86 trillion to the national debt, a 186% increase from the $997.8 billion debt at the end of Carter’s last budget.4

  • FY 1989: $255 billion
  • FY 1988: $252 billion
  • FY 1987: $225 billion
  • FY 1986: $302 billion
  • FY 1985: $251 billion
  • FY 1984: $195 billion
  • FY 1983: $235 billion
  • FY 1982: $145 billion

Jimmy Carter

President Carter added $299 billion to the debt, a 42.7% increase from the $698.8 billion debt at the end of Ford’s last budget.4

  • FY 1981: $90.1 billion
  • FY 1980: $81.1 billion
  • FY 1979: $54.9 billion
  • FY 1978: $72.7 billion

Gerald Ford

President Ford added $223.7 billion to the debt.4

  • FY 1977: $78.4 billion
  • FY 1976: $87.2 billion
  • FY 1975: $58.1 billion

Richard Nixon

President Nixon added $121.1 billion to the national debt, a 34% increase from the $353.7 billion debt at the end of President Johnson’s last budget.4

  • FY 1974: $16.9 billion
  • FY 1973: $30.8 billion
  • FY 1972: $29.1 billion
  • FY 1971: $27.2 billion
  • FY 1970: $17.1 billion

Lyndon B. Johnson

President Johnson added $41.8 billion to the national debt, just a small 13% increase from the $312 billion debt at the end of President Kennedy’s time in office in 1964.4

  • FY 1969: $6.1 billion
  • FY 1968: $21.3 billion
  • FY 1967: $6.3 billion
  • FY 1966: $2.6 billion
  • FY 1965: $5.5 billion

John F. Kennedy

President Kennedy added $22.6 billion to the national debt.4

  • FY 1964: $5.8 billion
  • FY 1963: $7.6 billion
  • FY 1962: $9.2 billion

Dwight Eisenhower

President Eisenhower added $22.8 billion to the national debt.4

  • FY 1961: $2.6 billion
  • FY 1960: $1.6 billion
  • FY 1959: $8.3 billion
  • FY 1958: $5.8 billion
  • FY 1957: $2.2 billion surplus
  • FY 1956: $1.6 billion surplus
  • FY 1955: $3.1 billion
  • FY 1954: $5.1 billion

Harry Truman

President Truman added $7.3 billion to the national debt.43

  • FY 1953: $6.9 billion
  • FY 1952: $3.8 billion
  • FY 1951: $2.1 billion surplus
  • FY 1950: $4.5 billion
  • FY 1949: $478 million surplus
  • FY 1948: $6 billion surplus
  • FY 1947: $11 billion surplus
  • FY 1946: $10.7 billion

Franklin D. Roosevelt

President Roosevelt increased the national debt by $236 billion, a 1,048% increase from the $22.5 billion debt at the end of Hoover’s last budget.3

  • FY 1945: $57.7 billion
  • FY 1944: $64.3 billion
  • FY 1943: $64.2 billion
  • FY 1942: $23.5 billion
  • FY 1941: $6 billion
  • FY 1940: $2.5 billion
  • FY 1939: $3.2 billion
  • FY 1938: $740 million
  • FY 1937: $2.6 billion
  • FY 1936: $5 billion
  • FY 1935: $1.6 billion
  • FY 1934: $4.5 billion

Herbert Hoover

President Hoover added about $5.7 billion to the national debt.3

  • FY 1933: $3 billion
  • FY 1932: $2.8 billion
  • FY 1931: $616 million
  • FY 1930: $746 million surplus

Calvin Coolidge

President Coolidge reduced the national debt by about $5.3 billion.3

  • FY 1929: $673 million surplus
  • FY 1928: $907 million surplus
  • FY 1927: $1.1 billion surplus
  • FY 1926: $873 million surplus
  • FY 1925: $734.6 million surplus
  • FY 1924: $1 billion surplus

Warren G. Harding

President Harding reduced the national debt by about $1.6 billion thanks to budget surpluses.3

  • FY 1923: $614 million surplus
  • FY 1922: $1 billion surplus

Woodrow Wilson

President Wilson added about $21 billion to the national debt, a 723% increase from the $2.9 billion debt at the end of Taft’s last budget for fiscal year 1913.3

  • FY 1921: $1.9 billion surplus
  • FY 1920: $1.4 billion surplus
  • FY 1919: $12.8 billion
  • FY 1918: $9.8 billion
  • FY 1917: $2.1 billion
  • FY 1916: $551 million
  • FY 1915: $146 million
  • FY 1914: $0 (slight surplus)

Note

All presidents from 1790 to 1913 added a total of $2.8 billion to the national debt.8

Frequently Asked Questions (FAQ)

Which president has put the United States the most in debt?

