Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Deficit

How Do You Spell Apocalyptic? Don’t Ask the Congressional Budget Office

This article was published by The McAlvany Intelligence Advisor on Wednesday, April 11, 2018: 

All one needs to do is view the first page of the CBO’s 166-page report on its 10-year outlook for the U.S. economy and government spending that was released on Monday to see why: it features a graph that shows better than words just where we’re headed. Two lines diverge: one, showing government revenues; the other, government outlays. The gap, instead of narrowing, widens dramatically into the future. Unfortunately, the graph cuts off in 2028, leaving one wondering: what happens next?

The CBO report reflected the new law, happily called the Tax Cuts and Jobs Act, that was passed in December. Its previous projection, made by the CBO last June, showed a deficit of $563 billion for 2018, rising to $689 billion next year. Now, with the Tax Cuts and Jobs Act behind them, the CBO now projects this year’s deficit to be $804 billion and next year’s to be just a touch below a trillion dollars, at $981 billion.

The CBO, considered by many to be less partisan than projections coming from the White House’s Office of Management and Budget (OMB), covered itself with this disclaimer:

Keep Reading…

CBO Update: Trillion-dollar Deficits to Arrive Two Years Sooner

This article appeared online at TheNewAmerican.com on Tuesday, April 10, 2018: 

According to the latest report from the Congressional Budget Office (CBO), released on Monday, the U.S. economy is going great guns. But that growth, no matter how robust, will never catch up with government spending. Hence, despite that growth, annual deficits of a trillion dollars will arrive two years sooner than originally projected.

That previous projection, made by the CBO last June, showed a deficit of $563 billion for 2018, rising to $689 billion next year. Now, with the Tax Cuts and Jobs Act behind them, the CBO projects this year’s deficit to be $804 billion and next year’s to be just a touch below a trillion dollars, at $981 billion.

The CBO is considered by many to be less partisan than most government entities and as likely to create more accurate projections than those coming from the White House’s Office of Management and Budget (OMB). It covered itself with this disclaimer:

Keep Reading…

China’s Trump Card: $1.1 Trillion in U.S. Treasuries

This article appeared online at TheNewAmerican.com on Friday, April 6, 2018: 

Flag of the Chinese Communist Party 贛語: 中國共產黨黨...

Flag of the Chinese Communist Party

In the nascent “trade war” between the United States and China, there is one option the Communist Chinese government isn’t considering using: its current stash of $1.1 trillion of U.S. Treasuries. Trevor Hunnicutt, writing for Reuters, said that, for the moment at least, “Chinese officials are holding back on taking aim at their largest American import: [U.S.] government debt.”

Hunnicutt posited that, if the Chinese did unleash what he called their “nuclear option,” it would devastate the American economy by forcing interest rates much higher and increasing the U.S. Treasury Department’s costs of financing its trillions in debt.

He also noted that, once liquidated, those assets would no longer serve as a threat to the United States, having already been expended. As Jeffrey Gundlach — known as Wall Street’s Bond King — said, “It is more effective as a threat. If they sell, they have no [more] threat.”

In his typically brash negotiating style, President Trump opened the bidding in March by

Keep Reading…

CNN: Democrats are Headed for Real Trouble in November

This article was published by The McAlvany Intelligence Advisor on Wednesday, February 28, 2018: 

When far-left CNN, proclaimed here and elsewhere as the Communist News Network, suggests that the Democrats might be in trouble come November, one can rest assured that they are truly in deep kimchi (a Korean side dish made with fermented vegetables). Political writer for CNN Eric Bradner sounded the alarm two weeks ago:

Caught flat-footed by the suddenly increasing popularity of the GOP tax plan, leading Democrats are urging the party’s candidates to … focus their campaigns [instead] on the economy.

That’s because Trump’s tax reform law “is now seen favorably by about half of voters … as Democrats fear that their chances of claiming House and Senate majorities in November’s midterm elections are slipping.”

Slipping? How about disappearing? How would any Democrat running for reelection in November respond positively to taxpayers’ questions about why he or she didn’t vote to allow them to keep more of their income? Left-wing Priorities USA just issued a memo warning that the debate over tax reform “has been relatively one-sided recently and voters have not heard nearly as much from Democrats.”

