Category Archives: spending out of control

46 Republican Senators Vow Not to Help Democrats Raise the Debt Ceiling (HERE WE GO AGAIN!!!!)

I have written before about those heroes of mine that have resisted raising the debt ceiling but in the end I have always been disappointed and here we go again!

But first let me give you a taste of something I wrote about 10 years ago on this same issue!

Why don’t the Republicans  just vote no on the next increase to the debt ceiling limit. I have praised over and over and overthe 66 House Republicans that voted no on that before. If they did not raise the debt ceiling then we would have a balanced budget instantly.  I agree that the Tea Party has made a difference and I have personally posted 49 posts on my blog on different Tea Party heroes of mine.

What would happen if the debt ceiling was not increased? Yes President Obama would probably cancel White House tours and he would try to stop mail service or something else to get on our nerves but that is what the Republicans need to do.

I have written and emailed Senator Pryor over, and over again with spending cut suggestions but he has ignored all of these good ideas in favor of keeping the printing presses going as we plunge our future generations further in debt. I am convinced if he does not change his liberal voting record that he will no longer be our senator in 2014.

I have written hundreds of letters and emails to President Obama and I must say that I have been impressed that he has had the White House staff answer so many of my letters. The White House answered concerning Social Security (two times), Green Technologies, welfare, small businesses, Obamacare (twice),  federal overspending, expanding unemployment benefits to 99 weeks,  gun control, national debt, abortion, jumpstarting the economy, and various other  issues.   However, his policies have not changed, and by the way the White House after answering over 50 of my letters before November of 2012 has not answered one since.   President Obama is committed to cutting nothing from the budget that I can tell.

 I have praised over and over and over the 66 House Republicans that voted no on that before. If they did not raise the debt ceiling then we would have a balanced budget instantly.  I agree that the Tea Party has made a difference and I have personally posted 49 posts on my blog on different Tea Party heroes of mine.

46 Republican Senators Vow Not to Help Democrats Raise the Debt Ceiling

All but four Republican senators have signed a pledge that they will not vote to raise the debt ceiling, sending another warning to Democrats that they are on their own on the pressing issue.

Sen. Ron Johnson (R-WI) circulated a letter during the chamber’s vote-a-rama on the $3.5 trillion budget resolution Wednesday, signing up a majority of his fellow Republicans in an effort to link the Democrats’ proposed spending package with the statutory debt limit imposed on the federal government by Congress, which covers spending that has already been approved and must be paid by the U.S. Treasury.

In the letter, which is addressed to “Our Fellow Americans,” the Republican signatories claim that Democrats are responsible for increased federal spending and so must be responsible for raising the debt limit. “We will not vote to increase the debt ceiling, whether that increase comes through a stand-alone bill, a continuing resolution, or any other vehicle,” the letter says. “Democrats, at any time, have the power through reconciliation to unilaterally raise the debt ceiling, and they should not be allowed to pretend otherwise.”

The Republicans who didn’t sign the letter are Sens. Susan Collins of Maine, John Kennedy of Louisiana, Lisa Murkowski of Alaska and Richard Shelby of Alabama.

Why now: A two-year suspension of the debt ceiling expired at the end of July, forcing the U.S. Treasury to begin taking “extraordinary measures” to keep paying its bills as it waits for Congress to either raise or suspend the limit before the country is forced to default. Democrats opted not to include an increase in the debt ceiling in their budget resolution, which would have made it possible to raise the limit without Republican support, though they still have the option of revising the resolution to include such a provision.

What Democrats say: Democrats point out that much of the increased debt in recent years was produced during former President Trump’s administration. “I cannot believe that Republicans would let the country default,” Senate Majority Leader Chuck Schumer (D-NY) said Wednesday. “It has always been bipartisan to deal with the debt ceiling. When Trump was president I believe the Democrats joined with him to raise it three times.”

President Biden told reporters Wednesday that trillions in debt were added “on the Republicans’ watch” but said he was confident that the GOP would act in time. “They are not going to let us default,” he said.

The bottom line: No one expects Congress to allow the U.S. to default, but it looks like we could be in for a high-stakes game of chicken in the coming weeks — and the markets are starting to notice. According to Reuters Wednesday, “Some U.S. Treasury bill yields are beginning to reflect concerns that lawmakers may wait until the last minute to increase or suspend the debt ceiling.”

Like what you’re reading? Sign up for our free newsletter.


Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 37)

This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.

Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the  debt limit “a sugar-coated satan sandwich.”

“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.

August 1, 2011

Rep. Harris Votes Against the Debt Ceiling “Deal” 

Washington, DC – Today, Rep. Andy Harris voted against the debt ceiling increase. The plan did not require passage of a balanced budget amendment, which Rep. Harris feels is essential to bringing permanent common sense accountability to Washington.

“A balanced budget amendment is the only way to make sure the federal government spends what it takes in and lives within its means,” said Rep. Andy Harris.  “Over the past few weeks I have repeatedly voted for reasonable proposals to raise the debt ceiling that included passage of a balanced budget amendment. But I didn’t come to Washington to continue writing blank checks. Maryland’s families and job creators sent me to Congress to permanently change the way Washington does business.  I appreciate Speaker Boehner’s remarkable, historic efforts to craft a proposal to solve the debt ceiling issue.  But today’s debt ceiling deal just doesn’t go far enough to build an environment for job creation by requiring passage of a balanced budget amendment to bring permanent common sense accountability to Washington.”

Currently, the U.S. Government has a national debt of $14.3 trillion and runs an annual deficit of $1.65 trillion.

Joe Manchin “Why I Won’t Support Spending Another $3.5 Trillion” BUT WILL HE GIVE IN TO PRESSURE FROM DEMOCRATIC LEADERSHIP?

I personally think there is about a 80% chance ultimately Joe Manchin will support some kind of compromise bill the Democrats come up with, but I do like a lot of what he is saying now:

Why I Won’t Support Spending Another $3.5 Trillion

Amid inflation, debt and the inevitability of future crises, Congress needs to take a strategic pause.

PHOTO: GETTY IMAGES

The nation faces an unprecedented array of challenges and will inevitably encounter additional crises in the future. Yet some in Congress have a strange belief there is an infinite supply of money to deal with any current or future crisis, and that spending trillions upon trillions will have no negative consequence for the future. I disagree.

An overheating economy has imposed a costly “inflation tax” on every middle- and working-class American. At $28.7 trillion and growing, the nation’s debt has reached record levels. Over the past 18 months, we’ve spent more than $5 trillion responding to the coronavirus pandemic. Now Democratic congressional leaders propose to pass the largest single spending bill in history with no regard to rising inflation, crippling debt or the inevitability of future crises. Ignoring the fiscal consequences of our policy choices will create a disastrous future for the next generation of Americans.

Those who believe such concerns are overstated should ask themselves: What do we do if the pandemic gets worse under the next viral mutation? What do we do if there is a financial crisis like the one that led to the Great Recession? What if we face a terrorist attack or major international conflict? How will America respond to such crises if we needlessly spend trillions of dollars today?

Instead of rushing to spend trillions on new government programs and additional stimulus funding, Congress should hit a strategic pause on the budget-reconciliation legislation. A pause is warranted because it will provide more clarity on the trajectory of the pandemic, and it will allow us to determine whether inflation is transitory or not. While some have suggested this reconciliation legislation must be passed now, I believe that making budgetary decisions under artificial political deadlines never leads to good policy or sound decisions. I have always said if I can’t explain it, I can’t vote for it, and I can’t explain why my Democratic colleagues are rushing to spend $3.5 trillion.

Another reason to pause: We must allow for a complete reporting and analysis of the implications a multitrillion-dollar bill will have for this generation and the next. Such a strategic pause will allow every member of Congress to use the transparent committee process to debate: What should we fund, and what can we simply not afford?

I, for one, won’t support a $3.5 trillion bill, or anywhere near that level of additional spending, without greater clarity about why Congress chooses to ignore the serious effects inflation and debt have on existing government programs. This is even more important now as the Social Security and Medicare Trustees have sounded the alarmthat these life-saving programs will be insolvent and benefits could start to be reduced as soon as 2026 for Medicare and 2033, a year earlier than previously projected, for Social Security.

Establishing an artificial $3.5 trillion spending number and then reverse-engineering the partisan social priorities that should be funded isn’t how you make good policy. Undoubtedly some will argue that bold social-policy action must be taken now. While I share the belief that we should help those who need it the most, we must also be honest about the present economic reality.

Inflation continues to rise and is bleeding the value of Americans’ wages and income. More than 10.1 million jobs remain open. Our economy, as the Biden administration has correctly pointed out, has reached record levels of quarterly growth. This positive economic reality makes clear that the purpose of the proposed $3.5 trillion in new spending isn’t to solve urgent problems, but to re-envision America’s social policies. While my fellow Democrats will disagree, I believe that spending trillions more dollars not only ignores present economic reality, but makes it certain that America will be fiscally weakened when it faces a future recession or national emergency.

In 2017, my Republican friends used the privileged legislative procedure of budget reconciliation to rush through a partisan tax bill that added more than $1 trillion to the national debt and put investors ahead of workers. Then, Democrats rightfully criticized this budgetary tactic. Now, my Democratic friends want to use this same budgetary tactic to push through sweeping legislation to make “historic investments.” Respectfully, it was wrong when the Republicans did it, and it is wrong now. If we want to invest in America, a goal I support, then let’s take the time to get it right and determine what is absolutely necessary.

Many in Washington have convinced themselves we can add trillions of dollars more to our nearly $29 trillion national debt with no repercussions. Regardless of political party, elected leaders are sent to Washington to make tough decisions and not simply go along to get along.

For those who will dismiss my unwillingness to support a $3.5 trillion bill as political posturing, I hope they heed the powerful words of Adm. Mike Mullen, a former chairman of the Joint Chiefs of Staff, who called debt the biggest threat to national security. His comments echoed the fear and concern I’ve heard from many economic experts I’ve personally met with.

At a time of intense political and policy divisions, it would serve us well to remember that members of Congress swear allegiance to this nation and fidelity to its Constitution, not to a political party. By placing a strategic pause on this budgetary proposal, by significantly reducing the size of any possible reconciliation bill to only what America can afford and needs to spend, we can and will build a better and stronger nation for all our families.

Mr. Manchin, a Democrat, is a U.S. senator from West Virginia.

Free To Choose – Milton Friedman on The Welfare System (1978) | Thomas S…

National Debt Set to Skyrocket

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.

In the past, wars and the Great Depression contributed to rapid but temporary increases in the national debt. Over the next few decades, runaway spending on MedicareMedicaid, and Social Security will drive the debt to unsustainable levels.

PERCENTAGE OF GDP

Download

National Debt Set to Skyrocket

Source: Heritage Foundation calculations based on data from the U.S. Department of the Treasury, Institute for the Measurement of Worth, Congressional Budget Office, and White House Office of Management and Budget.

Chart 20 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

    The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More

  • Authors

    Emily GoffResearch Assistant
    Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
    Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor

MUSIC MONDAY Comparing Rolling Stones’ Song HANG FIRE to the Way People in USA are reacting to President Biden increasing Unemployment Benefits!

Rolling Stones – Hang Fire LIVE East Rutherford, New Jersey ’81

Comparing Rolling Stones’ Song HANG FIRE to the Way People in USA are reacting to President Biden increasing Unemployment  Benefits!

https://youtu.be/3xbtlW16Gts

Dan Henninger also opined for the WSJ. Here’s some of what he wrote.

By making unemployment insurance competitive with market wage rates in a pandemic, the Biden Democrats may have done long-term damage to the American work ethic. …The welfare reforms of the 1990s were based on the realization that transfer payments undermined the work ethic. The Biden-Sanders Democrats are dropping that work requirement for recipients of cash payments.

https://youtu.be/o-u81UnQ16Q

Reminds me of a Rolling Stones song HANG FIRE in which peoples’ desires are to sit around and be lazy and dream about winning a lot at the casino! Check out these lyrics:

In the sweet old country where I come from
Nobody ever works
Yeah nothing gets done

We hang fire, we hang fire
You know marrying money is a full time job
I don’t need the aggravation
I’m a lazy slob

I hang fire, I hang fire
Hang fire, put it on the wire baby
Hang fire, hang fire put it on the wire baby, go ahead
Hang fire
We’ve got nothing to eat
We got nowhere to work
Nothing to drink
We just lost our shirts
I’m on the dole
We ain’t for hire
Say what the hell
Say what the hell, hang fire
Hang fire, hang fire, hang fire, put it on the wire, baby
Hang fire, hang fire, hang fire, hang fire
Hang fire, hang fire, put it on the wire, baby
Doo doo doo
Doo doo doo
Doo doo doo
Doo doo
Doo doo doo
Doo doo doo
Doo doo doo
Doo doo, hang fire, hang fire, hang fire
Doo doo doo
Doo doo doo
Doo doo doo, hang fire, hang fire, put it on the wire, baby
Doo doo
Doo doo doo
Doo doo doo
Doo doo doo
Doo doo
Yeah ten thousand dollars, go have some fun
Put it all on at a hundred to one

Hang fire, hang fire, hang fire, put it on the wire, baby
Doo doo
Doo doo, hang fire, hang fire put it on the wire
Hang fire, hang fire, hang fire, hang fire
Put it on the wire, baby
Put it on the wire

 

Subsidized Unemployment and the Work Ethic

I wrote two days ago about subsidized unemployment, followed later in the day by this interview.

https://youtu.be/cXfXpgVAefE

This controversy raises a fundamental economic issue.

