Deficit Spending

Who Does the Chamber of Commerce Work For?

shocked george

Hero to libertarians everywhere Justin Amash has been taking the Chamber of Commerce to task on Twitter over the organization’s very real tendency to prop up crony capitalism, this time by openly supporting the Ex-Im bank (make sure you go down the rabbit hole of retweets to get the full effect):

 

It’s good to have people on the Hill pointing out that those with access in DC are the ones who really do pull the policy strings, for better or worse. And the Chamber definitely has that access, one of the largest lobbying groups, and reportedly the largest spender yearly on behalf of its members. So, it’s easy to find fault with with them. They epitomize those “special interests” that all who disapprove of big government complain about. But then, sometimes they go and do things like this:

For several years, Josten has pressed the case that the federal debt, and in particular the tab for retirement programs, is an urgent concern for business, even if executives don’t see its effects firsthand the way they do for more traditional business worries such as taxes or regulations.

Don’t Believe The Media Hype About Rand Paul Hypocrisy

rand reporters

The media may be tipping their hand at how they’re going to treat Rand Paul during the 2016 election cycle. Purity testing and alleged hypocrisy.

It started last month when Time.com put out an article on the Kentucky Senator’s proposal to increase defense spending. The piece claims Paul did an “about-face” and a “stunning reversal” from past stances on giving money to the Pentagon.

But that isn’t what Paul did.

He did propose $190-billion in defense spending, but tacked on $212-billion in cuts from other places, including foreign aid, HUD, and the EPA. Paul’s reasoning is simple: if the U.S. is going spend money on something, it needs to be able to pay for it. This is sound policy and certainly better than Florida Senator Marco Rubio’s proposal to increase spending without cuts.

It’s interesting Time didn’t bother getting a quote from Paul’s office. They instead just wrote the office confirmed the amendment was his, without getting context. Both Reason and Huffington Post were willing to get quotes from Paul’s office. That should say something about the context of how Time is treating Paul.

For those who are angry about Paul’s proposal, it’s important to remember he’s in the minority of the majority. He’s a libertarian, who is surrounded by people who aren’t. Paul may want to drastically cut the federal government back to sustainable areas, but he’s one man.

Five Things That Are Right with the Congressional Budget Process

Yesterday the Wall Street Journal’s Washington Wire blog published a listicle by public affairs consultant John Feehery (once a spokesman for former Speaker of the House Dennis Hastert, the moderate, more timid successor to revolutionary Newt Gingrich), opining on the messy federal budget process. My attempts to reach Reid Epstein, the blog’s editor, to offer a counterpoint were fruitless, so here are five reasons we should be thankful for the current federal budgeting process.

President Obama’s subtle trick to sell “free” nationalized community college

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On Thursday, President Obama announced from Air Force One an unprecedented plan to extend federally-funded universal public education up through community college for everyone. Students would have to maintain a certain grade point average and choose plans and colleges that have proven career success. The plan will be fully articulated in the President’s annual budget proposal, which will be dead on arrival in the newly Republican-controlled Congress, and Obama will provide more details in his upcoming State of the Union address. The estimated cost has not been revealed, but the idea is for the federal government to fund 75% of the program with states picking up the rest.

However, it’s not the details of the program that are so distressing as the subtle, disingenuous way the President has chosen to sell it. Obama made the announcement from his sleak office aboard Air Force One, dressed in a tie but no jacket, leaning back casually on his angled desk. Whoever choreographs these things is a master in marketing.

The recorded, scripted, teleprompter-read nearly two-minute statement was billed as a preview of the State of the Union. The community college initiative is introduced thusly:

Put simply, what I’d like to do is to see the first two years of community college free for everybody who is willing to work for it. That’s right, free for everyone who’s willing to work for it. It’s something we can accomplish, and it’s something that will train our workforce so that we can compete with anybody in the world.

Fantastic! What’s another few billion dollars a year when you’re already $18 trillion in debt? YOLO, amirite?

Republicans agreed to no debt ceiling

Clearly

Remember those commercials featuring a classroom full of Chinese students, listening to a lecture about the fall of the United States of America? As of this latest agreement on a “not-really-a-debt-ceiling,” we are headed in that direction. Don’t be alarmed, of course. It will all work out in the end. We really do need all the things that the government is doing with all that money that we’re borrowing from anyone around the world that is foolish enough to keep investing in us.