President Joe Biden is on track to add the most to the budget deficit, largely due to the costs associated with continuing to battle the coronavirus pandemic. In late 2021, Congress voted to raise the debt ceiling.

Why does the United States owe so much debt?

Continued decreases in the amount of taxes paid by corporations and the wealthiest Americans have resulted in less money coming in. At the same time, spending on pandemic relief and the military continues to increase.

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

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What Jerry Seinfeld’s ‘Black Card’ Can Teach Lawmakers About Debt Limit

17 Reasons the large national debt is a big deal!!!

We got to stop spending so much money and start paying off our national debt or the future of our children and grandchildren will be very sad indeed. Everyone knows that entitlement spending must be cut but it seems we are not brave enough to do it. I have contacted my Congressmen and Senators over and over but nothing is getting done!!! At least there are 66 conservative Republicans in the House that have stood up  and voted against raising the debt ceiling.

Comedian Jerry Seinfeld waits for the next scene to be filmed for an episode of the program “Comedians in Cars Getting Coffee” near the Capitol in Washington on Dec. 6, 2015. All too many lawmakers under the Capitol dome think they have a no-spending-limits credit card of the sort Seinfeld joked about. (Photo: Matt McClain/The Washington Post/Getty Images)

As members of Congress debate the debt limit, some seem to think the government has an American Express “Black Card.”

In a 2018 episode of “Comedians in Cars Getting Coffee,” Jerry Seinfeld explained his version of how the Black Card came to be:

I was waiting for [the crew] to move some cameras, and the crew guy comes up to me, he says, ‘You got the Black Card?’ And I go, ‘No, what’s the Black Card?’ He says, ‘There’s only three in the world. The Sultan of Brunei has one, the president of American Express has one, and I thought you would have the third one.’ Next morning, I call the president of American Express. I go, ‘Is there a Black Card?’ He says, ‘It’s just a rumor. It doesn’t exist.’ He said, ‘But you know what? It’s not a bad idea.’ And so they developed it, and they gave me the first one.

The so-called Black Card—formally, the Centurion Card—is an exclusive, “no spending limit” credit card, available by invite only. While other companies also have their own versions of “no spending limit” credit cards, the reality is that none offers a blank check on spending.

The cards may have no preset spending limit, but they all limit cardholders’ purchasing power based on a rolling assessment of their creditworthiness and ability to repay.

And that makes sense because neither the Sultan of Brunei, nor Jerry Seinfeld, nor American politicians should be given a limitless line of credit.

America’s debt limit exists as a checkpoint, meant to protect Americans from the reckless accumulation of debt in their names, and those of their children and grandchildren. That’s why a majority of Americans oppose raising the debt limit unless policymakers also reduce spending.

Already, the U.S. has accumulated $31.4 trillion in federal debt—the equivalent of $242,000 per household.

If the federal government’s borrowing were subject to the same constraints as ordinary households, and it actually had to repay its borrowing, every household in America would suddenly have two mortgage or rent payments each month, instead of just one. (At $220,000 in 2021, average mortgage debt was slightly lower than each household’s share of the federal debt.)

But unlike ordinary households—and unlike even exclusive Black Card holders—the federal government can simply vote to raise or temporarily waive its debt limits.

Over the past decade, policymakers have frequently given lip service to the debt limit, choosing to “suspend” the debt limit for periods of time, instead of setting dollar limits, and usually failing to include meaningful measures to alter unsustainable federal spending.

The proof is in the pudding in the case against Congress granting itself unlimited spending periods. Over the course of 74 years, from the establishment of the first debt limit in 1939 (an amount equal to $968 billion in today’s dollars) to 2013, policymakers raised the debt limit by about $15.4 trillion.

In 2013, policymakers began the practice of “suspending” the debt limit instead of setting dollar limits and the consequence was $12 trillion in new debt over the following eight years, through 2021. That’s seven times the inflation-adjusted rate of expansion prior to the reckless practice of suspending the debt limit.

And the federal government blew through Democrats’ $2.5 trillion debt-limit increase enacted in December 2021, adding $19,200 in debt per household over the past 13 months.

>>> Combat the Inflation Reduction Act’s Central Planning

Imposing an actual debt limit and enacting meaningful spending reforms is crucial, because if politicians don’t set their own limits, they’ll face the market’s limits.

At some point, investors will become unwilling to continue lending to the U.S. government at reasonable interest rates, and recent years of reckless spending have pushed us closer to that point. The consequences of a market-imposed federal debt limit will be far more severe than the short-term effects of modest fiscal restraints that should accompany any debt-limit increase.