I explained in the interview that employers only hire people when they expect a new worker will generate at least enough revenue to cover the cost of employment.

There’s a similar calculation on the part of individuals, as shown by this satirical cartoon strip.

People decide to take jobs when they expect the additional after-tax income they earn will compensate them for the loss of leisure and/or the unpleasantness of working.

Which is why many people are now choosing not to work since the government has increased the subsidies for idleness (a bad policy that began under Trump).

The Wall Street Journal editorialized about this issue a couple of days ago.

White House economists say there’s no “measurable” evidence that the $300 federal unemployment bonus is discouraging unemployed people from seeking work. They were rebutted by Tuesday’s Bureau of Labor Statistics’ Jolts survey, which showed a record 8.1 million job openings in March.…But these jobs often pay less than what most workers could make on unemployment. That explains why the number of job openings in many industries increased more than the number of new hires in March. …The number of workers who quit their jobs also grew by 125,000. …some quitters may be leaving their jobs because they figure they can make more unemployed for the next six months after Democrats extended the bonus into September.

Dan Henninger also opined on the issue for the WSJ. Here’s some of what he wrote.

President Biden said, “People will come back to work if they’re paid a decent wage.” But what if he’s wrong? What if his $300 unemployment insurance bonus on top of the checks sent directly to millions of people (which began during the Trump presidency) turns out to be a big, long-term mistake? …Mr. Biden and the left expect these outlays effectively to raise the minimum wage by forcing employers to compete with Uncle Sam’s money. …Ideas have consequences. By making unemployment insurance competitive with market wage rates in a pandemic, the Biden Democrats may have done long-term damage to the American work ethic. …The welfare reforms of the 1990s were based on the realization that transfer payments undermined the work ethic. The Biden-Sanders Democrats are dropping that work requirement for recipients of cash payments.

Amen.

I made similar arguments about the erosion of the work ethic last year when discussing this issue.

And this concern applies to other forms of redistribution. Including, most notably, the foolish idea of big per-child handouts.

P.S. The WSJ editorial cited above mentioned the Labor Department’s JOLT data. Those numbers are also useful if you want proof that federal bureaucrats are overpaid, and you’ll also see that the same thing is true for state and local government employees.

The Upside-Down Morality and Economic Illiteracy of Class Warfare

My Eighth Theorem of Government is very simple.

If someone writes and talks about poverty, I generally assume that they care about poor people. They may have good ideas for helping the poor, or they may have bad ideas. But I usually don’t doubt their sincerity.

But when someone writes and talks about inequality, I worry that they don’t really care about the less fortunate and that they’re instead motivated by envy, resentment, and jealousy of rich people.

And this concern probably applies to a couple of law professors, Michael Heller of Columbia and James Salzman of UCLA. They recently wrote a column for the Washington Post on how the government should grab more money from the private sector when rich people die.

They seem particularly agitated that states such as South Dakota have strong asset-protection laws that limit the reach of the death tax.

Income inequality has widened. One…way to tackle the problem. Instead of focusing only on taxing wealth accumulation, we can address the hidden flip side — wealth transmission. …The place to start is South Dakota… The state has created…wealth-sheltering tools including the aptly named “dynasty trust.” …Congress can…plug holes in our leaky estate tax system. One step would be to tax trusts at the passage of each generation and limit generation-skipping tax-exempt trusts. A bigger step would be to ensure that appreciated stocks…are taxed… Better still, let’s start anew. Ditch the existing estate tax and replace it with an inheritance tax

There’s nothing remarkable in their proposals. Just a typical collection of tax-the-rich schemes one might expect from a couple of academics.

But I can’t resist commenting on their article because of two inadvertent admissions.

First, we have a passage that reveals a twisted sense of morality. They apparently think it’s a “heist” if people keep their own money.

America’s ultra-wealthy have pulled off a brilliantly designed heist, with a string of South Dakota governors as accomplices.

For all intents and purposes, the law professors are making an amazing claim that it’s stealing if you don’t meekly surrender your money to politicians.

Apparently they agree with Richard Murphy that all income belongs to the government and it’s akin to an entitlement program or “state aid” if politicians let you keep a slice.

Second, the law professors make the mistake of trying to be economists. They want readers to think the national economy suffers if money stays in the private sector.

Nearly no one in South Dakota complains, because the harm falls on the national economy… We all suffer high and hidden costs…getting less in government services. …South Dakota locks away resources that could spark entrepreneurial innovation.

According to their analysis, a nation such as Singapore must be very poor while a country such as Greece must be very rich.

Needless to say, the opposite is true. Larger burdens of government spending are associated with less prosperity and dynamism.

I’ll offer one final observation. Professors Heller and Salzman obviously want more and more taxes on the rich.

But I wonder what they would say if confronted with the data showing that the United States already collects a greater share of tax revenue from the rich than any other OECD country.

P.S. The reason the U.S. collects proportionately more taxes from the rich is that other developed countries have bigger welfare states, and that necessarily leads to much higher tax burdens on lower-income and middle-class taxpayers (as honest folks on the left acknowledge).


Milton Friedman’s Free to Choose – Ep.4 (1/7) – From Cradle to Grave

File:President Ronald Reagan and Nancy Reagan in The East Room Congratulating Milton Friedman Receiving The Presidential Medal of Freedom.jpg

January 21, 2021

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

Dear Mr. President,

With the national debt increasing faster than ever we must make the hard decisions to balance the budget now. If we wait another decade to balance the budget then we will surely risk our economic collapse.

The first step is to remove all welfare programs and replace them with the negative income tax program that Milton Friedman first suggested.

Milton Friedman points out that though many government welfare programs are well intentioned, they tend to have pernicious side effects. In Dr. Friedman’s view, perhaps the most serious shortcoming of governmental welfare activities is their tendency to strip away individual independence and dignity. This is because bureaucrats in welfare agencies are placed in positions of tremendous power over welfare recipients, exercising great influence over their lives. In addition, welfare programs tend to be self-perpetuating because they destroy work incentives. Dr. Friedman suggests a negative income tax as a way of helping the poor. The government would pay money to people falling below a certain income level. As they obtained jobs and earned money, they would continue to receive some payments from the government until their outside income reached a certain ceiling. This system would make people better off who sought work and earned income.

Here is a transcript of a portion of the “Free to Choose” program called “From Cradle to Grave” (program #4 in the 10 part series):

Transcript:
Friedman: After the 2nd World War, New York City authorities retained rent control supposedly to help their poorer citizens. The intentions were good. This in the Bronx was one result.
By the 50′s the same authorities were taxing their citizens. Including those who lived in the Bronx and other devastated areas beyond the East River to subsidize public housing. Another idea with good intentions yet poor people are paying for this, subsidized apartments for the well-to-do. When government at city or federal level spends our money to help us, strange things happen.
The idea that government had to protect us came to be accepted during the terrible years of the Depression. Capitalism was said to have failed. And politicians were looking for a new approach.
Franklin Delano Roosevelt was a candidate for the presidency. He was governor of New York State. At the governor’s mansion in Albany, he met repeatedly with friends and colleagues to try to find some way out of the Depression. The problems of the day were to be solved by government action and government spending. The measures that FDR and his associates discussed here derived from a long line of past experience. Some of the roots of these measures go back to Bismark’s Germany at the end of the 19th Century. The first modern state to institute old age pensions and other similar measures on the part of government. In the early 20th Century Great Britain followed suit under Lloyd George and Churchill. It too instituted old age pensions and similar plans.
These precursors of the modern welfare state had little effect on practice in the United States. But they did have a very great effect on the intellectuals on the campus like those who gathered here with FDR. The people who met here had little personal experience of the horrors of the Depression but they were confident that they had the solution. In their long discussions as they sat around this fireplace trying to design programs to meet the problems raised by the worst Depression in the history of the United States, they quite naturally drew upon the ideas that were prevalent at the time. The intellectual climate had become one in which it was taken for granted that government had to play a major role in solving the problems in providing what came later to be called Security from Cradle to Grave.
Roosevelt’s first priority after his election was to deal with massive unemployment. A Public Works program was started. The government financed projects to build highways, bridges and dams. The National Recovery Administration was set up to revitalize industry. Roosevelt wanted to see America move into a new era. The Social Security Act was passed and other measures followed. Unemployment benefits, welfare payments, distribution of surplus food. With these measures, of course, came rules, regulations and red tape as familiar today as they were novel then. The government bureaucracy began to grow and it’s been growing ever since.
This is just a small part of the Social Security empire today. Their headquarters in Baltimore has 16 rooms this size. All these people are dispensing our money with the best possible intentions. But at what cost?
In the 50 years since the Albany meetings, we have given government more and more control over our lives and our income. In New York State alone, these government buildings house 11,000 bureaucrats. Administering government programs that cost New York taxpayers 22 billion dollars. At the federal level, the Department of Health, Education and Welfare alone has a budget larger than any government in the world except only Russia and the United States.
Yet these government measures often do not help the people they are supposed to. Richard Brown’s daughter, Helema, needs constant medical attention. She has a throat defect and has to be connected to a breathing machine so that she’ll survive the nights. It’s expensive treatment and you might expect the family to qualify for a Medicaid grant.
Richard Brown: No, I don’t get it, cause I’m not eligible for it. I make a few dollars too much and the salary that I make I can’t afford to really live and to save anything is out of the question. And I mean, I live, we live from payday to payday. I mean literally from payday to payday.
Friedman: His struggle isn’t made any easier by the fact that Mr. Brown knows that if he gave up his job as an orderly at the Harlem Hospital, he would qualify for a government handout. And he’d be better off financially.
Hospital Worker: Mr. Brown, do me a favor please? There is a section patient.
Friedman: It’s a terrible pressure on him. But he is proud of the work that he does here and he’s strong enough to resist the pressure.
Richard Brown: I’m Mr. Brown. Your fully dilated and I’m here to take you to the delivery. Try not to push, please. We want to have a nice sterile delivery.
Friedman: Mr. Brown has found out the hard way that welfare programs destroy an individual’s independence.
Richard Brown: We’ve considered welfare. We went to see, to apply for welfare but, we were told that we were only eligible for $5.00 a month. And, to receive this $5.00 we would have to cash in our son’s savings bonds. And that’s not even worth it. I don’t believe in something for nothing anyway.
Mrs. Brown: I think a lot of people are capable of working and are willing to work, but it’s just the way it is set up. It, the mother and the children are better off if the husband isn’t working or if the husband isn’t there. And this breaks up so many poor families.
Friedman: One of the saddest things is that many of the children whose parents are on welfare will in their turn end up in the welfare trap when they grow up. In this public housing project in the Bronx, New York, 3/4′s of the families are now receiving welfare payments.
Well Mr. Brown wanted to keep away from this kind of thing for a very good reason. The people who get on welfare lose their human independence and feeling of dignity. They become subject to the dictates and whims of their welfare supervisor who can tell them whether they can live here or there, whether they may put in a telephone, what they may do with their lives. They are treated like children, not like responsible adults and they are trapped in the system. Maybe a job comes up which looks better than welfare but they are afraid to take it because if they lose it after a few months it maybe six months or nine months before they can get back onto welfare. And as a result, this becomes a self-perpetuating cycle rather than simply a temporary state of affairs.
Things have gone even further elsewhere. This is a huge mistake. A public housing project in Manchester, England.
Well we’re 3,000 miles away from the Bronx here but you’d never know it just by looking around. It looks as if we are at the same place. It’s the same kind of flats, the same kind of massive housing units, decrepit even though they were only built 7 or 8 years ago. Vandalism, graffiti, the same feeling about the place. Of people who don’t have a great deal of drive and energy because somebody else is taking care of their day to day needs because the state has deprived them of an incentive to find jobs to become responsible people to be the real support for themselves and their families.
_______________

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

Related posts:

Washington is lecturing us about eating too much when they are spending addicts!!!!

Washington is lecturing us about eating too much when they are spending addicts!!!! Let’s Fix the Real Obesity Problem in Washington May 11, 2013 by Dan Mitchell Whenever someone proposes that we need more intervention from the federal government, I always go to the Constitution and check Article I, Section VIII. This is because I’m old fashioned and […]

Dan Mitchell of the Cato Institute:HUD has to go!!!! (includes political cartoon)

You want a suggestion on how to cut the government then start at HUD. I would prefer to eliminate all of it. Here are Dan Mitchell’s thoughts below: Sequestration’s Impact on HUD: Just 358 More Days and Mission Accomplished March 12, 2013 by Dan Mitchell As part of my “Question of the Week” series, I had […]

Coldplay the documentary with pictures and videos (Part 6 )

Coldplay Max Masters – Part 7 of 7 Chris Martin revealed in his interview with Howard Stern that he was rasied an evangelical Christian but he has left the church. I believe that many words that he puts in his songs today are generated from the deep seated Christian beliefs from his childhood that find […]

Open letter to President Obama (Part 138 B)

Real Time with Bill Maher March 16 2012 – Alexandra Pelosi Interviews Welfare Recipients in NYC Published on Mar 18, 2012 by vclubscenedotcom Real Time with Bill Maher March 16 2012 – Alexandra Pelosi Interviews Welfare Recipients __________ President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I […]

Are conservatives generous or are liberals?