Bradner added:

Keep Reading…

Trump’s Budget a Mixture of Hope, Optimistic Assumptions, and Statistics

This article was published by The McAlvany Intelligence Advisor on Wednesday, February 14, 2018: 

Mark Twain attributed his quote about statistics to British Prime Minister Benjamin Disraeli: “Figures often beguile me, particularly when I have the [freedom] of arranging them myself … there are three kinds of lies: lies, damned lies, and statistics.”

Mark Mulvaney, Trump’s OMB director, must feel the same way. There’s enough statistical smoke and mirrors in the president’s “An American Budget” to, in the words of Tevye [the dairyman in Fiddler on the Roof] “cross a Rabbi’s eyes.”

First, Mulvaney admits that this MAGA budget won’t balance, ever. The government is too big and growing too fast for the economy that funds it ever to catch up. So he and the president decided to ignore a balanced budget and go for the next best thing: show the economy growing faster than the government is growing and someday, eventually, the deficits will start to shrink when compared to the economy itself.

The numbers “prove” the conclusion: for fiscal year 2018 (which ends this coming September 30), government revenues of $3.3 trillion compared to government spending of $4.2 trillion will leave a gap – a deficit – of $873 billion, equivalent to 4.4 percent of the country’s gross domestic product. In the following years that annual deficit is projected to grow to $987 trillion in 2020, equivalent to 4.5 percent of the country’s GDP. Only by 2022 does that percentage begin to decline based on the assumption that government spending is only $4.9 trillion while tax receipts would hopefully be $4.1 trillion.

That is the crux of the new math in Trump’s budget:

Keep Reading…

Trump’s Budget Won’t be Balanced, Just Restrained

This article appeared online at TheNewAmerican.com on Tuesday, February 13, 2018:

In his message to Congress describing “An American Budget,” the president started off accurately enough: “The current fiscal path is unsustainable, and future generations deserve better.” Translation: If this budget isn’t approved, wage earners will not only have to hide their wallets but their grandchildren as well.

He added: “Over the next decade, a steady rate of 3-percent economic growth will infuse trillions of additional dollars into our economy, fueling the dreams of the American people and sustaining a new era of American Greatness.” And, hopefully, enough vastly increased tax receipts to pay for it.

He left his Office of Management and Budget (OMB) director Mick Mulvaney to fill in the gaps and pick up the pieces. The budget, apparently, won’t ever be balanced, so we’re changing the goal: grow the economy faster than the budget so that the deficit gap starts to shrink. Said Mulvaney, “As a nation, we face difficult times — challenged by a crumbling infrastructure, growing deficits, rogue nations, and irresponsible Washington spending….  Just like every American family, the budget makes hard choices: fund what we must, cut where we can, and reduce what we borrow.”

Here are the numbers:

Keep Reading…

Public-Private Partnerships the Key to Trump’s Infrastructure Plan

This article appeared online at TheNewAmerican.com on Tuesday, February 13, 2018:

On the surface, the White House’s plan to rebuild America’s failing infrastructure looks like magic: The job is going to cost $1.5 trillion, but the federal government will only have to “invest” $20 billion each year for the next 10 years to get the job done. The rest will come from states and local municipalities in response to various “incentives” through the grant process. Additionally, the White House’s proposed plan will cut the permitting process down from the usual 10 to 13 years to just 24 months — 21 months to consider the project and three months to approve it. It also relies heavily on the concept of “public-private partnerships” to fund the program.

The president promoted the idea that “it is time to give Americans the working, modern infrastructure they deserve.” Of course, the government has nothing to give which it has not already previously extracted from its citizens. But no matter. Trump added:

Keep Reading…

Treasury Advisory Committee Says U.S. Must Borrow Trillions, Sending Stocks Down

This article appeared online at TheNewAmerican.com on Monday, February 5, 2018:

When an obscure advisory committee announced last Wednesday that the U.S. Treasury would have to borrow billions to fund Trump’s tax reform program, the stock market pitched headlong into a selloff, dropping Thursday, Friday, and early into Monday. Before the selloff, the Dow was approaching 26,300, but by the close on Friday it had lost 760 points. The rout continued into Monday, with the Dow down more than 1,200 points from Wednesday’s high. [Note the rout continued into Tuesday but found some footing by the end of the day.]

