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: Spending

New Weekly Unemployment Claims Remain Below 300,000, Longest Streak Since 1967

This article appeared online at TheNewAmerican.com on Thursday, April 12, 2018:

Unemployment claims fell last week to just 233,000, far below the historical average, cementing into place the longest streak below 300,000 jobless claims since 1967. A proxy for layoffs, those claims reflect not only an increasing reluctance on the part of employers to let their workers go, but an increasing need for them to bring more workers on in the face of an economic tsunami that’s just now starting to roll into the American economy.

This is just one of many indicators reflecting a growing economy, including an unemployment rate at 4.1 percent, the lowest level since 2000 (and expected to move much lower in the coming months) and employers adding to their payrolls for 90 straight months — the longest economic expansion in history.

Keynesian economists consider that consumers drive the economy, using their pay raises to drive spending on consumer goods and services. Common sense economics — aka Austrian School economics — claims that is putting the cart before the horse: It is capital investment that drives the economy, providing goods and services that consumers discover that they need and want and are willing to pay for.

The classic example is Apple’s iPhone, which

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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:

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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:

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Remembering Vivien Kellems as April 16 Approaches

This article was published by The McAlvany Intelligence Advisor on Friday, March 30, 2018:

Vivien Kellems, American industrialist and tax...

Vivien Kellems, American industrialist and tax protester

Vivien Kellems, along with her brother Edgar, invented a specialized cable grip for electrical cables and founded Kellems Cable Grips in 1927. The company prospered.

But in 1943, during the Second World War, Congress passed the Tax Payment Act, which required the payers of wages, not the receiver of wages, to withhold estimated taxes and remit them quarterly to the Bureau of Internal Revenue (later called the IRS).

The injustice was apparent to Vivien and in 1948 she refused, declaring that “If they wanted me to be their agent, they’d have to pay me, and I want a badge.”

They didn’t, and instead simply seized the amount the agency thought she owed from her company bank account. She sued in federal court and finally got her money back.

Withholding has allowed the government to collect far more money far more efficiently with far less bleating from the sheep as explained by the U. S. Department of the Treasury:

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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:

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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:

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The Coming Avalanche of Repatriated Dollars

This article appeared online at TheNewAmerican.com on Friday, January 19, 2018: 

English: Historical GDP per capita for the Uni...

This is an old chart of US GDP. Get ready for the next leg up

On Thursday The New American speculated about the impact of Apple’s repatriation of its overseas profit hoard of some $250 billion and where Apple intends to invest some of it. It raised questions about the $2.5 trillion in profits that is still held overseas by American companies unwilling to subject those profits to the United States’ outrageously high income tax rates.

With Apple’s decision, and the repatriation tax rate of just 15.5 percent in the new tax law, some of those questions can be addressed.

First,

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Apple to Repatriate Its Foreign Profits and Put Them to Work in America

This article appeared online at TheNewAmerican.com on Thursday, January 18, 2018:  

Apple announced Wednesday that not only would it repatriate nearly all its foreign cash holdings under the new tax reform law, but it was going to put a lot of it to work right away. This puts the lie to anti-capitalists who predicted that such a plan would only further enrich the already rich.

Instead Apple is going to spread the repatriated funds around, announcing that it would not only be creating new jobs but would be building new facilities and expanding its financial commitment to the company’s “innovation” fund. It also is expanding its efforts to reach students in high school to teach them coding language (for free) so that many of them will be able to provide Apple with the coders and software developers it will need as it expands into the future.

In the process it will also pay the largest single tax bill in history:

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New Jersey Governor Ignores Pension Crisis, Wants More Spending

This article appeared online at TheNewAmerican.com on Wednesday, January 17, 2018: 

English: Teachers at New College Nottingham pr...

Teachers protesting over proposwed cuts to government pension plans.

While running for governor of New Jersey, Democrat Phil Murphy was asked what he would do about the state’s overwhelming pension crisis, and he waffled: there’s “no easy answer,” he said. He added that the state would have to do something about the problem. Said Murphy, “The state has to stand up for its side of the bargain. Period. If the state doesn’t, there’s no use in having [any further] discussion.”

Murphy was inaugurated as the New Jersey’s 56th governor on Tuesday and promptly forgot all about the pension tsunami about to engulf the state. Instead he offered both a “wish list” and a “to-do list” for his supporters and Democratic legislators in attendance. His “wish list” contained the usual collection of liberal promises, while his “to-do” list is what he wants the state legislature to bring to his desk within the next 30 days.

His “wish list” was a rehash of his campaign promises — long on generalities but short on specifics — including legalizing marijuana, protecting illegal immigrants from ICE, providing free tuition at the state’s community colleges, eliminating “tax breaks” that large corporations are allegedly unfairly enjoying, investing state funds in more costly “green energy” projects, and paying for it all by raising taxes on those few millionaires still residing in one of the country’s highest-tax states.

He was much more specific with his “to-do” list. He ordered the state’s liberal and heavily Democratic legislators to get off the snide and send him six bills within the next 30 days, each of which, said Murphy, “will be met with a signing ceremony.” Their marching orders from Murphy included new funding for “women’s health” and Planned Parenthood, raising the minimum wage in the state to $15 an hour, mandating “equal pay” for women, requiring employers in the state to provide paid sick leave to their employees, passing laws removing barriers to having illegals vote, and, of course, additional attacks on the state’s more than three million law-abiding gun owners.