Real Time with Bill Maher March 16 2012 – Alexandra Pelosi Interviews Welfare Recipients in NYC Published on Mar 18, 2012 by vclubscenedotcom Real Time with Bill Maher March 16 2012 – Alexandra Pelosi Interviews Welfare Recipients __________ Liberals like the idea of the welfare state while conservatives suggest charity through private organizations serve the […]

Democrats lied about spending cuts in 1982 and 1990

Washington Could Learn a Lot from a Drug Addict What kind of intervention does Congress need to get it to spend with its spending addiction? Back in 1982 Reagan was promised $3 in cuts for every $1 in tax increases but the cuts never came. In 1990 Bush was promised 2 for 1 but they […]

Transcript and video of Republican Debate June 13, 2011 New Hampshire (Part 4)

Republican Presidential Debate In New Hampshire pt.4 Rep. Ron Paul, R-Texas gestures as he answers a question as former Massachusetts Gov. Mitt Romney, left, and former Minnesota Gov. Tim Pawlenty, listen during the first New Hampshire Republican presidential debate at St. Anselm College in Manchester, N.H., Monday, June 13, 2011. (AP Photo/Jim Cole) KING: Welcome […]

Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 1) (Al Green, Famous Arkansan)

  Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below: Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so (at 4:04 pm CST on April 7th, 2011, and will continue to do so in the […]

Six great economic crossroads of the 20th and 21st centuries examined by Michael Reagan

I found this article very interesting. The Kennedy-Reagan Truth vs. the Obama Delusion by Jim Denney In his book The New Reagan Revolution, Michael Reagan examined six great economic crossroads of the 20th and 21st centuries. These six critical junctures in the history of the United States serve as economic laboratories to test two contrasting economic […]

Dumas:Lowering Capital Gains Tax Bad Idea

HALT:HaltingArkansasLiberalswithTruth.com This video clip gives 6 reasons why the Capital Gains Tax should be abolished Ernest Dumas in his article “Tax work not wealth,” (Arkansas Times, Nov 25, 2010) asserts, “The (capital gains) tax rate was raised in 1976 under President Gerald Ford and economic growth accelerated. President Jimmy Carter cut the top rate from 39 […]

By Everette Hatcher III | Posted in Arkansas Times, Cato Institute, Ernest Dumas, Taxes | Edit |

On Climate Policy, the D.C. Circuit Rendered the 117th Congress Irrelevant (Unless the Supreme Court Acts)


Congressional Democrats have included a “clean electricity standard“—basically, a green energy production quota—as part of a proposed multi‐​trillion dollar spending package for “infrastructure.“ Under a clean electricity standard (CES), utilities would be required to switch fuels from coal and natural gas to climate‐​friendly sources. Compliant utilities would receive subsidies; non‐​compliant utilities would get fined.

There are, however, two big roadblocks. The first is procedural. To avoid the filibuster, congressional Democrats are using a process known as reconciliation to pass the partisan $3.5 trillion spending measure. But to be part of reconciliation, a legislative proposal must relate to budgeting or spending, and it’s unclear whether a CES shares such a nexus with Congress’s power of the purse.

The second roadblock is West Virginia Senator Joe Manchin. He’s the majority’s 50th vote in the Senate, but he represents a coal‐​mining state that voted for Trump by 40 points in 2020. Any Democrat‐​only spending package will be only as green as Sen. Manchin allows, which isn’t very green at all. So that bodes poorly for the legislative prospects of a meaningful CES policy.

For these reasons, a clean electricity standard faces an uphill climb to become law. But if Congress doesn’t act, then the Biden administration is prepared to go it alone. Bloomberg’s Jennifer Dlouhy reports:

Congress should enact a clean‐​electricity standard that forces utilities to pare greenhouse gas emissions, but if lawmakers fail to deliver, the administration is prepared to act on its own, President Joe Biden’s climate chief told Bloomberg. …

“I don’t want to say that anything is a red line, because, frankly, a lot of the work that went into the bipartisan infrastructure plan was really building a tremendous foundation for us to grow on,” McCarthy said. “We have lots of regulatory authority that we intend to use regardless, and we will move forward with those efforts to try to tackle the climate crisis.” …

McCarthy stressed the importance of Congress advancing an array of climate policies — including longer‐​lasting and more‐​effective renewable tax credits that complement a utility‐​focused mandate. Expanded tax incentives “just means we have businesses ready,” McCarthy said. “What the clean‐​electricity standard says is ‘Go — don’t wait, go — because we are going to put you on a schedule that says you get out of the gate and run, and you keep running.”

“Without that, there’s going to have be a regulatory strategy to move that forward,” McCarthy said, “and I think we all can agree that a clean‐​electricity standard can actually be that motivator out of the gate that will allow us to get the kind of impacts at scale that we really need to have now.” (formatting added)

Got that? America’s climate czar says the executive branch can unilaterally impose a (Soviet‐​suitable) green energy production quota.

Alas, there is (for now) a judicial basis to support McCarthy’s sweeping assertion of executive power. In fact, her claims are rooted directly in a recent decision handed down by the D.C. Circuit only days before Biden took office. In that case, American Lung Association v. EPA, the D.C. Circuit found “ample discretion” in the “gaps” of the Clean Air Act to authorize a nationwide cap‐​and‐​trade for the electricity grid—even though the 111th Congress already had rejected this same policy.

On its face, the D.C. Circuit’s decision contravenes common sense. After all, how is it that a regulatory agency—based on its existing ambiguous authority—can achieve the same policy that Congress refused? The American Lung Association decision further contravenes guidance from the Supreme Court, which has previously warned the EPA against basing “major” climate policy on an uncertain statutory foundation.

Importantly, the D.C. Circuit’s decision is not the final word on the matter, at least not yet. Various states and companies have sought Supreme Court review of the D.C. Circuit’s legal reasoning. Last week, the Cato Institute filed a brief in support of the petitioners, urging the Court to take the case and rein in the EPA. If the Court declines to review the D.C. Circuit’s flawed decision, then the Biden administration would have a green light to pursue climate policy that is indistinguishable from failed legislation.

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.

In 2010, the U.S. spent more on interest on the national debt than it spent on many federal departments, including Education and Veterans Affairs.

BILLIONS OF DOLLARS (2010)

Download

In One Year, Spending on Interest on the National Debt Is Greater Than Funding for Most Programs

Source: White House Office of Management and Budget.

Chart 29 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

    The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More

  • Authors

    Emily GoffResearch Assistant
    Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
    Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor

FRIEDMAN FRIDAY “For years, a lot of us subscribed to the notion that Milton Friedman warned us about,” that government would harm the economy if it didn’t take a light-touch approach to business, said former Connecticut Democratic Sen. Chris Dodd, a longtime Biden friend, referring to the economist who helped define the small-government neoliberal philosophy.

President Biden in the White House on March 18.

President Biden in the White House on March 18.ANDREW HARNIK/ASSOCIATED PRESS

Behind Biden’s Big Plans: Belief That Government Can Drive Growth

Multitrillion-dollar spending program would reverse Reagan-era tacit understanding that public sector is less efficient than the private in allocating resources

WASHINGTON—President Biden envisions long-term federal spending claiming its biggest share of the American economy in decades. He wants to pay for that program in part by charging the highest-earning Americans the biggest tax rates they’ve faced in years.

The Biden economic team’s ambitions go beyond size to scope. The centerpiece of their program—a multitrillion-dollar proposal to be rolled out starting Wednesday, less than a month after a $1.9 trillion stimulus—seeks to give Washington a new commercial role in matters ranging from charging stations for electric vehicles to child care, and more responsibility for underwriting education, incomes and higher-paying jobs.

The administration has also laid the groundwork for regulations aimed at empowering labor unions, restricting big businesses from dominating their markets and prodding banks to lend more to minorities and less for fossil-fuel projects. All while federal debt is currently at a level not seen since World War II.

It all marks a major turning point for economic policy. The gamble underlying the agenda is a belief that government can be a primary driver for growth. It’s an attempt to recalibrate assumptions that have shaped economic policy of both parties since the 1980s: that the public sector is inherently less efficient than the private, and bureaucrats should generally defer to markets.

The administration’s sweeping plans reflect a calculation that “the risk of doing too little outweighs the risk of doing too much,” said White House National Economic Council Director Brian Deese. “We’re going to be unapologetic about that,” he said. “Government must be a powerful force for good in the lives of Americans.”

The pandemic and lockdown measures that followed have become a Rorschach test for the new economic debate. Former President Donald Trumpargued that the booming economy of 2019 and early 2020 was proof his tax-cutting, deregulating agenda was the best for spurring broadly shared prosperity, and he portrayed the coronavirus and lockdowns as a temporary disruption. The Biden team sees the pandemic as exposing myriad flaws and fragilities that liberals had long identified in the economy, masked by prosperity.

Mr. Biden himself casts his program as a throwback to Lyndon B. Johnson’s 1960s Great Society and Franklin D. Roosevelt’s 1930s New Deal. “This is the first time we’ve been able to, since the Johnson administration and maybe even before that, to begin to change the paradigm,” he said at a White House event in mid-March. Mr. Biden recently spoke with a group of prominent American historians, and his aides have studied FDR’s presidency as they plan his economic agenda.

Mr. Biden’s big plans raise big questions, and big risks. He faces an uphill battle to win over a narrowly divided Congress, with solid Republican opposition plus hesitancy among Democratic moderates who blanch at higher taxes and more spending following nearly $5 trillion in coronavirus relief outlays over the past year.

Conservative-tilting courts, increasingly skeptical of executive authority, might block some of his initiatives. Already, a coalition of Republican state attorneys general has sued to challenge some provisions of the stimulus program and some of his executive orders.

Some economists consider the latest spending plan an overkill response to the temporary, albeit severe, hit from the pandemic and lockdowns. They call recent stirrings in the bond market a warning that the vast increase in government spending and borrowing might prompt a return to the high-inflation/high-interest-rate stagnation of the late 1970s and early 1980s—conditions that fed the long-lasting backlash to expansive FDR-LBJ policies in the first place.

“They’re creating too much demand when it’s not needed. When demand runs away from supply, you get inflation,” said Kevin Hassett, a former Trump chief economic adviser now at Stanford University’s Hoover Institution. “The laws of economics can’t be repealed,” he said.

The Biden agenda rests on the notion those laws have evolved. “There appear to have been a broad-based set of structural changes that have had a very significant effect on how the economy works,” Treasury Secretary Janet Yellen said. “There are a lot of ways in which I think our understanding of the economy has shifted.”

<img class=”i-amphtml-blurry-placeholder” src=”data:;base64,

She cited persistently low interest rates and low inflation, defying many conventional forecasts, as reasons to feel more relaxed than before about federal borrowing and low unemployment rates. Ms. Yellen says there’s little sign inflation is in danger of escalating, and is confident that if it does, the Federal Reserve has the tools to contain it.

The administration’s policies are rooted in economic research focused on perceived free-market flaws, much of it conducted and funded by young, left-leaning economists and activists now scattered throughout the administration. Much of the Biden economic agenda is built around the conclusion that climate change in particular is a private-sector breakdown requiring extensive government intervention.

Before joining the Biden Council of Economic Advisers, Heather Boushey ran the Washington Center for Equitable Growth, a think tank devoted to persuading economists and policy makers to take action reducing income inequality. To her and many of her colleagues, the pandemic validates their studies on market failures.

“We’ve talked about inequality—it seems like an abstract concept, but in 2020, this notion of the K-shaped economy became so real,” Ms. Boushey said. She was referring to a recovery where the fortunes of upper-income families—able to keep their jobs, work from home and enjoy gains in their stock portfolios—rose like the letter’s upward-sloping part, while lower-income families were unable to keep jobs in hard-hit service industries such as restaurants.

Plans for selling the administration proposals lean heavily on fears of losing out to China’s model of state-driven capitalism, a concern that resonates across the political spectrum. “China is out-investing us by a long shot, because their plan is to own that future,” Mr. Biden said recently in previewing his program.

In a Wednesday speech in Pittsburgh, the president is preparing to unveil the first part of an economic proposal that would cost $3 trillion or more over 10 years and might be split into multiple pieces of legislation, with more coming in April. The first measure will focus on infrastructure, climate change, domestic manufacturing and research and development. Mr. Biden will find ways to pay for the full cost of the first measure, the White House has said. The second measure will center on child care, healthcare and education.

‘There are a lot of ways in which I think our understanding of the economy has shifted,’ said Treasury Secretary Janet Yellen.

‘There are a lot of ways in which I think our understanding of the economy has shifted,’ said Treasury Secretary Janet Yellen.

PHOTO: DREW ANGERER/GETTY IMAGES

The multipart package would include higher taxes on corporations, upper-income households and investors. It will call for huge investments in infrastructure and climate programs and provide for universal prekindergarten and tuition-free community college, people familiar with the plan said.