For example, if markets soured on U.S. debt in 2025, balancing the federal budget in that year alone would require policymakers to take an extra $10,000 per household across the U.S.

If, however, policymakers were to agree to meaningful spending reductions and pro-growth policy reforms in exchange for a specified increase in the debt limit, they could help avoid a fiscal crisis and start reducing the second-mortgage equivalent of federal debt that looms over every household in America.

They might even start to get us out of the red—and into the black.

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Have an opinion about this article? To sound off, please email letters@DailySignal.com and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Remember to include the url or headline of the article plus your name and town and/or state.

June 17, 2013 at 7:13 am

GO-Debt-Denial-rev_600

Remember the debt? That $17 trillion problem? Some in Washington seem to think it’s gone away.

The Washington Post reported that “the national debt is no longer growing out of control.” Lawmakers and liberal inside-the-Beltway organizations are floating the notion that it’s not a high priority any more.

We beg to differ, so we came up with 17 reasons that $17 trillion in debt is still a big, bad deal.

1. $53,769 – Your share of the national debt.  

As Washington continues to spend more than it can afford, every American will be on the hook for this massive debt burden.

willrogers_450

SHARE this graphic.

2. Personal income will be lower.

The skyrocketing debt could cause families to lose up to $11,000 on their income every year. That’s enough to send the kids to a state college or move to a nicer neighborhood.

3. Fewer jobs and lower salaries.

High government spending with no accountability eliminates opportunities for career advancement, paralyzes job creation, and lowers wages and salaries.

4. Higher interest rates.

Some families and businesses won’t be able to borrow money because of high interest rates on mortgages, car loans, and more – the dream of starting a business could be out of reach.

5. High debt and high spending won’t help the economy.

Journalists should check with both sides before committing pen to paper, especially those at respectable outlets like The Washington Post and The New York Times. A $17 trillion debt only hurts the economy.

6. What economic growth?

High-debt economies similar to America’s current state grew by one-third less  than their low-debt counterparts.

7. Eventually, someone has to pay the nation’s $17 trillion credit card bill, and Washington has nominated your family.

It’s wildly irresponsible to never reduce expenses, yet Washington continues to spend, refusing to acknowledge the repercussions.

>>>Watch this video to see how scary $17 trillion really is for your family.

8. Jeopardizes the stability of Medicare, Social Security, and Medicaid.

Millions of people depend on Medicare, Medicaid, and Social Security, but these programs are also the main drivers of the growing debt. Congress has yet to take the steps needed to make these programs affordable and sustainable to preserve benefits for those who need them the most.

9. Washington collects a lot, and then spends a ton. Where are your tax dollars going?

In 2012, Washington collected $2.4 trillion in taxes—more than $20,000 per household. But it wasn’t enough for Washington’s spending habits. The federal government actually spent $3.5 trillion.

>>> Reality check: See where your tax dollars really went.

10. Young people face a diminished future.

College students from all over the country got together in February at a “Millennial Meetup” to talk about how the national debt impacts their generation.

>>>Shorter version: They’re not happy. Watch now.

11. Without cutting spending and reducing the debt, big-government corruption and special interests only get bigger.

The national debt is an uphill battle in a city where politicians too often refuse to relinquish power, to the detriment of America.

12. Harmful effects are permanent.

Astronomical debt lowers incomes and well-being permanently, not just temporarily. A one-time major increase in government debt is typically a permanent addition, and the dragging effects on the economy are long-lasting.

13. The biggest threat to U.S. security.

Even President Obama’s former Chairman of the Joint Chiefs of Staff thinks so:

Mullen_450

SHARE this graphic.

14. Makes us more vulnerable to the next economic crisis.

According to the Congressional Budget Office’s 2012 Long-Term Budget Outlook, “growing federal debt also would increase the probability of a sudden fiscal crisis.”

15. Washington racked up $300 billion in more debt in less than four months.

Our nation is on a dangerous fiscal course, and it’s time for lawmakers to steer us out of the coming debt storm.

16. High debt makes America weaker.

Even Britain’s Liam Fox warns America: Fix the debt problem now, or suffer the consequences of less power on the world stage.

17. High debt crowds out the valuable functions of government.

By disregarding the limits on government in the Constitution, Congress thwarts the foundation of our freedoms.

Read the Morning Bell and more en español every day at Heritage Libertad.

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Each American’s Share of National Debt Is Growing

Each American’s Share of National Debt Is Growing Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute. As Washington continues to spend more than it can afford, future generations of taxpayers will be on the hook for increasing levels […]

“Feedback Friday” Letter to White House generated form letter response (on spending and national debt) May 9, 2012 (part 6)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on May 9, 2012. I don’t know which letter of mine generated this response so I have […]

How can the Federal Reserve buy trillions dollars of our national debt without any money?

