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: Subsidies

Voters: Spending Cuts, Yes; Cutting My Programs, No

The Cato Institute’s massive 262-page study, Downsizing Government, by Chris Edwards, is the most recent offering of suggestions and recommendations for cutting severely the size, cost, reach, power and influence of the federal government in the lives of American citizens. In general, those citizens welcome such suggestions, according to Rasmussen Reports, which announced that two out of three Likely Voters they polled “prefer a government with fewer services and lower taxes rather than a more active one with more services and higher taxes.” Surprisingly this was supported by almost half of those Likely Voters who were also Democrats, along with 67 percent of unaffiliated voters, and 90 percent of Republicans voters.

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Military Spending: The New Third Rail

Jet Fighter Escorts

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When the Spending Reduction Act of 2011 was unveiled by House Republicans Scott Garrett (R-N.J.), Jim Jordan (R-Ohio), and Senator Jim DeMint (R-S.C.), U.S. News and World Report called it “eye-popping,” referring to the bill’s attempt to rein in government spending by $2.5 trillion over the next 10 years. Rep. Jordan, who is the Chairman of the Republican Study Committee (RSC), explained the need for such sharp cuts:

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Cutting Government: Where to Start

A small United States Postal Service truck see...

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Once Obamacare is repealed by the House, the attention of the 112th Congress will turn to the question of where government spending can be cut for the largest immediate impact. Several observers have weighed in with their thoughts, including Dick Armey and Matt Kibbe of FreedomWorks, who have an article in today’s online Wall Street Journal. After reviewing the fiscal hot water the republic is already in, and discussing attempts to re-set government spending back to “base lines” such as 2009, 2008, or 2007, the authors get down to business.

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The College Graduate Bubble: One Student’s Story

The entrance to the Gallatin School of Individ...

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Cortney Munna bought the lie, hook, line and sinker. The College Board has been selling it for years: “Over the course of a 40-year career, the average college graduate earns about 66 percent more than the typical high-school graduate.” At age 17, Cortney and her mother, Cathryn, decided they “would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it,” as researcher Ron Lieber told their story:

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Restoring the American Dream

1957... After the Prom - by Norman Rockwell

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The incessant and never-ending drumbeat of bad news about the economy was deftly summarized here, which concluded that 16 new records had been set over the past 12 months, “and they are all bad.”

These records included:

  • more than 100,000 homes were repossessed in September;
  • 41 million Americans are on food stamps;
  • 43 million are living in poverty;
  • Sales of new homes in July declined to the lowest level ever recorded;
  • Banks are holding an inventory of more than 1 million foreclosed homes; and

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Is Everything “Commerce?”

Chief Justice John Marshall established a broa...

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Law professor Robert Natelson wrote that because Congress has stretched its definition of “commerce” so far beyond that originally intended by the founders, “it is up to the people to recall the federal government to its constitutional limits.” Known as the “Commerce power,” Article I, Section 8 of the Constitution says that “the Congress shall have Power…to regulate Commerce with foreign Nations, and among the several states.”

And up until 1937, that power had been relatively tightly construed to mean what the Founders intended: to regulate trade—the buying and selling across state lines. By using false arguments, however, the Supreme Court during Roosevelt’s New Deal ruled in general that Congress was free to “control manufacturing, wages, agriculture, crime, mining, land use, firearm possession, and a [wide] range of other activities.”

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Deficit Commission Report: Deficit Reduction Lite

The Deficit Reduction Whopper

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The co-chairs of President Obama’s Deficit Commission, Erskine Bowles and Alan Simpson, announced many of the possible recommendations that could appear in the report of the Commission due December 1. They included just enough to arouse the ire of partisans on both sides, without making any serious inroads into real deficit reduction. Calling it a “politically provocative and economically ambitious package,” the New York Times said the initial proposals are “igniting a debate that is likely to grip the country for years.”

The co-chairs aren’t expecting much to happen but they claimed they wanted to “start the conversation” now.