Much handwringing by commentators blamed the selloff on various technical factors:

Keep Reading…

Student Loans in Default Traded for Broken Social Security Promises?

This article was published by The McAlvany Intelligence Advisor on Monday, January 1, 2017: 

On the surface, Representative Tom Garrett seems like an intelligent guy: a freshman member of the House from Virginia, he served previously as the Virginia Commonwealth’s attorney for Louisa County. He’s already earned himself a Freedom Index rating of 80 percent from the John Birch Society for his voting record in the House.

But at age 45 he is still paying off his student loans that helped him

Keep Reading…

Craziest Idea of 2017: Let Students Pay Down Their College Loans by Delaying Their Social Security Benefits

This article appeared online at TheNewAmerican.com on Monday, January 1, 2018:  

What a world! Broken promises traded for other broken promises, and offered with a straight face!

Representative Tom Garrett (R-Va.) turns 46 in March and is still paying off his student loans. In less than 20 years he’ll qualify to retire under present Social Security rules. He put two-and-two together and came up with the Student Security Act (SSA): Pay down some of his student loans by pushing back his retirement age.

Specifically, Garrett’s bill (H.R.4584, which has four co-sponsors so far) would forgive

Keep Reading…

Opening ANWR to Energy Development May Be Too Late

This article appeared online at TheNewAmerican.com on Wednesday, December 20, 2017: 

Part of the motivation by Republicans to open the Arctic National Wildlife Refuge (ANWR) to energy development — off limits for nearly 40 years thanks to environmental extremists and the Obama administration — is to use lease fees to offset the deficits in the tax reform bill.

The numbers coming from the Congressional Budget Office (CBO) are impressive. Leasing even a tiny part of the tiny part that “Section 1002” represents of the total ANWR acreage would produce $2.2 billion in revenues over the next 10 years, to be split evenly between Alaska and the federal government.

Alaska’s Republican Senator Lisa Murkowski said in a speech on the floor of the Senate late Tuesday night that

Keep Reading…

Final Tax Reform Bill: The Goods Outweigh the Bads

This article appeared online at TheNewAmerican.com on Tuesday, December 19, 2017:

With victory over tax reform clearly in sight, President Trump on Sunday tweeted, “As a candidate, I promised we would pass a massive TAX CUT for the everyday working American families who are the backbone and the heartbeat of our country. Now, we are just days away.” From the White House came more details:

Keep Reading…

The GOP Tax Reform Bill: Sausage-making on the Titanic

This article was published by The McAlvany Intelligence Advisor on Monday, November 6, 2017:

John Godfrey Saxe. Library of Congress descrip...

John Godfrey Saxe

The oldest attribution isn’t to Otto von Bismarck, the Iron Chancellor of Germany, but to an American poet, John Godfrey Saxe. Back in 1869, he said it best: “Laws, like sausages, cease to inspire in proportion as we know how they are made.”

Imagine, then, making sausages on the deck of the Titanic just after it hit an iceberg on the glassy sea of the North Atlantic in the early morning hours of April 15, 1912. The wonderful smells might have distracted the passengers from the reality that within two hours and forty minutes the unsinkable ship would disappear beneath the surface of the icy waters, taking 1,550 passengers with her.

That picture may be too dramatic for our purposes. But

Keep Reading…

Combined Social Security Spending for 2017 Tops $1 Trillion for First time

This article appeared online at TheNewAmerican.com on Friday, October 27, 2017: 

The Monthly Treasury Statement issued on Wednesday from the Social Security Administration showed that total spending for the three social welfare programs administered by the agency — the Old Age and Survivors Insurance program, the Disability Insurance program and the Supplemental Security Income program — topped $1 trillion for the first time in history in 2017.

The program first hit $600 billion in spending in 1997, and it took nine years to hit the next benchmark, $700 billion. From there it took between three and four years to hit subsequent $100 billion spending benchmarks. Accordingly, the agency estimates that it will spend $1.6 trillion in 2026. From there it will be just a few short years before all funds are exhausted.