Uploaded by PBS on Jan 4, 2008 Thousands of media outlets descended on Iowa, erecting a powerful wall of TV cameras and reporters between the voters and candidates. Bill Moyers talks with Ron Paul who knows well the power of the press to set expectations and transform the agenda. ____________________________ We should not be running […]

An open letter to President Obama (Part 58) “Our national debt threatens our security”

Liam Fox Issues a Warning to America Uploaded by HeritageFoundation on Feb 28, 2012 Britain’s Liam Fox has a warning for America: Fix the debt problem now or suffer the consequences of less power on the world stage. The former U.K. secretary of state for defense visited Heritage to explain why the America’s debt is […]

USA’s biggest defense problem is our national debt

Liam Fox Issues a Warning to America Uploaded by HeritageFoundation on Feb 28, 2012 Britain’s Liam Fox has a warning for America: Fix the debt problem now or suffer the consequences of less power on the world stage. The former U.K. secretary of state for defense visited Heritage to explain why the America’s debt is […]

Each American’s Share of National Debt Is Growing

Each American’s Share of National Debt Is Growing Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute. As Washington continues to spend more than it can afford, future generations of taxpayers will be on the hook for increasing levels […]

Incoming House Oversight Chairman: ‘Imperative’ to Stop Omnibus Spending Bill

Rob Bluey  @RobertBluey / December 21, 2022

James Comer in a grey suit in front of an American flag

Rep. James Comer, R-Ky., the incoming chairman of the House Oversight and Reform Committee, is urging his Senate counterparts to reject the $1.85 trillion omnibus spending bill in order to strengthen GOP’s oversight authority for the next Congress.

Comer will ascend to chairman of the powerful House committee Jan. 3 with a range of investigations planned. Before he’s even able to get started, however, Senate Republicans who support the omnibus spending bill could strip Comer of important leverage—the power of the purse.

With 20 Republican senators already votingTuesday on a procedural motion to advance the bill, Senate Majority Leader Chuck Schumer, D-N.Y., appears to have enough GOP support to get the bill done this week.

That hasn’t stopped Comer and other House Republicans from warning about the consequences.

“It’s imperative that we stop the massive omnibusso that Republicans can use our majority power next Congress to conduct oversight of the federal government, hold the Biden Administration accountable, and enact good government reforms,” Comer told The Daily Signal in a statement.

Withholding money from the Biden administration is one tool House Republicans can use to exercise effective oversight—particularly if federal agencies and government officials are uncooperative or not forthcoming with information in the new year.

“The primary method that Congress can use to hold federal agencies accountable is via appropriations,” said Paul Winfree, former budget policy director for President Donald Trump and a distinguished fellow at The Heritage Foundation. “They should not be appropriating until they’ve figured out just how to use their oversight powers.” (The Daily Signal is the multimedia news organization of The Heritage Foundation.)

Passage of the omnibus spending bill would insulate the Biden administration from a spending fight for the next year. The bill making its way through the Senate funds the president’s agenda from through Sept. 30, 2023.

>>> No Surprise: Republicans Won’t Hold Biden Accountable

Comer was first elected to Congress in 2016 and served as ranking member on the House Oversight and Reform Committee while Democrats had the majority. He’ll ascend to the top spot once the 118th Congress starts in less than two weeks.

He’s among a vocal group of House Republicans who are warning about implications of passing the massive spending bill during the current lame-duck Congress rather than waiting until next year when Republicans have control of the House.

“It’s no surprise that Democrats are racing to use their waning days of power to force through trillions of dollars in new spending and a host of bad policies that will weaken our country,” Comer told The Daily Signal. “Democrats’ unhinged, inflation-inducing spending binge over the last two years caused 40-year high inflation that’s harming the pocketbooks of Americans and has allowed rampant government waste.”

In addition to Comer, 13 House Republicans are promising to oppose and stymie the legislative priorities of any Republican senator who votes in favor of the omnibus spending bill this week. They have the support of likely incoming House Speaker Kevin McCarthy, R-Calif., as well.

>>> Warning Shot: House Conservatives Threaten Revenge If GOP Senators Vote for Pelosi-Schumer Spending Bill

Schumer already has the support of Senate Minority Leader Mitch McConnell, R-Ky., and Sens. Richard Shelby, R-Ala., vice chairman of the Senate Appropriations Committee. They were among the 20 Senate Republicans who voted to move forward on the bill Tuesday.

Earlier this year, House Republicans outlined an ambitious oversight agenda. It includes an investigation of Homeland Security Alejandro Mayorkas’ failures leading to the border crisis, the government’s collusion with Big Tech to censor speech, the origins of COVID-19, Hunter Biden’s corrupt business dealings, the disastrous withdrawal from Afghanistan, politicization of the FBI, the administration’s promotion of critical race theory, and many other topics.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Remember to include the url or headline of the article plus your name and town and/or state.

A.F. Branco for Oct 21, 2021

 

Incoming House Oversight Chairman: ‘Imperative’ to Stop Omnibus Spending Bill

James Comer in a grey suit in front of an American flag

“It’s imperative that we stop the massive omnibus so that Republicans can use our majority power next Congress to conduct oversight of the federal government, hold the Biden Administration accountable, and enact good government reforms,” Rep. James Comer, incoming chairman of the House Oversight and Reform Committee, said in a statement. (Photo by Anna Moneymaker/Getty Images)

Rep. James Comer, R-Ky., the incoming chairman of the House Oversight and Reform Committee, is urging his Senate counterparts to reject the $1.85 trillion omnibus spending bill in order to strengthen GOP’s oversight authority for the next Congress.

Comer will ascend to chairman of the powerful House committee Jan. 3 with a range of investigations planned. Before he’s even able to get started, however, Senate Republicans who support the omnibus spending bill could strip Comer of important leverage—the power of the purse.

With 20 Republican senators already votingTuesday on a procedural motion to advance the bill, Senate Majority Leader Chuck Schumer, D-N.Y., appears to have enough GOP support to get the bill done this week.

That hasn’t stopped Comer and other House Republicans from warning about the consequences.

 

“It’s imperative that we stop the massive omnibusso that Republicans can use our majority power next Congress to conduct oversight of the federal government, hold the Biden Administration accountable, and enact good government reforms,” Comer told The Daily Signal in a statement.

Withholding money from the Biden administration is one tool House Republicans can use to exercise effective oversight—particularly if federal agencies and government officials are uncooperative or not forthcoming with information in the new year.

“The primary method that Congress can use to hold federal agencies accountable is via appropriations,” said Paul Winfree, former budget policy director for President Donald Trump and a distinguished fellow at The Heritage Foundation. “They should not be appropriating until they’ve figured out just how to use their oversight powers.” (The Daily Signal is the multimedia news organization of The Heritage Foundation.)

Passage of the omnibus spending bill would insulate the Biden administration from a spending fight for the next year. The bill making its way through the Senate funds the president’s agenda from through Sept. 30, 2023.

>>> No Surprise: Republicans Won’t Hold Biden Accountable

Comer was first elected to Congress in 2016 and served as ranking member on the House Oversight and Reform Committee while Democrats had the majority. He’ll ascend to the top spot once the 118th Congress starts in less than two weeks.

He’s among a vocal group of House Republicans who are warning about implications of passing the massive spending bill during the current lame-duck Congress rather than waiting until next year when Republicans have control of the House.

“It’s no surprise that Democrats are racing to use their waning days of power to force through trillions of dollars in new spending and a host of bad policies that will weaken our country,” Comer told The Daily Signal. “Democrats’ unhinged, inflation-inducing spending binge over the last two years caused 40-year high inflation that’s harming the pocketbooks of Americans and has allowed rampant government waste.”

In addition to Comer, 13 House Republicans are promising to oppose and stymie the legislative priorities of any Republican senator who votes in favor of the omnibus spending bill this week. They have the support of likely incoming House Speaker Kevin McCarthy, R-Calif., as well.

>>> Warning Shot: House Conservatives Threaten Revenge If GOP Senators Vote for Pelosi-Schumer Spending Bill

Schumer already has the support of Senate Minority Leader Mitch McConnell, R-Ky., and Sens. Richard Shelby, R-Ala., vice chairman of the Senate Appropriations Committee. They were among the 20 Senate Republicans who voted to move forward on the bill Tuesday.

Earlier this year, House Republicans outlined an ambitious oversight agenda. It includes an investigation of Homeland Security Alejandro Mayorkas’ failures leading to the border crisis, the government’s collusion with Big Tech to censor speech, the origins of COVID-19, Hunter Biden’s corrupt business dealings, the disastrous withdrawal from Afghanistan, politicization of the FBI, the administration’s promotion of critical race theory, and many other topics.

By voting for the $1.7 trillion spending bill, Senate Republicans would strip their House counterparts of the leverage they need on all those investigations and more by giving Biden and Democrats exactly what they want—money to continue on, unaffected, for another year.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Remember to include the url or headline of the article plus your name and town and/or state.