Most Republicans are expected to oppose it, and the president’s advisers are already discussing options for continuing to move some of his proposals without GOP support, including through the process known as budget reconciliation.

Mike Donilon, one of Mr. Biden’s closest advisers, acknowledged the challenges but argued the public supports action. “I don’t think the country is in much mood for relentless obstructionism,” he said.

Critics of big-government projects have long argued that bureaucrats are less skilled than market forces in allocating resources. “What they’re trying to do is re-establish government as a major positive force in the economy, and I believe government is a massive negative force” in it, said Stephen Moore, a former Trump economic adviser. “There really is a micromanagement of the economy from the left.”

Presidents of both parties, hesitant to micromanage, have long steered away from anything smacking of an industrial policy that attempts to bolster specific industries. Biden aides are more willing to target and support certain industries such as the health and high-tech sectors. “We are committed to using the levers of government to encourage more domestic production,” Mr. Deese said.

President Biden held notes on infrastructure while speaking during a news conference in the East Room of the White House on March 25.

President Biden held notes on infrastructure while speaking during a news conference in the East Room of the White House on March 25.

PHOTO: OLIVER CONTRERAS/PRESS POOL

The president’s budget and regulatory proposals could disrupt major industries, boosting renewable-energy companies over fossil-fuel firms and expanding markets for emerging technologies. Business groups and Republicans warn that new regulations could stifle growth.

Mr. Biden’s stimulus bill added to federal debt that had already hit peacetime records under Mr. Trump. Mr. Biden has said his full agenda will ultimately be aimed at curbing government borrowing, through tax increases and savings in medical spending.

That will be a challenge. Federal debt, which reached 100% of gross domestic product last fiscal year for the first time since 1946, is expected to rise to a record 107% of economic output by 2031, according to the Congressional Budget Office, fueling concerns that future generations will get stuck with the bill. Fed Chairman Jerome Powell said in March that the federal government can manage its debt at current levels, but policy makers should seek to slow its growth once the economy is stronger.

The long-dominant paradigm Mr. Biden and aides want to change is one widely branded neoliberalism, framed by Ronald Reagan, who declared in his 1981 inaugural address that “government is not the solution to our problem; government is the problem.” He ushered in an era of tax cuts, deregulation and federal programs increasingly designed to work through market forces. That was followed by two of the longest expansions in American history, in the 1980s and the 1990s.

Ronald Reagan speaking at his inauguration on Jan. 20, 1981.

Ronald Reagan speaking at his inauguration on Jan. 20, 1981.

PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES

While Democrats controlled the White House for nearly half the time since then, their policies often were constrained by the core Reagan principles, in the view of many progressives. Bill Clinton tried to juggle liberal goals with a focus on balancing the budget, expanding free trade, and deregulating the financial sector. Barack Obama created a new government health program, but to the chagrin of the left, worked through private insurers. His 2009 program to fight the recession was constrained by fears of big deficits.

“For decades now, people have talked about economics as running against government, ignoring how much we need government to be able to build out opportunities,” said Massachusetts Democratic Sen. Elizabeth Warren, who, as an Obama adviser, often tangled with his aides over how aggressively to rein in Wall Street and support homeowners slammed by the 2008-2009 financial crisis.

A confluence of forces since the turn of the century has shaken support for the market-oriented economic model. A sharp increase in income and wealth inequality, combined with longtime wage stagnation that ended just before the pandemic hit, raised questions about how broadly prosperity gets shared absent government intervention. The swift loss of manufacturing jobs undermined support for free trade. China’s success and Wall Street’s collapse in the financial crisis further sowed doubts about free markets.

Those trends animated critics on the left, fueling the 2016 presidential campaigns of self-proclaimed Democratic Socialist Sen. Bernie Sanders of Vermont and the rise to prominence of his allies such as New York Rep. Alexandria Ocasio-Cortez.

Republicans, too, have faced internal challenges to the party’s free-market orientation. Mr. Trump won the presidency in part by attacking bipartisan support for globalization. In office, he launched a trade war with China, regularly criticized big business and intervened to force domestic investments and pressure companies to relocate manufacturing to the U.S. and cut prices of drugs.

“Some establishment Republicans are too willing to do nothing at all with government. They see an all-natural, organic market having its way,” said Missouri GOP Sen. Josh Hawley. Mr. Hawley, a Trump supporter and possible presidential contender, has called for tougher antitrust laws to break up big tech companies and co-sponsored a bill last year with Mr. Sanders to give households $1,200 direct payments.

The first-term senator voted against the latest stimulus bill and opposes many of Mr. Biden’s policies, but he also says that “old-style conservatives have been too quick to wave away policies to strengthen American workers and promote competition rather than monopolies.”

Trends such as wealth disparities and wage stagnation animated the presidential candidacy of Sen. Bernie Sanders of Vermont, seen here speaking at a rally in Manchester, N.H., in August 2015.

Trends such as wealth disparities and wage stagnation animated the presidential candidacy of Sen. Bernie Sanders of Vermont, seen here speaking at a rally in Manchester, N.H., in August 2015.

PHOTO: RICK FRIEDMAN/CORBIS/GETTY IMAGES

While many of those urging an economic rethink are relatively new voices in the debate, some pillars of the establishment have evolved, including former senior economic aides in the Clinton and George W. Bush administrations. Another Washington veteran whose positions have changed: Joe Biden.

Elected to the Senate in 1972 at age 29, Mr. Biden ousted a Republican incumbent in part by casting himself as more attuned to the needs of the middle class, a theme that became a through-line of his career. He has long espoused the importance of unions, small businesses and a strong working class.

Mr. Biden juggled those causes with a belief in the need to curb government spending and cut taxes. He voted for Mr. Reagan’s historic 1981 tax cuts and backed spending ceilings for most agencies through the 1980s and a balanced-budget constitutional amendment in the 1990s. He regularly floated the idea of limiting Social Security and Medicare.

“For years, a lot of us subscribed to the notion that Milton Friedman warned us about,” that government would harm the economy if it didn’t take a light-touch approach to business, said former Connecticut Democratic Sen. Chris Dodd, a longtime Biden friend, referring to the economist who helped define the small-government neoliberal philosophy.

As Mr. Obama’s vice president during the financial crisis, Mr. Biden walked a tightrope between pushing for spending, especially on infrastructure, and taking the lead in negotiating with Republicans to limit the extent of government expansion. Toward the end of his term, the persistently slow recovery prompted the vice president and his aides to launch a study of wage stagnation, income inequality and ways the government could steer business to do more for workers. That work planted the seeds for his current program.

Joe Biden was first elected to the Senate from Delaware in 1972 after a campaign in which he cast himself as attuned to the needs of the working class.

Joe Biden was first elected to the Senate from Delaware in 1972 after a campaign in which he cast himself as attuned to the needs of the working class.

PHOTO: HENRY GRIFFIN/ASSOCIATED PRESS

Mr. Biden started his 2019 presidential bid determined to lay out more of a big-government agenda than recent Democrats had espoused. But much of the primary field had moved even farther left. He emerged once again as the fiscal scold warning of excessive spending.

The arrival of the pandemic and the killing of George Floyd marked a turning point for Mr. Biden, according to his advisers, bringing into focus what his aides describe as his longstanding desire to “go big.”

Mr. Biden tapped his longtime friend and successor as Delaware senator, Ted Kaufman, to run the transition, and in helping assemble the economic team, Mr. Kaufman said his team focused on people steeped in new economic thinking and steered away from business executives.

“I looked at people who had internalized what Joe Biden’s policy was about, and Joe Biden’s policy was not about taking care of Wall Street or people making over $400,000 a year,” Mr. Kaufman said.

The middle ranks of the administration are filled with academics and activists who have spent the past few years honing a framework for progressive economic policy-making. In March 2019, many of them gathered at a Washington conference called “Bold v. Old.” A panel on toughening antitrust enforcement was led by Jennifer Harris, an official with the Hewlett Foundation—a philanthropy created by one of the founders of Hewlett-PackardCo. —overseeing a program funding researchers seeking to replace the neoliberal paradigm. She was joined by Lina Khan, a young law professor known for laying out the case for breaking upAmazon.com Inc., and Sabeel Rahman, president of Demos, a progressive think tank.

Ms. Harris has joined the Biden National Economic Council. Ms. Khan has been nominated to the Federal Trade Commission. Mr. Rahman works at the Office of Management and Budget.

Few of those new-generation policy makers supported Mr. Biden in the primaries. One of Mr. Deese’s deputies, Bharat Ramamurti, who was Ms. Warren’s chief campaign policy adviser, says the party is now largely unified on economic policy.

President Biden at his first press conference as president on March 25.

President Biden at his first press conference as president on March 25.

PHOTO: OLIVER CONTRERAS/PRESS POOL

A change in the Biden approach to economics is a re-evaluation of the costs of government action, which his team says have receded or always been exaggerated. And on the other side of the equation: an assertion that the cost of inaction is greater than previously estimated.

Progressive economists have generated rafts of research, often contested by conservatives, challenging the links between higher tax rates and lower economic activity. “The evidence suggests that the impact of marginal tax rates on labor supply is not as big as we may have once feared,” said Cecilia Rouse, chair of the Council of Economic Advisers.

SHARE YOUR THOUGHTS

Does the government try to do too much or not enough? Join the conversation below.

Liberal academics have produced studies examining the costs to the economy’s productive capacity from inequality and long-term unemployment, work invoked by the Biden team to justify spending big and fast to try to return to full employment as soon as next year. Some critics, including former Clinton and Obama economic adviser Lawrence Summers, have said that spending too aggressively to drive down unemployment could backfire, possibly prompting the Fed to raise interest rates and trigger a recession.

This more relaxed view of previous economic limits has freed the Biden team to plan on a grand scale. They designed a two-step strategy that began with the $1.9 trillion coronavirus relief package, which provided $1,400 direct payments to many Americans, extended a $300 weekly jobless-aid supplement, expanded the child tax credit to provide periodic payments and dropped requirements that recipients work.

That was a symbolically significant shift from the Clinton-era move to tie welfare to work and a nod to the burgeoning progressive demands for a no-strings-attached guaranteed government income floor, at least for families with children.

Biden aides are also preparing an aggressive plan of new regulations and enforcement that can be implemented without Congress.

“The president campaigned on concerns about big tech, about labor market competition, about making sure small businesses can compete with the bigger guys,” Mr. Ramamurti said. “The president has a clear agenda there.”

Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com

It appears that only a fraction of the spending proposed in a new $3 trillion to $4 trillion bill would go toward an already too-expansive definition of infrastructure. Pictured: Engineers discuss the progress of an infrastructure construction project. (Photo: Sornranison Prakittrakoon/ Moment/Getty Images)

The media were flooded Monday with news that the Biden administration is working on a colossal new $3 trillion to $4 trillion spending plan.

While full details are not available yet, the plan appears to be another left-wing grab bag of big-government proposals. Rather than stimulating the economy, it would stimulate bigger government while funneling unprecedented amounts of power and money through the hands of politicians in Washington.

All this comes on the heels of President Joe Biden signing into law on March 11 a badly flawed $1.9 trillion legislative package that was originally marketed as a COVID-19 response, but which was more focused on left-wing pet causes, such as bailouts for union pension plans and unnecessary handouts for state governments.

Just a day later, House Speaker Nancy Pelosi, D-Calif., released a statement calling for bipartisan work on legislation that would focus on infrastructure. While there were good reasons to question how beneficial or “bipartisan” such legislation would be, there was at least a chance of finding some across-the-aisle support.

Want to keep up with the 24/7 news cycle? Want to know the most important stories of the day for conservatives? Need news you can trust? Subscribe to The Daily Signal’s email newsletter. Learn more >>

But the potential for bipartisanship was quickly scuttled by news of the latest multitrillion-dollar plan.

It would be bad enough if the latest plan was just a big-spending infrastructure package. However, it appears that only a fraction of the new spending would go toward an already too-expansive definition of infrastructure.

Instead, most of the new spending and tax subsidies would go toward expanding the welfare state, including “free” tuition for community colleges, “free” child care, and other handouts that lack right-of-center support.

This would likely be the largest expansion of the federal government since the “Great Society” of the 1960s, even eclipsing Obamacare in scope.

Reports indicate that Democrats might attempt to split the plan into two bills—one focused on social spending that passes narrowly along party lines, the other focused on actual infrastructure aimed at winning bipartisan support.

However, it’s clear that the $3 trillion-plus total price tag is already souring prospects for bipartisan infrastructure legislation.

House Republicans boycotted the annual Ways and Means Committee “Member’s Day” hearing on Tuesday in the wake of news reports on the plan, since they indicated that Democrats have already made up their minds to pursue as much spending as possible through the legislative procedure known as reconciliation.

Coincidentally, two respected nonpartisan groups released reports this week that show why Biden and Pelosi should pause their aggressive agenda.

First, the Congressional Budget Office published a paper demonstrating what would happen if a sustained increase in federal spending were coupled with big tax increases to pay for the spending.

While the analysis points to different long-term effects from different types of taxes, any tax-and-spend approach would lead to reductions in economic growth and personal income that are larger than the size of the tax hikes.