Some of the proposals on the reduced spending side include:

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Bi-Partisan Effort to Cut Spending: A First Step Only

F-35 in flight

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When the conservative National Taxpayers Union (NTU) and the liberal U.S. Public Interest Research Group (USPIRG) announced their report “Toward Common Ground: Bridging the Political Divide to Reduce Spending,” the authors acknowledged that “while these proposals won’t get us all the way [to significantly reduced government spending], it is a start that could establish some common ground and make government more accountable in the process.”

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Chevy Volt Misses the Mark

Chevrolet Volt plug-in

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Now that the Chevy Volt, General Motors’ electric car, is about to arrive in selected dealers’ showrooms around the country, it has been getting a lot of press. Some are puff pieces, one of which appeared in USA Today, while others are much more critical.

According to James Healey of USA Today, the Volt “represents a staggering amount of engineering…which combines an electric motor…and a small gasoline engine to create a drive train that uses no gasoline for 25 to 50 miles, [and] then sips it.”

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Fiscal Challenges: A Way Out

"The Course of Empire: The Savage State,&...

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(This article is a follow-up to Conjuring Magic To Cover States’ Debts.)

Economist Niall Ferguson of Harvard wrote an article entitled “Complexity and Collapse” for the March/April issue of Foreign Affairs, a publication of the Council on Foreign Relations. Ferguson uses the visual image of a series of paintings by Thomas ColeThe Course of Empire, which currently hangs at the New York Historical Society, to illustrate his point that every society goes through five stages. He says that Cole “beautifully captured a theory of imperial rise and fall to which most people remain in thrall to this day.”

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Conjuring Magic To Cover States’ Debts

SACRAMENTO, CA - JULY 21:   A sign stands in f...

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The first warning about the possible bankruptcy of the town of Vallejo, California, was reported by the Associated Press on February 28, 2008, when Councilwoman Stephanie Gomes said, “Our financial situation is getting worse every single day. No city or private person wants to declare bankruptcy, but if you’re facing insolvency, you have no choice but to seek protection.”

Marci Fritz, vice president of the California Foundation for Fiscal Responsibility, blamed the action on promises made earlier by the council to the city’s employees concerning salaries and retirement benefits that the city no longer can afford. According to Fritz, these were promises made during economically flush times, and were due to the city council’s unrealistic expectations that those times would continue indefinitely.

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TARP Criticism Misses the Point

PaulsonHenry

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When TARP Inspector General Neil Barofsky criticized the Home Affordable Modification Program (HAMP) as being ineffective, he blamed the Treasury Department for not setting clearer goals for that part of the Troubled Asset Relief Program (TARP).

Only 390,000 homeowners “have seen their mortgage terms permanently modified since the $50 billion program was announced in March 2009. That is a small fraction of the three to four million borrowers who were supposed to receive assistance under the program.”

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Railroads, Robber Barons, and Unbridled Capitalism

Steam locomotive O k (O d )

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When Matthew Josephson wrote The Robber Barons in 1934, he tipped his hand as to his personal prejudice against the capitalists of the late 19th century:

Besides the young men who marched to [the Battle of] Bull Run, there were other young men of 1861 whose instinctive sense of history proved to be unerring. Loving not the paths of glory they slunk away quickly, bent upon business of their own. They were warlike enough and pitiless yet never risked their skin: they fought without military rules or codes of honor or any tactics or weapons familiar to men: they were the strange, new mercenary soldiers of economic life.

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National Debt at Tipping Point?

Tea Party

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The Wall Street Journal took another look at the $13 trillion national debt written about here last week and announced that, according to a study by economists Carmen Reinhart and Kenneth Rogoff, the economy has now reached the tipping point, the Reinhart-Rogoff Line, better known as the point of no return.

“Once a developed nation’s debt crosses it, its annual growth [tends to be much] lower.” The best estimate is that, once that point is reached, the GDP will be reduced by one-third, with little chance of regaining normal economic output for the foreseeable future.

In their book, This Time Is Different, Reinhart and Rogoff state:

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The Breakup of Ma Bell

Southwestern Bell logo, 1939–1964

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Ten years into the 20th century, the United States citizenry were still enjoying the afterglow of a remarkable generation of economic growth, innovation, and expansion.

Popular interests consisted of going to the movies, doing the Tango, and reading the Saturday Evening Post. A hands-off President, William Howard Taft, was in the White House, and people were enjoying clever inventions such as traffic lights, the refrigerator, and the telephone.

Alexander Graham Bell patented the telephone on March 7, 1876, but initially it was considered no more than a passing novelty. In fact, Western Union passed up the opportunity to purchase the Bell patents for $100,000.

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$13 Trillion and Counting

Tax Day Debt Protest 2009

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When former Comptroller General Bill Walker, who headed the U.S. Government Accountability Office, said two years ago that the “official” debt of the United States “is only around $10 trillion,” he wryly suggested that since this number was produced by “government accounting, which…allows one to ignore Social Security, Medicare and the new prescription drug benefit [it was like] ignoring rent, food and utilities in your household budget [and] it will lead to a few bounced checks.” However, he added, “Our real debt is about ten times higher,” or about $100 trillion.

At the time this was a breath-taking number, but Walker was just repeating what Richard Fisher, President of the Dallas Federal Reserve, had said just a couple of months earlier.

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Can ObamaCare Be Repealed, Nullified?

Repeal ObamaCare

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U.S. Representative Michele Bachmann (R-Minn.), who has earned a “Freedom Index” rating of 90 percent in the current Congress to date, has introduced a bill in the House to repeal ObamaCare. In her press release, Bachmann reminded her constituents that “the government already owns or controls about one-third of U.S. economic activity through the takeover of General Motors, the bankruptcy reorganizations of Chrysler, the partial ownership of two of the country’s largest banks in Bank of America and Citigroup, and the seizure of mortgage giants Fannie Mae and Freddie Mac as well as AIG. Taken all together, [with ObamaCare] we’re looking at half of the American economy in the grip of the federal government.” Bachmann said that it “will do nothing to spur economic growth … [but] will serve only as an obstacle to actual recovery and smother the spirit of innovation and freedoms that made this country great.”

Her bill is simplicity itself:

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Housing: Washington Only Delaying Inevitable

Foreclosure Sign, Mortgage Crisis

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Friday’s announcement of more intervention in the housing mortgage market will result in a deeper, longer, and more painful delay in the inevitable decline in housing prices that are necessary to clear the market. According to the Obama administration, the “broad new initiatives” will help troubled homeowners to refinance their existing mortgages with more favorable affordable ones provided directly by the government. Part of the new program is “meant to temporarily reduce the payments of [those] borrowers who are unemployed [but are] seeking a job.” In addition, the enhancements include inducements to “encourage lenders to write down the value of loans [already] held by borrowers in modification programs.”

In simple English, HAMP (the Home Affordable Modification Program), announced with great fanfare and high expectations early on in the Obama administration, isn’t working, and so more of the same is required.

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Free Markets, Deregulation, and Blame

Quarterly Journal of Austrian Economics

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Free markets, in the full sense of the phrase, exist only in the minds and imaginations of free-market economists from the Austrian School, such as Ludwig von Mises and Murray Rothbard.

The classic definition is simply a market without intervention or regulation by government. In truth, commerce in any developed country is always controlled to some extent by government. A free market requires the right to own property, which means that the wages, earnings, profits, and gains obtained by providing products and services to others belongs to the individual generating them. The assumption is that an individual with this kind of freedom would only make an exchange that gained him a benefit.

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Jobs Bill: The Law of Intended Consequences

London | 2009

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With great fanfare, the Obama administration celebrated its first policy victory of the year—the $17.6 billion jobs bill. Eleven Republican Senators helped push the bill through the Senate, 68-29.

The economically flawed and unconstitutional law provides employers an exemption from Social Security tax withholding through the end of the year on any employees added to the payroll who have been unemployed for at least 60 days. And if the employees stay on that payroll for at least a year, the employers would receive an additional $1,000 tax credit. In addition, the law spends $20 billion on federal highway construction and other public improvement projects.

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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 © 2021 Bob Adelmann