March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

 

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

 

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]

Dan Mitchell: The Conservative Party is unwilling to do anything to restrain spending on the NHS (or any other part of the UK budget), which is why their main role nowadays is to be the tax collectors for the welfare state!

A.F. Branco for Oct 21, 2021

 

 

In Five Sentences, Everything You Need to Know about Bureaucracy

One thing that became very apparent during the pandemic is that government schools are mostly run for the benefit of bureaucrats rather than students.

Not that any of us should have been surprised.

The same is true for other government bureaucracies, as well as parts of the private sector where there is a lot of government intervention that subsidizes featherbedding.

What’s especially galling is when budget increases are used to hire more bureaucrats, yet taxpayers get nothing of value in exchanges.

That’s certainly the case in the United States, where education bureaucracies (and education spending) have dramatically increased, yet there has been no concomitant increase in educational outcomes.

Another examples come from the United Kingdom where the government-run National Health Service gets more money and more bureaucrats every year, as explained in CapX by Fiona Bulmer, yet there’s never an improvement in health outcomes.

Indeed, these five sentences are a perfect example of government bureaucracies in action.

…the NHS in England employs the full time equivalent of 1.2 million people, nearly 200,000 more than they did in 2012.

…in 2021, the NHS was around 16% less productive than before the pandemic.

…one of the managers lamented to me that he could schedule a maximum of four knee operations a day but in the private sector they manage eight a day. 

…7m people on NHS waiting lists.

The NHS, like all organisations where users have no choice defaults to accommodating the providers not the consumers.

I’m left with two conclusions after reading those depressing numbers.

The obvious takeaway, as I’ve previously noted, is that if you don’t want massive future tax increases, there’s no alternative to what critics call “free-market fundamentalism.”


March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

 

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

 

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]

Dan Mitchell: The Case for Gridlock

 

The Case for Gridlock

My views on gridlock were fully captured in the title of a 2015 column, which stated that divided government was “Better than the Alternative of Expanding Government.”

And I followed up with a 2020 column that showed that spending restraint was more likely when the two parties were forced to share power.

To be sure, divided government also can produce very bad results (the country suffered a big expansion in the burden of government during the Nixon years, for instance).

But J.D. Tuccille from Reason explains why Americans should feel happy about gridlock starting in 2023.

…the election results stand as an expression of overwhelming lack of confidence in the major parties, with a resulting breather for the country resulting from the split decision’s ensuing, and quite welcome, gridlock. …The Wall Street Journal‘s Brody Mullins and John D. McKinnon noted last week. “…Washington overall isn’t expected to do much for the next two years.”That’s good news for Americans baffled by Democrats’ insistence on treating the U.S. economy as something between a laboratory experiment and a toy train set, with lawmakers indulging their whims through serial rounds of life-altering policy moves. …Republicans didn’t exactly convince the country that they were the cavalry riding to the rescue. Their main selling point seems to have been that they weren’t Democrats. …gridlock, with all of its faults and instability, is what we have, and we should be thankful for that. …gridlock can give us a bit of a national breather, and that may be the best we can hope for from a destructive political system.

Amen. I’m in favor of more breathing room for the economy’s productive sector. That’s when we get better outcomes.

But there are two reasons why gridlock is not a long-run solution.

First, Tuccille points out that we now have presidents claiming autocratic powers.

The gridlock…isn’t total. The increasingly autocratic nature of the presidency allows enormous room for the nation’s chief executive to act unilaterally. Through executive orders and memoranda, presidents enact policy changes that should go through Congress (if they’re permissible at all) in a manner befitting elective monarchs. The only real check on that power is the willingness of the courts to remind the country that, while rule-by-decree is a form of government, it’s not one permitted by the Constitution.

Second, we have very serious problems (an awful tax system, runaway entitlement spending, the administrative state, etc) that can only be solved by legislative action.

I’ll close with a depressing observation about what to expect from politics. Simply stated, politicians generally have incentives to maximize their short-run status, not to maximize the nation’s long-run health.

So, whether we have gridlock or not, it’s not easy to be optimistic.

Unless, of course, we can figure out ways to reincarnate the very rare Republican and very rare Democrat who did the right thing.

Until and unless that happens, I want politicians to be “unproductive.”

 

 


Open letter to President Obama (Part 584)

(Emailed to White House on 6-10-13.)

President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

The federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation. We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. The recent scandals in our government have proved my point. In fact, the jokes you made at Ohio State about possibly auditing them are not so funny now that reality shows how the IRS was acting more like a monster out of control. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

______________________

If you blame the Sequester for blaming job growth then you don’t have a good grasp on economics.