For example, the analysis found that having 10% more federal government would mean a 12% to 19% reduction in personal consumption.

And that’s a conservative estimate. Most estimates show tax hikes shrink the economy by two to three times more than the revenues they raise.

That doesn’t mean Congress could escape the consequences of a continued spending spree by simply adding to the national debt. The CBO paper cautions that that would not only impose significant costs and divert resources away from the private sector, but it also would be unsustainable and increase the risk of a devastating financial crisis.

Along the same lines, the Government Accountability Office released a sobering reporton the nation’s poor financial health.

Now that Congress has passed a combined total of $6 trillion in legislation in the aftermath of the COVID-19 pandemic (more than $48,000 per household), it must quickly address the unsustainable growth of major benefit programs, such as Social Security, Medicare, and Medicaid.

Even before the pandemic struck, these programs were on a path to bankruptcy. Addressing these shortfalls in a way that is fair to both current retirees and future generations who will have to foot the bill is one of the greatest policy challenges facing the nation.

Unfortunately, Washington is exacerbating the problem by adding excessively to the national debt and potentially stunting economic growth with higher taxes.

While the Biden administration has repeatedly claimed that it will only seek to raise taxes on the wealthy, a government of the size that it’s seeking would require amounts of money that can only be generated through steep across-the-board tax increases on middle-class Americans.

Regardless of whether those taxes are levied tomorrow or in a few years, they would be an inevitable part of expanding the size and scope of the federal government.

Rather than continuing down the path of centralized power and socialism, lawmakers should recognize the costs associated with endless federal spending and chart a course toward financial responsibility and prosperity.

If they don’t, it will be the public’s duty to hold them accountable.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we will consider publishing your remarks in our regular “We Hear You” feature.

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: “There’s no reason why taxpayers across the nation should be subsidizing the cost of railway, bus, and subway travel in a handful of cities”

There Should Be No Federal Funding for Mass Transit

As a matter of sensible public policy (and well as fealty to the Constitution), the federal government should not be involved in transportation.

But since I don’t expect the current crowd in Washington has any interest in getting rid of the Department of Transportation, perhaps we should have a more modest goal of eliminating subsidies for mass transit.

After all, there’s no reason why taxpayers across the nation should be subsidizing the cost of railway, bus, and subway travel in a handful of cities.

Getting rid of these handouts would save a decent chunk of money. Here’s a chart from Downsizing Government, which shows the history of pre-pandemic spending by the Federal Transit Administration.

But that chart is now out of date since politicians have used the pandemic as an excuse to dramatically increase the burden of federal spending. Including big handouts for mass transit.

And now they want to raid taxpayers for more transit money as part of a spending spree on infrastructure.

The Wall Street Journal editorialized about this topic a couple of days ago.

Democrats are accusing Republicans of holding up the Senate infrastructure deal over funding for mass transit. Here’s what’s really going on: Republicans have bowed to most Democratic demands. But now Democrats are also insisting that they acquiesce to spending ever more to rescue broken rail and bus systems in big liberal cities. Mass transit typically receives $13 billion in federal funds each year, and Congress provided an additional $70 billion for urban transit last year in the myriad pandemic spending bills. That’s more than six times the normal transit budget and more than the annual operating and capital spending of every transit agency in the U.S. combined. …But most mass transit systems face a larger structural budget problem that pre-dated the pandemic: Ballooning operating costs from generous labor contracts and pension payments, which are siphoning off money from system improvements and repairs. Many systems have also been losing riders due to lousy service… So Democrats want Republicans to bail out those cities and their public unions. Republicans have agreed to a $48.5 billion supplemental appropriation for mass transit in the deal. But in addition Democrats are demanding that 20% of transportation spending from the highway trust fund—financed by gas tax revenues—go toward transit.

This is throwing good money after bad.

In a column for the Foundation for Economic Education back in 2019, Hans Bader explained that mass transit in an inefficient money pit.

Mass transit is largely a failure and continues to decline despite growing subsidies to many mass transit systems. Light rail systems are white elephants. …South Korea is abolishing its celebrated high-speed rail line from its capital, Seoul, to a nearby major city because it can’t cover even the marginal costs of keeping the trains running. Most people who ride trains don’t need maximum possible speed,and most of those who do will still take the plane to reach distant destinations. …most Japanese don’t take the bullet train either; they take buses because the bullet train is too expensive. Bullet trains do interfere with freight lines, so Japanese freight lines carry much less cargo than in the United States, where railroads—rather than trucks—carry most freight, thereby reducing pollution… California’s so-called bullet train is vastly behind schedule and over budget, and will likely never come close to covering its operating costs once it is built. …Just the first leg of this $77 billion project will cost billions more than budgeted. And the project is already at least 11 years behind schedule.

Government is a big reason why transit is so inefficient and expensive.

Industry expert Randal O’Toole wrote about the harmful impact of socialized systems back in 2018.

Public ownership of transit has significantly increased the cost of transit, creating another disadvantage for the transit industry relative to other modes of travel. Before 1964, transit systems in most American cities were private and profitable, albeit declining. In 1964, Congress gave cities and states incentives to take over transit systems, and within a decade nearly all had been municipalized …followed by a staggering decline in transit productivity. In the decade before 1964, transit systems carried an average of about 59,000 riders per operating employee. This plunged after 1964 and today averages fewer than 27,000 riders per employee… It is doubtful that any American industry has suffered a 54 percent decline in worker productivity over 30 years unless it was another industry taken over by the government and inflicted with all the inefficiencies associated with government control and management.

We’ll close with this chart from O’Toole’s study, which shows total taxpayer subsidies over time.

The bottom line is that government transit systems are a lot like government schools. More and more money gets spent over time with worse and worse results.

Except maybe mass transit is even worse because of absurd cost overruns.

P.S. Click here and here to learn more about the boondoggle of government-funded rail.

P.P.S. Click here to learn more about the boondoggle of government-funded subways.

TRY BORROWING AT A BANK WITH A FINANCIAL CONDITION LIKE THE USA HAS:

The problem in Washington is not lack of revenue but our lack of spending restraint. This video below makes that point. WASHINGTON IS A SPENDING ADDICT!!!

I love reading this blog by Dan Mitchell. No two people agree on everything but I sure do agree with most everything Dan writes on this blog of his. However, I disagree silently with something he has written today. I think it is encouraging that the Republicans in the House have been able to accomplish some things in slowing down the growth in spending by Obama. I know Dan would agree that more needs to be done. For instance, why don’t they just vote no on the next increase to the debt ceiling limit. I have praised over and over and over the 66 House Republicans that voted no on that before. If they did not raise the debt ceiling then we would have a balanced budget instantly.  I agree that the Tea Party has made a difference and I have personally posted 49 posts on my blog on different Tea Party heroes of mine.

What would happen if the debt ceiling was not increased? Yes President Obama would probably cancel White House tours and he would try to stop mail service or something else to get on our nerves but that is what the Republicans need to do.

I have written hundreds of letters and emails to President Obama and I must say that I have been impressed that he has had the White House staff answer so many of my letters. However, his policies have not changed, and by the way the White House after answering over 50 of my letters before November of 2012 has not answered one since.  President Obama committed to cutting nothing from the budget that I can tell. Republicans must take the next step now and vote no on the debt ceiling increase!!!

In recent months, people have asked me why I’m acting all giddy and optimistic. Am I hooked on cocaine? Have I fallen in love? Did I inherit several million dollars?

These questions started after I said the fiscal cliff was a smaller loss than I expected. Then people wondered what was going on when I wrote that we should celebrate the sequester victory. The questions got more intense when I opined that the Tea Party had made a positive difference. And people were even more nonplussed when I wrote that we should enjoy a win over the IMF.

But I’m not the only person thinking that things may be heading in the right direction.

Conn Carroll explains his optimism in the Washington Examiner. He starts by noting how bad Congress was back in 2009 and 2010.

…its liberal predecessor passed a trillion-dollar stimulus, enacted a government takeover of health care and institutionalized the power of Wall Street’s Too Big To Fail banks by passing the Dodd-Frank financial regulation law.

Then he explains that the new Tea Party Congress has changed the fiscal outlook.

…if you look at the hard numbers — if you look at the tax-and-spending trajectory that the United States was on before the 112th Congress was sworn into office, and then look at the path the U.S. is on now — you’d see that Republicans in Congress have made tremendous progress in shrinking the size and scope of the federal government.

But is there any proof?

Conn points out that the CBO “baselines” from early 2011 showed government growing very rapidly.

…the nonpartisan Congressional Budget Office released its annual Budget and Economic Outlook for fiscal years 2011 through 2021. That document showed the federal government was on track to spend…a total of almost $50 trillion ($49.8 trillion to be exact) through 2021. At the same time, tax revenues were set to rise from just 14.8 percent of GDP in 2011 to 20.8 percent in 2021.

The same estimates from early this year, by contrast, show government growing at a slower pace.

The CBO’s Budget and Economic Outlook for fiscal years 2013 through 2023 shows just how much House Republicans have actually accomplished. The federal government is now on track to spend just $46.2 trillion through 2021. That is a $3.6 trillion spending cut. And instead of taxes eating up 21 percent of the U.S. economy in 2021, now the government is set to take in just 18.9 percent.

Here are the respective baselines from those CBO publications. Let’s start by looking at how spending is projected to grow at a slower pace for the rest of the decade.

2011-2013 Spending Projections

That’s $3.5 trillion of savings. Not genuine spending cuts, of course, but it’s real progress if government doesn’t grow as fast.

Here are the revenue numbers.

2011-2013 Revenue Projections

This data basically shows that the tax burden will be much smaller than projected because about 98 percent of the Bush tax cuts were made permanent as part of the fiscal cliff deal.

And if you believe in the Starve-the-Beast theory (and you should), this will make it harder for politicians to increase the burden of government spending in the future.

Conn also notes that the unemployment rate has fallen.

Despite all of this supposedly economy-killing “austerity,” unemployment has steadily fallen, too. When Republicans took control of the House in 2011, the nation’s unemployment rate was 9 percent. Today, it has fallen to 7.7 percent.

If this seems like a familiar point, it’s because I share his assessment. I wrote back in February of last year that gridlock was a positive thing for the economy since it reduced the likelihood of new bad policies.

What’s remarkable about these developments, as Conn notes, is that folks were expecting Obama to have momentum as his second term began.

Just three months ago, many in Washington were predicting Obama would steamroll Republicans into accepting higher taxes for millions of earners, undoing the sequester and maybe even passing new stimulus spending. Instead, Republicans have stayed unified, outfoxed Obama, preserved and made permanent most of last decade’s tax cuts (including permanent indexing of the Alternative Minimum Tax) and let the sequester cuts occur on schedule. As a result, Obama’s approval ratings have tumbled, and his entire second-term agenda is in jeopardy.

The final sentence in that excerpt explains why I’m feeling semi-optimistic. Obama’s agenda of more taxes and more spending is being thwarted.

To be sure, that doesn’t mean we’re seeing good policies of tax reform and fiscal restraint. And we still face a very dour fiscal future unless entitlements are reformed.

But we’re going in the wrong direction at a slower pace, and that beats the alternative.

__________

Related posts:

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 49)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 49) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 47)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 47) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 46)

  Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 46) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 45)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 45) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 44)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 44) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 43)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 43) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 42)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 42) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 41)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 41) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 40)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 40) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 39)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 39) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 38)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 38) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 37)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 37) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 36)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 36) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 35)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 35) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 34)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 34) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 33)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 33) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 32)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 32) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 31)

Congressmen Tim Huelskamp on the debt ceiling Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 31) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 30)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 30) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 29)

 Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 29) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 28)

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 28) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 27)

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 27) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, […]

Dan Mitchell noted “politicians should only spend money to finance “public goods” that generate offsetting benefits!”

Government Spending Is a Problem, Regardless of How It Is Financed

Back in 2019, I listed “Six Principles to Guide Policy on Government Spending.”

If I was required to put it all in one sentence (sort of), here’s the most important thing to understand about fiscal policy.

This does not mean, by the way, that we should be anarcho-capitalists and oppose all government spending.

But it does mean that all government spending imposes a burden on the economy and that politicians should only spend money to finance “public goods” that generate offsetting benefits.

Assuming, of course, that the goal is greater prosperity.

I’m motivated to address this topic because Philip Klein wrote a column for National Review about Biden’s new spending. He points out that this new spending is bad, regardless of whether it is debt-financed or tax-financed.

As Democrats race toward squandering another $4.1 trillion — perhaps with some Republican help — we are being told over and over how the biggest stumbling block is figuring out how the new spending will be “paid for.” …Senator Joe Manchin (D., W.Va.), who is trying to maintain his image as a moderate, insisted that he doesn’t believe the spending should be passed if it isn’t fully financed.“Everything should be paid for,” Manchin has told reporters. …Republican members of the bipartisan group have also made similar comments. …But it is folly to consider massive amounts of new spending to be “responsible” as long as members of Congress come up with enough taxes to raise… At some point in the next few weeks, Democrats (and possibly Republicans) will announce that they have reached a deal on some sort of major spending compromise. They will claim that it is fully paid for, and assert that it is fiscally responsible. But there is nothing responsible about adding trillions in new obligations at a time when the nation is already heading for fiscal catastrophe.