He mentioned not a word about the state’s pension crisis, which has been brewing for years and accelerating nearly exponentially. It’s not that Murphy doesn’t know about the crisis or its extent and potential for bankrupting the state. In 2005, acting New Jersey Governor Richard Codey convened a commission to study “the problem,” naming Phil Murphy as its head. In its conclusion, that study urged the state in no uncertain terms to end immediately all “pension holidays” (the skipping of payments to the state’s five pension plans for a period of time), to avoid actuarial “gimmicks” commonly used to make those liabilities appear to be smaller than they actually are, and to eliminate borrowing to pay the state’s contributions. It also recommended a series of reforms, including an end to pension “spiking” (by which employees can sweeten their final payouts as they approach retirement), and raising the age at which plan beneficiaries could retire with full benefits. That last recommendation, which was never implemented, would have raised the full-benefit retirement age from 55 to 60.

So Murphy cannot claim ignorance. He is also certain to know of the accounting chicanery that took place last year, i.e., using the state’s lottery program to help pay the state’s pension contributions. But it was chicanery taken to level of audacity rarely seen even in states as corrupt as New Jersey. Instead of demanding that the lottery’s annual $1 billion proceeds flow into the pension funds’ coffers, the legislature actually transferred the entire program into those coffers and then declared that the future value of those annual proceeds (happily and likely generously estimated at more than $13 billion) was now an asset, reducing (on paper at least) the amount of the unfunded liability.

Moody’s Analytics was not impressed: “The lottery transfer does not change the state’s weak [and] steeply rising pension contribution schedule. [Even after the transfer] there remains considerable risk that the state will be unable to afford rapidly growing pension contributions.”

Also not impressed were two senior fellows at the Manhattan Institute, who just released their study of New Jersey’s pension problems. In January, well before Murphy neatly demurred on even mentioning them, the authors concluded: “It is highly unlikely that New Jersey will generate enough new revenues to meet its pension obligations without severely hobbling the rest of the state’s budget. At the same time, allowing its pension system to continue to accumulate debt by not contributing adequately to it will push New Jersey toward a potentially catastrophic failure of its government pensions.”

At the moment, those five government pension plans have the lowest funding ratio of any state in the union, with a liability estimated to be $124 billion. Those plans are only 30-percent funded currently and declining with each passing day.

But Murphy’s term is for only four years, and if he wins reelection, his tenure ends in eight years. Those plans will likely remain in place, continuing to threaten pensioners who still think they will be getting their benefits, and threatening the state with bankruptcy if it tries to fund them properly. But Murphy will be long gone, proving once again the old adage: Politicians come and go, but the unfunded promises they make live long after them.

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

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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:

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November’s Federal Deficit 11 Percent Ahead of Last Year’s

This article appeared online at TheNewAmerican.com on Wednesday, December 13, 2017:

Buried in the latest report from the Department of the Treasury is this nugget: Through the first two months of the fiscal year, which began on October 1, the deficit (the difference between revenues and spending) was 11 percent higher than the same two months last year. And this despite revenues (taxes from individuals and corporations) setting records. The $433 billion the government collected in October and November was $13 billion more than it collected in the same period last year, and $11.3 billion more than it collected the year before.

In those two months,

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“Trump’s” Stock Rally Best Since 1945

This article appeared online at TheNewAmerican.com on Wednesday, November 8, 2017: 

Before the market opened on the day after Donald Trump won the election a year ago, futures were predicting a precipitous drop in the Dow Jones Industrial Average of 900 points. By the close of business that day, sentiment reversed and the market closed up 250 points, to 18,500.

That was 5,000 points ago,

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U.S. Economy Continues to Surprise to the Upside

This article appeared online at TheNewAmerican.com on Tuesday, October 31, 2017: 

One measure of how the U.S. economy continues to exceed expectations is the Economic Surprise Index published by Citigroup. It’s a tool that is used to measure how the economy compares to those expectations and, at the moment at least, it reflects the ebullience reported elsewhere. Any reading above zero indicates that the economy’s performance is exceeding projections. On Tuesday it hit 40 — its highest level since April.

That performance has repeatedly been reported in The New American and elsewhere, with these notable results:

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Aramco CEO Not Worried About American Frackers

This article appeared online at TheNewAmerican.com on Thursday, October 26, 2017:

English: Headquarters of Aramco Services Company

Headquarters of Aramco Services Company

Saudi Aramco CEO Armin Nasser told CNBC’s Squawk Box on Sunday that he wasn’t at all worried about American frackers, since they are concentrating on “sweet spots” — the richest fields with the highest returns — which can’t last forever: “The concentration that we are seeing today [by American frackers] is on the sweet spot of shale, and this will not last forever. You can concentrate for some time on the sweet spots and produce more oil. But ultimately you need to venture downward, and that’s where you have less quality and you require more cost to produce these barrels. Shale oil will contribute additional barrels [to world crude oil supplies], but it will all depend on the price of crude.”

Nasser no doubt was referring to data released last week that showed

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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:

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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:

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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

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Sen. Paul Votes No on GOP Budget Resolution, Supports Tax Cuts “for All”

Official portrait of United States Senator (R-KY).

Official portrait of United States Senator Rand Paul

This article appeared online at TheNewAmerican.com on Friday, October 20, 2017:

Senator Rand Paul’s vote against the GOP-backed budget resolution, which maintains the big-spending status quo, indicates that the senator is willing to go against his party’s leadership, even if it means he is the only Republican senator doing so.

President Trump tweeted early Friday morning, in celebration of the previous day’s Senate vote to pass the GOP’s budget resolution:

The Budget passed late last night, 51 to 49. We got ZERO Democrat votes with only Rand Paul (he will vote for Tax Cuts) voting against…..

And:

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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:

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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