When the monthly job numbers are released, most people focus on the unemployment rate.

On many occasions, I’ve cited that number, usually to point out that the unemployment rate is far higher than the Obama Administration promised it would be if the so-called stimulus was enacted.

That episode should be additional proof that Keynesian economics is misguided.

But that’s not the issue we should be worrying about now. Instead, our concern should be what appears to be a permanent reduction in the share of the working-age population that is employed.

As I explain in this interview for Blaze TV, our ability to produce is governed by the quality and quantity of labor and capital in the economy. Unfortunately, it appears that the Bush-Obama policies of bigger government have had a negative impact.

To build upon that interview, here are the very latest numbers from the Bureau of Labor Statistics.

To be fair, the drop you see on the chart started before Obama took office. But he can be fairly blamed for the fact that there’s been no recovery.

Obama Jobs Legacy

The moral of the story is that bigger government is not a recipe for prosperity.

The burden of government spending is too high, the tax code is too punitive, red tape is hindering entrepreneurship, and various handouts are creating a dependency culture that discourages work.

Should we be surprised that the employment-population ratio is grim?

___________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

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Dan Mitchell: “Looking at reforms at the state level, the past two years have produced very good news on education policy and tax policy!”

The Correct Rate for a State Income Tax Is Zero

Looking at reforms at the state level, the past two years have produced very good news on education policy and tax policy.

Regarding the latter, many states have lowered tax rates and several of them have junked so-called progressive tax systems and replaced them with simple and fair flat taxes.

But I’m greedy for even bigger improvements.

I want to see some states move not just to Column 2 in my ranking of state tax policy. I want them to be in Column 1.

And that means they need to get rid of income taxes.

The good news is that some states are having that discussion.

Here are some excerpts from an Associated Pressreport from Mississippi, written by Michael Goldberg.

Mississippi Gov. Tate Reeves promised to push for a full elimination of the state’s income tax during the 2023 legislative session. The move would make Mississippi the 10th state with no income tax. …Mississippi’s Republican-controlled legislature passed legislation in 2022 that will eliminate the state’s 4% income tax bracketstarting in 2023. In the following three years, the 5% bracket will be reduced to 4%. …Supporters of the 2022 Mississippi tax cut said it would spur economic growth and attract new residents to Mississippi. …Republican House speaker Philip Gunn has said full elimination of the state income tax is “achievable,” though he hasn’t committed to doing so in the 2023 session. …Tax-cut proposals are a direct effort to compete with states that don’t tax earnings, including Texas, Florida and Tennessee.

And here are portions of an article in National Review about Colorado, authored by Ben Murrey, which also notes that the TABOR spending limit will need to be strengthened if lawmakers are serious about getting rid of the state’s income tax.

When an interviewer recently asked Colorado’s Democratic governor Jared Polis what the state’s income-tax rate should be, he answered without hesitation: “It should be zero.” …The effort to chisel away at the income tax has already gained steam in the state.Last year, voters reduced the tax with Proposition 116 — a ballot initiative that brought the rate from 4.63 percent to 4.55 percent. …Eliminating the tax would provide an enormous direct windfall to Colorado households. …every reduction in income tax will allow Coloradans to keep more of every dollar they earn, and it invites more jobs and opportunities for residents. …To eliminate the income tax entirely, the state would probably need to begin lowering the revenue limit along with the rate reductions in the future. …these two reforms would put the state on a road to zero.

By the way, Colorado voters once again just cut the state’s flat tax in a referendum earlier this month.

Would Mississippi and Colorado be doing the right thing if they joined the zero-income-tax club?

Yes. I cited some evidence on this issue about 10 years ago.

Here’s some updated analysis from Chris Edwards.

The nine states without an individual income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. …What they have in common is providing needed state‐​local services to their residents without complex, anti‐​freedom, and anti‐​growth individual income taxes. Most of the nine run leaner and more efficient governments than most other states. They only partly make up for the income tax revenue gap with other revenues. In terms of overall tax burdens, eight of the nine states are toward the bottom of the 50 states and Washington is in the middle. …Total taxes in the seven states average 8.1 percent of income. The average in the 40 other states is 9.6 percent. Thus, the lack of individual income tax restrains the overall tax burden. …Repealing state individual income taxes is a good goal. …Residents get the state‐​local services they need, but at lower cost.

Here’s the chart that accompanied Chris’ article. He separates Alaska and Wyoming because they get so much money from energy taxes and are not realistic role models for other states.

The bottom line is that states without an income tax tend to have smaller government.