Klein is correct.

Biden’s spending binge will be just as damaging to prosperity if it is financed with taxes rather than financed by debt.

The key thing to realize is that we’ll have less growth if more of the economy’s output is consumed by government spending.

Giving politicians and bureaucrats more control over the allocation of resources is a very bad idea (as even the World Bank, OECD, and IMF have admitted).

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 […]

Thomas Jefferson was right when he warned that “eternal vigilance is the price of liberty.”

Thomas Sowell Exposes Dishonest Budgetary Scare Tactics and Cartoonists Mock Obama’s Hysteria

Public finance experts are quite familiar with the budgetary shenanigans of cossetted government bureaucracies.

They even have terms to describe how agencies and departments try to manipulate outcomes by claiming that any requirement for fiscal restraint will necessitate cuts to the most politically popular parts of the budget.

  • The “fireman first principle” – Describes how local government bodies (often coordinating with local politicians) will claim that firemen will have to be laid off and/or firehouses will have to close if there is any budgetary discipline. You can replace firefighters with cops or teachers if you want. The key point is to divert attention from the countless ways that local governments waste money by focusing on the few things that voters actually care about.
  • The “Washington Monument syndrome” – Based on a real-world example during the 1970s of the National Park Service claiming it would have to shut down tourist access to popular Washington-area sites if it was subject to fiscal restraint, the modern-day equivalent is President Obama scaring people with hysterical assertions about threats to food safety and airline operations.

Thomas Sowell clearly understands this racket.

Back in my teaching days, many years ago, one of the things I liked to ask the class to consider was this: Imagine a government agency with only two tasks: (1) building statues of Benedict Arnold and (2) providing life-saving medications to children. If this agency’s budget were cut, what would it do? The answer, of course, is that it would cut back on the medications for children. Why? Because that would be what was most likely to get the budget cuts restored. If they cut back on building statues of Benedict Arnold, people might ask why they were building statues of Benedict Arnold in the first place.

Bingo. Bulls-eye. A perfect analysis of bureaucratic incentives and public-choice economics.

Sowell then describes what’s now happening in Washington.

The Obama administration is following the same pattern. The Department of Homeland Security, for example, released thousands of illegal aliens from prisons to save money — and create alarm. The Federal Aviation Administration says it is planning to cut back on the number of air traffic controllers, which would, at a minimum, create delays for airline passengers, in addition to fears for safety that can create more public alarm. …it serves Obama’s interest to maximize the damage and the public alarm, which he can direct against Republicans. President Obama has said that he would veto legislation to let him choose what to cut. That should tell us everything we need to know about the utter cynicism of this glib man.

The political cartoonists also are having a field day making fun of Obama’s silly demagoguery.

Let’s start with Michael Ramirez. You can see why he’s currently leading in the best-cartoonist poll.

Sequester Cartoon Ramirez 4

Nate Beeler also has a good contribution to the debate. The President is acting like the world is going to end because spending is going to be “slashed” by 1.2 percent, which means – gasp! – that spending will “only” grow by $2.4 trillion over the next 10 years.

Yet somehow Armageddon has not occurred.

Sequester Cartoon Beeler 4

Indeed, the worst possible outcome for Obama and the other statists is that people notice zero negative impact when spending is restrained.

This Steve Kelley cartoon is very appealing to me because it shows the President going after the sequester when the real problem is an excessive burden of government spending.

Sequester Cartoon Kelley 4

Last but not least, we have a very good Scott Stantis cartoon.

Sequester Cartoon Stantis 4

The Stantis cartoon is particularly insightful because the GOP has won the battle, but the war is not over.

As I noted yesterday, Obama will have several additional opportunities to undo the sequester savings.

Thomas Jefferson was right when he warned that “eternal vigilance is the price of liberty.”

P.S. You can enjoy more sequester cartoons here, here, and here.

Is Washington Bankrupting America?

Uploaded by on Apr 20, 2010

Be first to receive our videos and other timely info about economic policy. Subscribe at http://www.bankruptingamerica.org
————————-
According to a recent poll, 74 percent of likely voters are extremely or very concerned about the current level of government spending. And 58 percent think the level of spending is unsustainable.

Is the public right? Is Washington bankrupting America? Some facts from the video:

Spending per household has risen over 40 percent in the last 10 years and is set to do so again in the next 10 pushing debt (and interest on the debt) to unprecedented levels. But that’s just a result of PAST spending…

Our government owes $106 trillion in FUTURE spending commitments – that cannot be paid for.

We can solve it, but politicians will have to make tough choices. Increasing taxes can’t do the trick ($106 trillion is equivalent to taking all of the taxable income from every American nine times over), nor is it fair to saddle taxpayers with a problem created by government irresponsibility.

We need real spending reform. Merely returning to the spending per household levels of the 1990s would balance the budget in three years.

___________

I wish we would eliminate several departments of the federal government  and in the process get back to vision of founders. That is what the GOP Platform has done in 2012. Take a look at this article below by Dan Mitchell of the Cato Institute.

I wish the Republican Platform was binding.

Too bad it’s meaningless fluff

Why? Because the GOP, for all intents and purposes, has just proposed to eliminate the Department of Education, the Department of Housing and Urban Development, the Department of Energy, the Department of Agriculture, the Department of Transportation, the Department of Health and Human Services, along with a host of other government programs, agencies, and departments.

More specifically, they endorsed the 10th Amendment to the U.S. Constitution, which means they put themselves on record in favor of getting rid of all federal spending and intervention that is inconsistent with the Founding Fathers’ vision of a limited central government.

Here’s some of the story, as reported by The Hill,

All federal spending should be reviewed to ensure powers reserved for the states are not given to the federal government, according to the GOP platform approved Tuesday. The platform language is meant to ensure all federal spending meets the requirements of the 10th amendment, which prohibits state powers from being given to the feds. “We support the review and examination of all federal agencies to eliminate wasteful spending, operational inefficiencies, or abuse of power to determine whether they are performing functions that are better performed by the States,” the platform reads. “These functions, as appropriate, should be returned to the States in accordance with the Tenth Amendment of the United States Constitution.”

For those of you who don’t have your Cato Institute pocket Constitutions handy, here’s what the 10th Amendment says.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

In other words, the 10th Amendment is basically a back-up plan to re-emphasize that the federal government was prohibited from exercising power in any area other than what is specified in the enumerated powers section of Article I, Section VIII.

And if you look at those enumerated powers, that pretty much invalidates much of what happens in Washington.

That’s the good news. The bad news is that the Republican platform will have less impact on a potential Romney presidency than this blog.  In other words, Republicans don’t intend to live up to this promise. Heck, they don’t even know that they have such a position. That’s why I included the asterisk in the title and must draw your attention to this fine print.

*Offer not good when GOP holds power.

But I suppose it’s good that they included this language in the platform, even if it’s merely empty political rhetoric

P.S. If they did abide by the 10th Amendment, it means that Obamacare also would be repealed.

P.P.S. Yes, this implies limits on democracy. Our Founding Fathers, contrary to E.J. Dionne’s superficial analysis, were opposed to untrammeled majoritarianism and wanted to make sure 51 percent of the people couldn’t vote to rape and pillage 49 percent of the people.

In describing Biden Administration Dan Mitchell notes “During the Obama years, I shared a cartoon strip that cleverly makes the point that some people will choose not to work if they can get enough goodies from the government”

The Economics of “Labor Shortages”

During the Obama years, I shared a cartoon strip that cleverly makes the point that some people will choose not to work if they can get enough goodies from the government.

That Wizard-of-Id parody has been viewed more than 56,000 times, which suggests many readers also thought it was worth sharing.

But it obviously hasn’t been shared often enough with the crowd in Washington. Politicians have created a welfare state that penalizes work and rewards dependency.

Especially now that there are bonus payments for staying unemployed. Which makes it hard to businesses to find workers.

Our friends on the left, however, think there’s a solution to this problem.

In his column for the New York Times, David Leonhardt says there is not a labor shortage because employers can simply raise wages.

The idea that the United States suffers from a labor shortage is fast becoming conventional wisdom. But before you accept the idea, it’s worth taking a few minutes to think it through. Once you do, you may realize that the labor shortage is more myth than reality. …one of the beauties of capitalism is its mechanism for dealing with shortages.In a communist system, people must wait in long lines when there is more demand than supply for an item. That’s an actual shortage. In a capitalist economy, however, there is a ready solution. …When a company is struggling to find enough labor, it can solve the problem by offering to pay a higher price for that labor — also known as higher wages. More workers will then enter the labor market. Suddenly, the labor shortage will be no more. …Sure enough, some companies have responded to the alleged labor shortage by doing exactly this. …companies that have recently announced pay increases include Amazon, Chipotle, Costco, McDonald’s, Walmart, J.P. Morgan Chase and Sheetz convenience stores.

Leonhardt is correct that businesses can lure workers back into the job market by boosting wages. I’m glad he recognizes how the price system works.

But he completely ignores the issue of whether some jobs will simply disappear because they’re not worth the amount of money that would be required to out-compete government handouts.

That’s the key argument from the Wall Street Journal‘s editorialon the topic.

…the U.S. labor market turned in its second disappointing result in a row in May, according to Friday’s Labor Department report. That’s what happens when government pays Americans not to work. Employers created 559,000 net new jobs in the month, which sounds great until you notice that 1.5 million fewer workers in May said they were unable to work because their employer closed or lost business due to the pandemic.…The civilian labor force shrank in May by 53,000, and the number of men over age 20 who were employed fell by 8,000. …What gives? The Occam’s razor explanation is that in March the Biden Administration and Congress ladled out another mountain of cash to Americans—work not required. The extra $300 a week in enhanced jobless benefits is one problem, since millions of Americans can make more staying on the couch. …This is on top of regular jobless benefits, plus new or extended cash payments such as the $3,000 per child tax credit, additional ObamaCare subsidies, and the $1,400 checks to individuals. Again, no work required.

For all intents and purposes, politicians in DC have been undoing the great achievement of welfare reform. That 1996 law was designed to push people from idleness into employment, and it was largely successful.

But over the past couple of decades, laws like Obamacare have given people goodies without any conditionality, which has resulted in many people deciding once again that they don’t need to work.

And if Biden’s per-child handouts are made permanent, expect the problem to get even worse.

Since we started with a cartoon, let’s close with another cartoon.

This gem from Henry Payne captures the problem facing many small businesses.

Big companies have enough financial depth that they can adapt. They have considerable ability to get rid of low-skilled jobs, invest in labor-saving technologies, and even give some raises to employees they retain.

Many small businesses, however, are simply out of luck. That’s one group of victims.

The other victims are the people who get goodies from politicians. Yes, the various handouts make their lives easier in the short run, but once they get trapped in the quicksand of government dependency, it’s very difficult to escape.

P.S. Because he said some sensible things about “basic income” back in 2017, I had hoped Biden would be better on this issue. I should have known better based on his track record.


Rolling Stones – Hang Fire LIVE East Rutherford, New Jersey ’81

Comparing Rolling Stones’ Song HANG FIRE to the Way People in USA are reacting to President Biden increasing Unemployment  Benefits!

https://youtu.be/3xbtlW16Gts

Dan Henninger also opined for the WSJ. Here’s some of what he wrote.

By making unemployment insurance competitive with market wage rates in a pandemic, the Biden Democrats may have done long-term damage to the American work ethic. …The welfare reforms of the 1990s were based on the realization that transfer payments undermined the work ethic. The Biden-Sanders Democrats are dropping that work requirement for recipients of cash payments.

https://youtu.be/o-u81UnQ16Q

Reminds me of a Rolling Stones song HANG FIRE in which peoples’ desires are to sit around and be lazy and dream about winning a lot at the casino! Check out these lyrics:

In the sweet old country where I come from
Nobody ever works
Yeah nothing gets done

We hang fire, we hang fire
You know marrying money is a full time job
I don’t need the aggravation
I’m a lazy slob

I hang fire, I hang fire
Hang fire, put it on the wire baby
Hang fire, hang fire put it on the wire baby, go ahead
Hang fire
We’ve got nothing to eat
We got nowhere to work
Nothing to drink
We just lost our shirts
I’m on the dole
We ain’t for hire
Say what the hell
Say what the hell, hang fire
Hang fire, hang fire, hang fire, put it on the wire, baby
Hang fire, hang fire, hang fire, hang fire
Hang fire, hang fire, put it on the wire, baby
Doo doo doo
Doo doo doo
Doo doo doo
Doo doo
Doo doo doo
Doo doo doo
Doo doo doo
Doo doo, hang fire, hang fire, hang fire
Doo doo doo
Doo doo doo
Doo doo doo, hang fire, hang fire, put it on the wire, baby
Doo doo
Doo doo doo
Doo doo doo
Doo doo doo
Doo doo
Yeah ten thousand dollars, go have some fun
Put it all on at a hundred to one

Hang fire, hang fire, hang fire, put it on the wire, baby
Doo doo
Doo doo, hang fire, hang fire put it on the wire
Hang fire, hang fire, hang fire, hang fire
Put it on the wire, baby
Put it on the wire

 

Subsidized Unemployment and the Work Ethic

I wrote two days ago about subsidized unemployment, followed later in the day by this interview.

https://youtu.be/cXfXpgVAefE

This controversy raises a fundamental economic issue.