Most sensible observers have been warning for years that the program is in dire jeopardy, with all manner of schemes being proposed to rescue it from oblivion:

Keep Reading…

Treasury Department: $666 Billion Deficit; Sixth-highest in History

This article appeared online at TheNewAmerican.com on Monday, October 23, 2017:  

The federal government ran a deficit of $666 billion in 2017, reported the U.S. Treasury Department on Thursday, thanks mainly to increases in budget items that supposedly can’t be cut: Social Security, Medicare, Medicaid, and interest on the national debt. In addition, military spending is due for substantial increases under the Trump administration.

Translation:

Keep Reading…

Herb Stein, Meet Mick Mulvaney

This article was published by The McAlvany Intelligence Advisor on Monday, October 23, 2017: 

English: Official portrait of US Rep. Mick Mul...

Mick Mulvaney

University of Virginia professor Herbert Stein, the father of Ben Stein of Ferris Bueller fame, was known as a pragmatic conservative. But he is best known for his cryptic expression, “If something cannot go on forever, it will stop.”

Mick Mulvaney’s hopeful outlook hasn’t yet been tarnished by his experience in Washington. Serving as a member of the House of Representatives from South Carolina prior to accepting the position of President Trump’s Director of Office of Management and Budget, Mulvaney really thinks, based on his public statements, that things really can go on forever. All that is needed is a little tweaking: “We need to grow our economy again and get our fiscal house in order. We can do that through smart spending restraint, tax reform, and cutting red tape.”

A closer look at the size of that fiscal deficit, however, reveals Mr. Mulvaney’s naiveté: on Thursday the Treasury Department announced that the deficit for the fiscal year that ended on September 30 was

Keep Reading…

Latest Report: Crude Won’t See $60 a Barrel For at Least a Year

English: Flag of the Organization of Petroleum...

This article appeared online at TheNewAmerican.com on Friday, October 13, 2017:

According to oil seers, there are two magic numbers: the five-year average of five billion barrels in crude-oil reserves held around the world in salt caverns, oil tankers, and oil storage tanks; and $60 for a barrel of oil, priced in London.

In January there were 318 million barrels of “surplus” crude above that five-year average, but by the end of September that number had dropped to “only” 170 million barrels of “surplus.” Oil traders saw the trend toward “balance” — that magical, mystical, and entirely theoretical moment when worldwide crude-oil inventories would hit that five billion barrel marker and thus be “balanced” — and started getting excited. Placing bets that oil prices would move higher as worldwide inventories continued to drop, they placed bullish bets in the futures market, which hit new highs in September.

But according to the monthly report issued by the International Energy Agency (EIA) on Thursday, that’s likely to be as good as it’s going to get:

Keep Reading…

Tax Reform: The Sausage-Making Begins

This article was published by The McAlvany Intelligence Advisor on Friday, September 29, 2017:

Otto von Bismarck is credited, rightly or wrongly, with two famous quotes about laws and sausages: “Laws are like sausages. It’s better not to see them being made.” And “To retain respect for sausages and laws, one must not watch them in the making.”

One of the more insightful comments on the whole business in today’s Washington comes from the President’s son, Donald J. Trump, Jr., (shown above) who said:

Keep Reading…

Tax-reform Plan Called “Tremendous” by Trump, “Fake Math” by Schumer

This article appeared online at TheNewAmerican.com on Thursday, September 28, 2017:

In unveiling the tax reform “framework” cobbled together by the Trump administration, the House Ways and Means Committee, and the Senate Finance Committee on Wednesday, President Trump called it “tremendous”: “This is a tremendous change, and the biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up [to] levels you haven’t seen in many years.”

On cue, House Minority Leader Nancy Pelosi (D-Calif.) expressed her concerns about deficits, perhaps for the first time in her political career:

Keep Reading…

OPEC Leaving Its Options “Open” as Production Cuts Fail to Raise Oil Prices

This article appeared online at TheNewAmerican.com on Friday, August 25, 2017:  

Even the subtitle was misleading: “JMMC Reports Positive Indications of Oil Market Rebalancing in Progress.” That is the subtitle of the report issued on Thursday by OPEC’s Joint Ministerial Monitoring Committee, the toothless enforcement arm of OPEC.

OPEC is down to its last option: verbiage. The JMMC reported that everything is rosy:

Keep Reading…

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann