Tag Archives: economics

Idiotic

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Only Progressive-Democrats could come up with such an idiotic idea, and then demand to spend taxpayer—average American—money on it.

California Assembly Bill 2586 has been passed by the State’s Progressive-Democrat-run Assembly, and it would

mandate[] that illegal immigrants with no US work authorization should be given access to apply for and take jobs provided through taxpayer-funded universities run by the state government.

It now sits in the State’s Progressive-Democrat-run Senate.

This is yet another example of Progressive-Democratic Party politicians’ utter contempt for us average Americans.

Minimum Wage Law Consequence

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Recall that California has enacted one of the highest minimum wage laws in the nation, a $20/hr minimum wage inflicted on fast food restaurants operating in the State.

Now come the consequences, which any schoolboy limited to an allowance could have predicted.

Rubio’s Coastal Grill, a California Mexican restaurant chain, announced the closure of 48 restaurants in the Golden State amid rising business costs.

That’s one-third of the chain’s total operational restaurants in the Southwest, including a few left in California.

Earlier, in anticipation of the labor cost explosion, Red Lobster auctioned off—moved out of—5 California locations, albeit these were among a total of 50 nationwide of which the chain was divesting itself.

In other moves to cut labor costs, Pizza Hut franchises, especially Southern California Pizza Co, has discontinued most delivery services from its California-based restaurants, laying off nearly a thousand drivers.

Can Progressive-Democrats anywhere understand that a high minimum wage requirement—or a requirement at any level—prices unskilled job holders and unskilled job seekers out of those jobs? Can they understand that a wage at any level is vastly superior to no wage at all?

Or is it that Progressive-Democrats are cynical enough to seek to transfer unskilled workers out of jobs where they can gain experience, skills, second incomes, and upward economic mobility and into dependency on Government welfare—where they would represent votes to keep the handouts coming?

There’s a Hint There

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The farm bill just passed out of the House Agriculture Committee contains a provision barring the Secretary of Agriculture from increasing, on his own alleged authority, SNAP spending above the amounts provided for in the legislation:

[c]orrects egregious Executive branch overreach and disallows future unelected bureaucrats from arbitrarily increasing or decimating SNAP benefits.

Austin Scott (R, GA):

The Farm Bill includes protective language that prevents extreme changes to SNAP benefits without Congressional input and continues the cost-neutral status that the TFP [Thrifty Food Plan] has maintained for over 40 years.

The Progressive-Democrat Ag Secretary Tom Vilsack claimed, though, that

the proposal would amount to a roughly $27 billion cut to SNAP[.]

This is the AgSec’s confession that he fully intended to spend—on his own and without any Congressional spending authority to do so—at least those $27 billion above his authorized level. He’s not alone in this. Congresswoman Yadira Caraveo (D, CO):

…it is necessary that we go back to the negotiating table and remove this provision[.]

Senator Debbie Stabenow (D, MI):

It…does not have the votes to pass on the House floor. And certainly not in the Senate[.]

This is the budgeting and spending paradigm of the Progressive-Democratic Party: Congressional appropriations and allocations are mere suggestions, and they are to be disregarded whenever inconvenient to Party. After all, it’s only your and my money they’re spending.

There’s an election coming up. Maybe us average Americans should vote our tax dollars.

School Choice, Public Schools

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A letter-writer in The Wall Street Journal‘s Wednesday Letters section is opposed to Educational Savings Accounts that Texas parents could use to send their children to private schools.

School choice in Texas will benefit no one except those who already pay for private school. Moving to public funding of private schools will also tend to resegregate society. Our state-level elected officials are doing the bidding of billionaires in- and out-of-state who have other agendas than excellence in our public schools.

School choice will greatly benefit the children, especially those in families on Texas’ lower economic rungs, by letting them escape from failing public schools. Nor is it an either-or choice; the one leads to improvements in the other. School choice, from that competition, will greatly benefit those children remaining in public schools.

That success, far from increasing segregation, will contribute to decreasing it. The majority of those kids on the lower rung are from minority families. Being increasing their ability to compete academically, they’ll be better able to compete for jobs, and for promotions once employed, as adults. That more even competition is the stuff of desegregation.

The idea that no one but a few billionaires will benefit is just so much irrational hype.

He concluded with:

Let’s put public funding of private schools to a statewide vote.