This is especially true for Florida, Tennessee, South Dakota, and New Hampshire. And Texas may join those states now that it has strengthened its spending cap.

One should-be-obvious conclusion from this data is that states with no income taxes should not make the mistake of adopting that punitive levy. Unless, of course, they want to repeat Connecticut’s unhappy experience.

Illinois and Fiscal Suicide, Part I

I wrote a couple of days ago about California’s grim future.

But now I’ll share some good news. No matter how bad California gets, the Golden State probably won’t have to worry about people and businesses fleeing to Illinois.

That’s because the Prairie State is an even bigger mess. If California is committing “slow motion suicide,” Illinois is opting for the quickest-possible fiscal demise.

Politicians in Springfield (the Illinois capital) have a love affair with higher taxes. A very passionate love affair.

But the state’s productive people have a different point of view. More and more of them have been escaping.

And they are now being joined by the state’s most-famous company, as Matt Paprocki of the Illinois Policy Institute explains in a column for the Washington Post.

When Boeing announced last month that it was moving its headquarters from Chicago to Arlington, Va., it sent shudders through the Illinois business community and state capital.But last week, when the heavy-equipment manufacturer Caterpillar said it was moving its headquarters to Texas, it felt more like a bulldozer ramming into the news. …If you’re an Illinois business owner or resident, as I am, the economics of staying are tough and the enticements to move away are many. …According to the U.S. Census Bureau, last year the state had the third-largest loss of residents due to domestic migration in the nation (-122,460), trailing only California and New York.

It’s easy to understand why people and businesses are leaving.

In 2017, Illinois lawmakers raised the personal income tax rate to 4.95 percent, from 3.75 percent, and hiked the corporate rate to 7 percent, from 5.25 percent. When J.B. Pritzker took office as governor in 2019, he passed another 24 tax and fee hikes costing taxpayers over $5 billion. …With 278,475 regulatory restrictions and requirements — double the national average — Illinois has the third most heavily regulated environment in the country. …Illinois owes over $139 billion in state pension debt as of last year, and local governments owe about $75 billion, which is the primary driver for Illinois’ spiraling property taxes, second-highest in the nation.

Mr. Paprocki offers all sorts of suggestions for reform, including a spending cap.

But the chances of pro-growth reform are effectively zero. The governor is a hard-core leftist (as well as a hypocrite) and the state legislature is controlled by government employee unions.

So if you’re hoping for a TABOR-style spending cap, there’s little reason to be optimistic.

And if you’re hoping for reforms that will improve the state’s “least friendly” tax climate, don’t hold your breath.

California is the Greece of the USA, but Texas is not perfect either!!!

Texas is in much better shape than California. Taxes are lower, in part because Texas has no state income tax.

No wonder the Lone Star State is growing faster and creating more jobs.

And the gap will soon get even wider since California voters recently decided to drive away more productive people by raising top tax rates.

But a key challenge for all governments is controlling the size and cost of bureaucracies.

Government employees are probably overpaid in both states, but the situation is worse in California, as I discuss in this interview with John Stossel.

Dan Mitchell Comparing Excessive Bureaucrat Compensation in Texas and California

But being better than California is not exactly a ringing endorsement of Texas fiscal policy.

A column in today’s Wall Street Journal, written by the state’s Comptroller of Public Accounts, points out some worrisome signs.

As the chief financial officer of the nation’s second-largest state, even I have found it hard to get a handle on how much governments are spending, and how much debt they’re taking on. Every level of government is piling up incredible bills. And they’re coming due, whether we like it or not. Even in low-tax Texas, property taxes have risen three times faster than the inflation rate and four times faster than our population growth since 1992. Our local governments, meanwhile, more than doubled their debt load in the last decade, to more than $7,500 in debt for every man, woman and child in the state. In Houston alone, city-employee pension plans are facing an unfunded liability of $2.4 billion. But too many taxpayers aren’t given the information they need to make informed decisions when they vote debt issues. Recently I spent several months holding about 40 town-hall meetings with Texans across our state. Each time, I asked the attendees if they could tell me how much debt their local governments are carrying. Not a single person in a single town had this information.

In other words, taxpayers need to be eternally vigilant, regardless of where they live. Otherwise the corrupt rectangle of politicians, bureaucrats, lobbyists, and interest groups will figure out hidden ways of using the political process to obtain unearned wealth.

P.S. The second-most-viewed post on this blog is this joke about Texas, California, and a coyote, so it must be at least somewhat amusing. If you want some Texas-specific humor, this police exam is amusing and you’ll enjoy this joke about the difference between Texans, liberals and conservatives. And if you want California-specific humor, this Chuck Asay cartoon hits the nail on the head.