I explained in the interview that employers only hire people when they expect a new worker will generate at least enough revenue to cover the cost of employment.

There’s a similar calculation on the part of individuals, as shown by this satirical cartoon strip.

People decide to take jobs when they expect the additional after-tax income they earn will compensate them for the loss of leisure and/or the unpleasantness of working.

Which is why many people are now choosing not to work since the government has increased the subsidies for idleness (a bad policy that began under Trump).

The Wall Street Journal editorialized about this issue a couple of days ago.

White House economists say there’s no “measurable” evidence that the $300 federal unemployment bonus is discouraging unemployed people from seeking work. They were rebutted by Tuesday’s Bureau of Labor Statistics’ Jolts survey, which showed a record 8.1 million job openings in March.…But these jobs often pay less than what most workers could make on unemployment. That explains why the number of job openings in many industries increased more than the number of new hires in March. …The number of workers who quit their jobs also grew by 125,000. …some quitters may be leaving their jobs because they figure they can make more unemployed for the next six months after Democrats extended the bonus into September.

Dan Henninger also opined on the issue for the WSJ. Here’s some of what he wrote.

President Biden said, “People will come back to work if they’re paid a decent wage.” But what if he’s wrong? What if his $300 unemployment insurance bonus on top of the checks sent directly to millions of people (which began during the Trump presidency) turns out to be a big, long-term mistake? …Mr. Biden and the left expect these outlays effectively to raise the minimum wage by forcing employers to compete with Uncle Sam’s money. …Ideas have consequences. By making unemployment insurance competitive with market wage rates in a pandemic, the Biden Democrats may have done long-term damage to the American work ethic. …The welfare reforms of the 1990s were based on the realization that transfer payments undermined the work ethic. The Biden-Sanders Democrats are dropping that work requirement for recipients of cash payments.

Amen.

I made similar arguments about the erosion of the work ethic last year when discussing this issue.

And this concern applies to other forms of redistribution. Including, most notably, the foolish idea of big per-child handouts.

P.S. The WSJ editorial cited above mentioned the Labor Department’s JOLT data. Those numbers are also useful if you want proof that federal bureaucrats are overpaid, and you’ll also see that the same thing is true for state and local government employees.

The Upside-Down Morality and Economic Illiteracy of Class Warfare

My Eighth Theorem of Government is very simple.

If someone writes and talks about poverty, I generally assume that they care about poor people. They may have good ideas for helping the poor, or they may have bad ideas. But I usually don’t doubt their sincerity.

But when someone writes and talks about inequality, I worry that they don’t really care about the less fortunate and that they’re instead motivated by envy, resentment, and jealousy of rich people.

And this concern probably applies to a couple of law professors, Michael Heller of Columbia and James Salzman of UCLA. They recently wrote a column for the Washington Post on how the government should grab more money from the private sector when rich people die.

They seem particularly agitated that states such as South Dakota have strong asset-protection laws that limit the reach of the death tax.

Income inequality has widened. One…way to tackle the problem. Instead of focusing only on taxing wealth accumulation, we can address the hidden flip side — wealth transmission. …The place to start is South Dakota… The state has created…wealth-sheltering tools including the aptly named “dynasty trust.” …Congress can…plug holes in our leaky estate tax system. One step would be to tax trusts at the passage of each generation and limit generation-skipping tax-exempt trusts. A bigger step would be to ensure that appreciated stocks…are taxed… Better still, let’s start anew. Ditch the existing estate tax and replace it with an inheritance tax

There’s nothing remarkable in their proposals. Just a typical collection of tax-the-rich schemes one might expect from a couple of academics.

But I can’t resist commenting on their article because of two inadvertent admissions.

First, we have a passage that reveals a twisted sense of morality. They apparently think it’s a “heist” if people keep their own money.

America’s ultra-wealthy have pulled off a brilliantly designed heist, with a string of South Dakota governors as accomplices.

For all intents and purposes, the law professors are making an amazing claim that it’s stealing if you don’t meekly surrender your money to politicians.

Apparently they agree with Richard Murphy that all income belongs to the government and it’s akin to an entitlement program or “state aid” if politicians let you keep a slice.

Second, the law professors make the mistake of trying to be economists. They want readers to think the national economy suffers if money stays in the private sector.

Nearly no one in South Dakota complains, because the harm falls on the national economy… We all suffer high and hidden costs…getting less in government services. …South Dakota locks away resources that could spark entrepreneurial innovation.

According to their analysis, a nation such as Singapore must be very poor while a country such as Greece must be very rich.

Needless to say, the opposite is true. Larger burdens of government spending are associated with less prosperity and dynamism.

I’ll offer one final observation. Professors Heller and Salzman obviously want more and more taxes on the rich.

But I wonder what they would say if confronted with the data showing that the United States already collects a greater share of tax revenue from the rich than any other OECD country.

P.S. The reason the U.S. collects proportionately more taxes from the rich is that other developed countries have bigger welfare states, and that necessarily leads to much higher tax burdens on lower-income and middle-class taxpayers (as honest folks on the left acknowledge).


Milton Friedman’s Free to Choose – Ep.4 (1/7) – From Cradle to Grave

File:President Ronald Reagan and Nancy Reagan in The East Room Congratulating Milton Friedman Receiving The Presidential Medal of Freedom.jpg

January 21, 2021

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

Dear Mr. President,

With the national debt increasing faster than ever we must make the hard decisions to balance the budget now. If we wait another decade to balance the budget then we will surely risk our economic collapse.

The first step is to remove all welfare programs and replace them with the negative income tax program that Milton Friedman first suggested.

Milton Friedman points out that though many government welfare programs are well intentioned, they tend to have pernicious side effects. In Dr. Friedman’s view, perhaps the most serious shortcoming of governmental welfare activities is their tendency to strip away individual independence and dignity. This is because bureaucrats in welfare agencies are placed in positions of tremendous power over welfare recipients, exercising great influence over their lives. In addition, welfare programs tend to be self-perpetuating because they destroy work incentives. Dr. Friedman suggests a negative income tax as a way of helping the poor. The government would pay money to people falling below a certain income level. As they obtained jobs and earned money, they would continue to receive some payments from the government until their outside income reached a certain ceiling. This system would make people better off who sought work and earned income.

Here is a transcript of a portion of the “Free to Choose” program called “From Cradle to Grave” (program #4 in the 10 part series):

Transcript:
Friedman: After the 2nd World War, New York City authorities retained rent control supposedly to help their poorer citizens. The intentions were good. This in the Bronx was one result.
By the 50′s the same authorities were taxing their citizens. Including those who lived in the Bronx and other devastated areas beyond the East River to subsidize public housing. Another idea with good intentions yet poor people are paying for this, subsidized apartments for the well-to-do. When government at city or federal level spends our money to help us, strange things happen.
The idea that government had to protect us came to be accepted during the terrible years of the Depression. Capitalism was said to have failed. And politicians were looking for a new approach.
Franklin Delano Roosevelt was a candidate for the presidency. He was governor of New York State. At the governor’s mansion in Albany, he met repeatedly with friends and colleagues to try to find some way out of the Depression. The problems of the day were to be solved by government action and government spending. The measures that FDR and his associates discussed here derived from a long line of past experience. Some of the roots of these measures go back to Bismark’s Germany at the end of the 19th Century. The first modern state to institute old age pensions and other similar measures on the part of government. In the early 20th Century Great Britain followed suit under Lloyd George and Churchill. It too instituted old age pensions and similar plans.
These precursors of the modern welfare state had little effect on practice in the United States. But they did have a very great effect on the intellectuals on the campus like those who gathered here with FDR. The people who met here had little personal experience of the horrors of the Depression but they were confident that they had the solution. In their long discussions as they sat around this fireplace trying to design programs to meet the problems raised by the worst Depression in the history of the United States, they quite naturally drew upon the ideas that were prevalent at the time. The intellectual climate had become one in which it was taken for granted that government had to play a major role in solving the problems in providing what came later to be called Security from Cradle to Grave.
Roosevelt’s first priority after his election was to deal with massive unemployment. A Public Works program was started. The government financed projects to build highways, bridges and dams. The National Recovery Administration was set up to revitalize industry. Roosevelt wanted to see America move into a new era. The Social Security Act was passed and other measures followed. Unemployment benefits, welfare payments, distribution of surplus food. With these measures, of course, came rules, regulations and red tape as familiar today as they were novel then. The government bureaucracy began to grow and it’s been growing ever since.
This is just a small part of the Social Security empire today. Their headquarters in Baltimore has 16 rooms this size. All these people are dispensing our money with the best possible intentions. But at what cost?
In the 50 years since the Albany meetings, we have given government more and more control over our lives and our income. In New York State alone, these government buildings house 11,000 bureaucrats. Administering government programs that cost New York taxpayers 22 billion dollars. At the federal level, the Department of Health, Education and Welfare alone has a budget larger than any government in the world except only Russia and the United States.
Yet these government measures often do not help the people they are supposed to. Richard Brown’s daughter, Helema, needs constant medical attention. She has a throat defect and has to be connected to a breathing machine so that she’ll survive the nights. It’s expensive treatment and you might expect the family to qualify for a Medicaid grant.
Richard Brown: No, I don’t get it, cause I’m not eligible for it. I make a few dollars too much and the salary that I make I can’t afford to really live and to save anything is out of the question. And I mean, I live, we live from payday to payday. I mean literally from payday to payday.
Friedman: His struggle isn’t made any easier by the fact that Mr. Brown knows that if he gave up his job as an orderly at the Harlem Hospital, he would qualify for a government handout. And he’d be better off financially.
Hospital Worker: Mr. Brown, do me a favor please? There is a section patient.
Friedman: It’s a terrible pressure on him. But he is proud of the work that he does here and he’s strong enough to resist the pressure.
Richard Brown: I’m Mr. Brown. Your fully dilated and I’m here to take you to the delivery. Try not to push, please. We want to have a nice sterile delivery.
Friedman: Mr. Brown has found out the hard way that welfare programs destroy an individual’s independence.
Richard Brown: We’ve considered welfare. We went to see, to apply for welfare but, we were told that we were only eligible for $5.00 a month. And, to receive this $5.00 we would have to cash in our son’s savings bonds. And that’s not even worth it. I don’t believe in something for nothing anyway.
Mrs. Brown: I think a lot of people are capable of working and are willing to work, but it’s just the way it is set up. It, the mother and the children are better off if the husband isn’t working or if the husband isn’t there. And this breaks up so many poor families.
Friedman: One of the saddest things is that many of the children whose parents are on welfare will in their turn end up in the welfare trap when they grow up. In this public housing project in the Bronx, New York, 3/4′s of the families are now receiving welfare payments.
Well Mr. Brown wanted to keep away from this kind of thing for a very good reason. The people who get on welfare lose their human independence and feeling of dignity. They become subject to the dictates and whims of their welfare supervisor who can tell them whether they can live here or there, whether they may put in a telephone, what they may do with their lives. They are treated like children, not like responsible adults and they are trapped in the system. Maybe a job comes up which looks better than welfare but they are afraid to take it because if they lose it after a few months it maybe six months or nine months before they can get back onto welfare. And as a result, this becomes a self-perpetuating cycle rather than simply a temporary state of affairs.
Things have gone even further elsewhere. This is a huge mistake. A public housing project in Manchester, England.
Well we’re 3,000 miles away from the Bronx here but you’d never know it just by looking around. It looks as if we are at the same place. It’s the same kind of flats, the same kind of massive housing units, decrepit even though they were only built 7 or 8 years ago. Vandalism, graffiti, the same feeling about the place. Of people who don’t have a great deal of drive and energy because somebody else is taking care of their day to day needs because the state has deprived them of an incentive to find jobs to become responsible people to be the real support for themselves and their families.
_______________

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

Related posts:

Washington is lecturing us about eating too much when they are spending addicts!!!!

Washington is lecturing us about eating too much when they are spending addicts!!!! Let’s Fix the Real Obesity Problem in Washington May 11, 2013 by Dan Mitchell Whenever someone proposes that we need more intervention from the federal government, I always go to the Constitution and check Article I, Section VIII. This is because I’m old fashioned and […]

Dan Mitchell of the Cato Institute:HUD has to go!!!! (includes political cartoon)

You want a suggestion on how to cut the government then start at HUD. I would prefer to eliminate all of it. Here are Dan Mitchell’s thoughts below: Sequestration’s Impact on HUD: Just 358 More Days and Mission Accomplished March 12, 2013 by Dan Mitchell As part of my “Question of the Week” series, I had […]

Coldplay the documentary with pictures and videos (Part 6 )

Coldplay Max Masters – Part 7 of 7 Chris Martin revealed in his interview with Howard Stern that he was rasied an evangelical Christian but he has left the church. I believe that many words that he puts in his songs today are generated from the deep seated Christian beliefs from his childhood that find […]

Open letter to President Obama (Part 138 B)

Real Time with Bill Maher March 16 2012 – Alexandra Pelosi Interviews Welfare Recipients in NYC Published on Mar 18, 2012 by vclubscenedotcom Real Time with Bill Maher March 16 2012 – Alexandra Pelosi Interviews Welfare Recipients __________ President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I […]

Are conservatives generous or are liberals?