We just did. In the Republican primaries and the runoffs in some of those primaries, public funding won very widespread support. We will again soon: school choice will be on the ballot again this November. Those State-level elected officials, elected in the primaries and will be elected in the general election, having campaigned on the matter, are much more likely to do the bidding of those who hired and will hire them—their constituents—than were Texas to maintain the status quo with its politicians in November.

Terminology…and a Solution

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Two questions sit before Congress over the coming year, as posed (correctly IMNSHO) by The Wall Street Journal in its headline and lede:

Republicans’ $4 Trillion Question: Should They Pay for Extending Trump Tax Cuts?

And

Republicans want to extend the Trump-era tax cuts that lapse after 2025. A big point of debate now: should they cover any or all of the $4 trillion cost—and how?

The terminology confusion is illustrated by the WSJ‘s change in wording from “pay for” in its headline to “cover” in its lede.

It’s long been my contention that it doesn’t cost the government anything to not get what doesn’t belong to it in the first place; there’s nothing for which government need pay. On the other hand, there’s the real world imbalance between tax collections and spending when the latter exceeds the former, as any grade schooler understands when he wants to spend more than his allowance will cover, whether he’s saved fractions of his allowance against an upcoming large expenditure or he’s spending as he gets. And, yes, the analogy is that direct.

There’s also the real world, empirically demonstrated, fact that within broad limits, the more money left in the hands of us average Americans and our businesses—the nation’s private economy—the more economic activity, now including government spending, there is overall, and from that increase, revenues to government, those tax collections, increase even in the face of reduced tax rates. The broad limit is the minimum of tax collections—the allowances we grant the government—needed to cover the constitutionally mandated spending requirements of paying the government’s debts, providing for an adequate national defense, and paying for the constitutionally defined items constituting the general Welfare.

Given the government’s current spending levels, that increased economic activity-driven increase in revenues to government won’t cover all of the government’s spending. That spending includes vast amounts of welfare spending. In the early days of our republic, we couldn’t afford any welfare spending, to the point that then-Congressman James Madison made a constitutional argument against helping Haitian refugees in the aftermath of an earthquake. From the Annals of Congress, House of Representatives, 3rd Congress, 1st Session:

Mr Madison wished to relieve the sufferers, but was afraid of establishing a dangerous precedent, which might hereafter be perverted to the countenance of purposes very different from those of charity.  He acknowledged, for his own part, that he could not undertake to lay his finger on that article in the Federal Constitution which granted a right of Congress of expending, on objects of benevolence, the money of their constituents.

The inability to identify the Article remains today, but that notwithstanding, our republic’s weal has improved to the point that we can, as a nation, afford a measure of welfare for our citizens (and for other nations, but that’s for another discussion). But not too much. The external threats to our nation have grown immensely, and so has the cost of our defending ourselves against them. Profligacy in spending, especially after WWII, has so far exceeded tax collections that our national debt has exploded, and the need to pay that down and then off, also has grown commensurately.

Spending outside those three constitutional mandates needs to be greatly cut back. There are three types of that extra spending that come to mind out of the myriad of them. These are Social Security, Medicare/Medicaid, and infrastructure.

I’ve written before about those first two; I’ll only summarize here: privatize Social Security and Medicare, which will be deucedly expensive in the transition, but that cost will only get worse with delay—and doing nothing will itself result in a 25% cut in Social Security payout, anyway, within the next 10 years, and an even more severe cut in Medicaid, if after a longer delay. Medicaid transfers to each of the several States should be converted to block transfers on an annually declining basis until the block grants have bee eliminated altogether. Medicaid is after all, and as it should be, a State-run program.

Regarding infrastructure, all Federal transfers to the States should be on a matching basis, with the States required to make the first and then sustained moves: no money should flow from Federal coffers to a State until the State has let contracts with the builders; ground has been broken; and concrete, publicly measurable and assessable progress has been made in the building. The match itself should be no more than 50% of what the State has spent and subsequently spends in accordance with its contracted schedule, and those subsequent Federal transfers should flow only after the State has spent its own citizens’ tax remittances on the State’s contracted schedule.

None of that is possible, though, without clearing up that terminology confusion. As long as politicians think tax monies remitted to government are owed to and are the property of government, they’ll spend and tax without limit.