The concept of Obama spending more in one day that George W. Bush did in an entire year was brought to my attention today on Facebook by Dr. James S. Robbins. The context was that he was bemoaning the fact that he could no longer make the comparison between a month of Obama spending, and a full year of Bush deficit spending. Obama had reached the one day mark.

True, that’s the fault of some interesting accounting procedures that the government uses to deal with what used to be debt ceilings. This particular radical increase was the result of repaying various governmental accounts that have been tapped since May, in an attempt to not hit the debt ceiling. The increase put the national debt over $17 trillion for the first time in United States history ($17,075,590,107,963.57, to be exact).

Obama and Detroit the industry versus Detroit the city

Images_of_Money (CC)

When the news broke that the City of Detroit had declared bankruptcy, there were a fair number of jokes going around on social media, but in general, it wasn’t “news.” Yes, it is the largest city to take that step so far, but it’s Detroit. No one in their right mind could consider it surprising. What was remotely interesting in the case was what happened afterwards.

One judge - Circuit Court Judge Rosemarie E. Aquilina - put a new twist to the story by declaring that it was unconstitutional for the City of Detroit to declare bankruptcy in the first place. And so the political circus begins. Of course, Allahpundit at Hot Air dissected the situation, and came to the conclusion that this was little more than political pandering by yet another leftist judge.

We Are All Modern Monetary Theorists Now

As a consequence of loose monetary policy with a fiat currency, the United States is rapidly descending into an economic reality of Modern Monetary Theory, or MMT.  While MMT (also known as Chartalism) is typically associated with its Keynesian predecessor and the policies of the Left, new developments reveal that both parties are responsible for the slip into a brave new economic world.

Essentially, there are four preconditions in Modern Monetary Theory:

1) Money enters the economy through government spending, as the total amount of money is constrained not by gold but by the total output of the national economy;
2) Government spending is speculative as it prints as much money as it needs to control production and, as a byproduct, employment, and spending beyond productive capacity leads to inflation;
3) Taxes do not pay for expenditures but are instead a way to throttle private sector demand; and
4) The government is the issuer of the currency, sovereign governments that issue their own currency are never insolvent, so debts essentially don’t matter.

Rand Paul’s New Plan to Prioritize Spending

Rand Paul

Senator Rand Paul has a new plan to prioritize government spending in order to stave off defaults and bring the country back towards solvency:

In a renewed attempt to force President Barack Obama’s hand on the debt limit, Kentucky Republican Sen. Rand Paul is pushing legislation that would ban federal spending on anything but interest payments on the national debt, Social Security checks, and military salaries.

Paul, who is traveling through Israel this week, told Business Insider here Thursday that he believes the GOP should take a more pro-active approach to the coming fight over raising the debt ceiling. Rather than march the country toward a government shutdown — and spook markets with possible default — Paul argued that Republicans should pass a bill that would force the government to prioritize payments to bondholders.

Real Defense Budget Alternatives

With the “fiscal cliff” behind us, it’s important to remember that in less than two months, the Congress will be dealing with another manufactured crisis: The budget cuts of the 2011 Budget Control Act known as “sequestration.”  The Department of Defense will bear 41% of the prescribed cuts, eliminating an additional $492 billion over 10 years.  Although entitlement spending will also be on the table, the initial fight will be over cuts to the Defense budget.

A new study by the nonpartisan RAND Corporation concludes that the defense budget cuts cannot be taken without altering our overall defense strategy, and that “the department should modify defense strategy to fit the new resource constraints and prepare its course of action sooner rather than later.”

The authors highlight three alternative strategies, which anyone interested in this topic should read and consider.  An accompanying article by the authors states, “Reductions of the magnitude implied by sequestration—some $500 billion over the coming decade—cannot be accommodated without a re-examination of current defense strategy.”

Dear Media: This Isn’t About Grover Norquist

Grover Norquist is under fire. Unjustly.

With Republican Sens. Lindsey Graham, Saxby Chambliss, Rep. Peter King and others seemingly deserting Grover Norquist and the Taxpayer Protection Pledge created by his organization, Americans for Tax Reform, media outlets across the spectrum are declaring that the GOP is “Over Grover” and that his vicelike grip of eternal dominance on the GOP might not be so eternal after all. We have images like this one, showing Republican leaders bowing to him as if he is a god. And on and on and on.

What it really is, though, is just another round of misinformation, wrong data, and interpretations based on faulty premises. Yet another sideshow that is completely missing the point, the real debate we should be having in DC.


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