Real Time with Bill Maher March 16 2012 – Alexandra Pelosi Interviews Welfare Recipients in NYC Published on Mar 18, 2012 by vclubscenedotcom Real Time with Bill Maher March 16 2012 – Alexandra Pelosi Interviews Welfare Recipients __________ Liberals like the idea of the welfare state while conservatives suggest charity through private organizations serve the […]

Democrats lied about spending cuts in 1982 and 1990

Washington Could Learn a Lot from a Drug Addict What kind of intervention does Congress need to get it to spend with its spending addiction? Back in 1982 Reagan was promised $3 in cuts for every $1 in tax increases but the cuts never came. In 1990 Bush was promised 2 for 1 but they […]

Transcript and video of Republican Debate June 13, 2011 New Hampshire (Part 4)

Republican Presidential Debate In New Hampshire pt.4 Rep. Ron Paul, R-Texas gestures as he answers a question as former Massachusetts Gov. Mitt Romney, left, and former Minnesota Gov. Tim Pawlenty, listen during the first New Hampshire Republican presidential debate at St. Anselm College in Manchester, N.H., Monday, June 13, 2011. (AP Photo/Jim Cole) KING: Welcome […]

Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 1) (Al Green, Famous Arkansan)

  Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below: Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so (at 4:04 pm CST on April 7th, 2011, and will continue to do so in the […]

Six great economic crossroads of the 20th and 21st centuries examined by Michael Reagan

I found this article very interesting. The Kennedy-Reagan Truth vs. the Obama Delusion by Jim Denney In his book The New Reagan Revolution, Michael Reagan examined six great economic crossroads of the 20th and 21st centuries. These six critical junctures in the history of the United States serve as economic laboratories to test two contrasting economic […]

Dumas:Lowering Capital Gains Tax Bad Idea

HALT:HaltingArkansasLiberalswithTruth.com This video clip gives 6 reasons why the Capital Gains Tax should be abolished Ernest Dumas in his article “Tax work not wealth,” (Arkansas Times, Nov 25, 2010) asserts, “The (capital gains) tax rate was raised in 1976 under President Gerald Ford and economic growth accelerated. President Jimmy Carter cut the top rate from 39 […]

By Everette Hatcher III | Posted in Arkansas Times, Cato Institute, Ernest Dumas, Taxes | Edit |

Jennifer Graham: “The minimum wage did not increase during the eight years that Reagan was president, a term that began in 1980. That was the same year that Friedman and his wife, Rose Friedman, published a book that was so popular that it led to a PBS series and videos that are even now popular on YouTube”

<img class="i-amphtml-blurry-placeholder" src="data:;base64,

Photo illustration by Ethan Hendricks and Zoë Petersen

As Congress considers what to do about a proposed $15 minimum wage, Republican opposition to the bill can be traced to two influential voices of the past: President Ronald Reagan and Nobel Prize-winning economist Milton Friedman.

The minimum wage did not increase during the eight years that Reagan was president, a term that began in 1980. That was the same year that Friedman and his wife, Rose Friedman, published a book that was so popular that it led to a PBS series and videos that are even now popular on YouTube.

In “Free to Choose,” an examination of economics and liberty, the Friedmans wrote that minimum-wage laws require employers to discriminate against unskilled workers. That argument and others made by Friedman have informed a generation of Republicans and Libertarians who now face the challenge of defending a longstanding principle in light of growing income inequality and public sentiment that has bent toward increasing the minimum wage.

Democrats’ efforts to include the wage increase in a COVID-19 relief bill were stalled Thursday when Senate parliamentarian Elizabeth MacDonough, a nonpartisan official, ruled that it is not permissible as written, The Washington Post reported.

Utah Republican Sen. Mitt Romney is among those seeking to identify a compromise that would avert stalled legislation of the past that has left the minimum wage unchanged since 2009, when it was set at $7.25 an hour.

<img class="i-amphtml-blurry-placeholder" src="data:;base64,

Sen. Mitt Romney, R-Utah, pauses during an interview with KSL’s Doug Wright in Salt Lake City on Thursday, Feb. 6, 2020, the day after he voted to convict President Donald Trump on one impeachment count.
Laura Seitz, Deseret News

Romney, along with Sen. Tom Cotton, an Arkansas Republican, crafted a bill introduced Thursday that would gradually increase the minimum wage to $10 an hour over four years with a slower phase-in for businesses with fewer than 20 employees.

Unlike some of his fellow Republicans, who oppose a minimum wage in principle, Romney believes that legislation to increase the wage should reflect changes in the cost of living while seeking to avert negative effects, such as job loss.

“There may be philosophical debates about whether or not we should have a minimum wage, but the reality is, we’re going to have a minimum wage,” said Romney, who also pushed for smaller increases than Democrats wanted when he was governor of Massachusetts.

Republican Sen. Josh Hawley of Missouri, meanwhile, has said he would support the Democratic proposal for a $15 minimum wage, but only for employees of large companies. He has proposed a “blue-collar bonus” that would provide refundable tax credits for people making below $16.50 an hour.

Lost in much of the debate is how relatively few Americans would see an increase in pay, if the federal minimum wage is increased. According to the Bureau of Labor Statistics, in 2020, about 1.5% of hourly workers in the U.S. earned the minimum wage or less.

The history of the minimum wage begins with Franklin D. Roosevelt and the National Industrial Recovery Act of 1933, which launched a series of guaranteed wages that ranged from $12 to $15 — a week. But it’s the time period between Reagan’s inauguration and Romney’s proposal that Republican thinking on the minimum wage became more entrenched. Here’s why the minimum wage has caused so much angst for the Republican Party, and where it may be headed this year.

A minimum wage of zero?

Survey any number of conservative pundits and podcasters, and you’ll find sharp-tongued resistance to President Joe Biden’s proposal to incrementally raise the minimum wage to $15 an hour by 2025. Daily Wire commentator Matt Walsh, for example, recently wrote on Twitter that “competent adults” aren’t working for minimum wage.

Walsh and other conservative pundits argue that most people who earn minimum wage are young and unskilled, and they may not need more money (for example, if they are students still living at home) or don’t deserve more because they provide little value to their employer. That thinking is at the heart of the Friedmans’ assertion in “Free to Choose” that “the minimum wage law requires employers to discriminate against people with low skills.”

“No one describes it that way, but that is in fact what it is,” the Friedmans wrote, adding that a poorly educated teen with no work history might only be worth $2 an hour to an employer, and unless the employer is willing to throw in another 90 cents of “charity” to reach the then-minimum wage of $2.90, the teen wouldn’t have a job at all.

“It has always been a mystery to us why a young person is better off unemployed from a job that would pay $2.90 an hour than employed at a job that pays $2.00 an hour,” the Friedmans wrote.

The Friedmans also said that low-paying jobs and apprenticeships provide other value than money to the unskilled worker, such as the chance to learn new skills and acquire experience.

More than 100 studies have shown that increases in the minimum wage result in fewer available jobs, said Steve Hanke, a professor of applied economics at Johns Hopkins University in Baltimore, who was a senior economist on President Reagan’s council of economic advisers.

A new report from the nonpartisan Congressional Budget Office projects that if the Raise the Wage Act of 2021 is enacted as written, there would be 1.4 million fewer jobs in the U.S., a decline of 0.9%.

“The people the minimum wage is designed to help, it hurts, because they don’t get the minimum wage. They don’t have a job. If you jack the minimum wage up higher than someone is worth, they’re not going to be hired,” Hanke said.

Mark J. Perry, a scholar at the American Enterprise Institute and economics professor at the University of Michigan-Flint, agreed, saying that people often think the minimum-wage debate pits an employee against an employer; in fact, he said, it’s about employees competing against each other.

“Low-skilled workers compete against higher-skilled workers. That’s something that often gets overlooked. Employers will overlook those lower-skilled workers in favor of hiring higher-skilled workers,” Perry said.

“As (economist) Thomas Sowell has pointed out, the real minimum wage is always zero because that’s what the worker makes if he or she can’t find a job because he’s been priced out of the labor market because the minimum wage is above what they’re really worth to an employer.”

Costs vs. benefits

The Congressional Budget Office report, however, also says a minimum wage increase would reduce the number of Americans in poverty by 0.9 million, and that there would be fewer people reliant on government programs, such as food assistance.

Paul K. Sonn, state policy program director for the National Employment Law Project, a New York nonprofit that advocates for a $15 minimum wage, said any negative effects of the change, such as the potential for increased consumer prices, are outweighed by the benefits. And he notes that recent surveys have found a majority of Americans favor a higher minimum wage, as do many companies. Amazon, for example, which already has an in-house $15 minimum wage, supports the change nationwide.

“We believe $15 an hour is the minimum anyone in the U.S. should be paid for an hour of labor. We also believe it’s good for business,” Jay Carney, Amazon’s senior vice president of global corporate affairs, wrote on the company website.

Walmart, the largest employer in the U.S., starts its workers at $11, offering a Friedman-like argument that the pay structure allows its workers to advance.

“Those people that we’re raising wages for tend to have been with us for a longer period of time than someone that might be earning the entry wage,” CEO Doug McMillon told investors, Business Insider reported. “We’re trying to … create this ladder of opportunity, providing an opportunity for people when they start with the company to build a career like so many of us already have.”

McMillon, who began his career at Walmart as a teen making $6.50 an hour, said the company wouldn’t be able to implement its ladder of increases if it had to pay everyone a minimum of $15 an hour right now.

The minimum wage in the U.S. is a complicated patchwork of laws, with states and even cities having standards independent of federal law.

According to the National Conference of State Legislatures, 29 states and the District of Columbia have established minimum wages above the federal minimum wage.

But it is the differences between the states that are a prime component of arguments against a federal minimum wage, according to Perry, at the American Enterprise Institute.

“There’s no reason that we should have a $15 uniform wage for the entire country, for both high-cost-of-living areas and low-cost-of-living areas,” he said. Fifteen dollars an hour might be appropriate in Hawaii, which has the nation’s highest cost of living, he said, but $10 might be more appropriate for Mississippi.

“You could make the case that if there is going to be a minimum-wage law, it should be set by the state or county or city government, not by the federal government,” he said.

But Romney, the senator from Utah, said America has a federal minimum wage and it’s not going away, so it’s incumbent upon policymakers to enact one that has a minimal effect on the number of jobs. He said the $10 proposal he has put forth with Cotton and three other senators would not result in lost jobs, and he has long been in favor of a minimum wage that adjusts for inflation. In the matter of wages, he says, the government has a justifiable interest in what private businesses do.

“The federal government does provide support for people at the very low income level,” he said. “Not having a minimum wage can increase the amount of federal expenditures for health care, food, clothing and child benefits, so the federal government does very much have a stake in what businesses are paying people.”

What would Reagan do?

With his proposal, Romney has again established himself as an outlier. He has previously said that Republicans are “nuts” to not want to raise the minimum wage, adding “I think, as a party, to say we’re trying to help the middle class of America and the poor and not raise the minimum wage sends exactly the wrong signal.”

Yet proponents of a higher minimum wage, such as Sonn at the National Employment Law Project, are unhappy with the Romney-Cotton plan, which also requires employers to verify the employment status of their workers through E-Verify.

Sonn called the stipulation a “punitive anti-immigrant measure masquerading as a minimum-wage increase.”

Romney also finds himself outside the tent of people like Hanke, who considered Friedman a friend and mentor and who also was friends with another economist widely admired by conservatives, Friedrich Hayek.

Romney, Hanke said, is “off the reservation” when it comes to the minimum wage. “The government should not be in the business of setting prices, whether they’re for labor or for goods and services,” he said. “The market should be determinant, with sellers and buyers voluntarily agreeing what price they pay. … From my point of view, it really is immoral for the government to be coming in and setting prices of things.”

<img class="i-amphtml-blurry-placeholder" src="data:;base64,

President Ronald Reagan visits Hooper, Weber County, on Sept. 10, 1982.
Tom Smart, Deseret News

Hanke doesn’t think much of Hawley’s proposal, either. “Milton Friedman would scold him and give him a quick lesson in economics, and so would I,” he said.

And what would Hanke’s former employer, Ronald Reagan, do, if he’d been confronted with legislation to raise the minimum wage, which was $3.35 during his administration, to $15, as Democrats propose today?

“I don’t think he would have abolished it all together, because Reagan was principled, but pragmatic,” Hanke said. “I don’t think he would think the abolition of the minimum wage would be worth the political cost of doing it, even though he would be very happy to have gotten rid of the whole thing.

“I think he would have remained as quiet as possible on raising it, as he did.”

Ep. 4 – From Cradle to Grave [6/7]. Milton Friedman’s Free to Choose (1980)

March 11, 2021

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

Dear Mr. President,

Thank you for taking time to have your office try and get a pulse on what is going on out here in the country. I wanted to let you know what I think about the minimum wage increase you have proposed for the whole country and I wanted to quote Milton Friedman who you are familiar with and you made it clear in July that you didn’t care for his views! Let me challenge you to take a closer look at what he had to say!

_____________

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