Tag Archives: economics

Hype that Deadline

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Even The Wall Street Journal is in on the artificial…excitement…act. Congress has just a few days to pass a bill before June 5 deadline goes the subheadline.

It’s not much of a deadline, with revenue flowing in under existing tax laws that’s more than sufficient to pay as scheduled the principal and interest on our nation’s debt, and then the scheduled payments for our soldiers and veterans, and then the scheduled payments for Social Security and Medicare along with the scheduled transfers to the States for Medicaid, and then the scheduled payments for HHS, then DoT (for good or ill), then DoEd (for good or ill), then….

You get the idea.

There are only a couple of things of note should a debt ceiling deal not be enacted by 5 June (or whatever becomes Yellen’s deadline du jour). One is that much of the Federal government would have to shut down. That amounts to a big so what.

The other is that a number of Federal government contracts with private businesses would have their payments HIAed, to the detriment of those businesses. The failure to pay on time also would strongly negatively affect our economy and to a large extent our reputation around the world.

That last is a consideration worth taking very seriously, but not at the expense of enacting a debt ceiling deal, any deal. Republicans and Conservatives in the House need to stand firm. The present deal isn’t all that, but, to coin a phrase, think of the (Progressive-Democratic Party’s) alternative.

The deal also shouldn’t be stand-alone.

Some conservatives in the House and Senate have said they would oppose the deal because it doesn’t go far enough to limit federal spending….

One way to show they’re serious about that is via the as yet undeveloped Federal budget for the next fiscal year. Beginning Thursday (assuming today’s vote is up rather than down), the House—which is to say, the Republican caucus, since they’ll get no cooperation from the Never-and-Nothing-Republican Progressive-Democratic Party caucus—needs to begin work on that next Federal budget, a budget that codifies reduced Federal spending, reduced Federal tax rates, and reformed Social Security, Medicare, and Medicaid transfer payments, and have that budget passed and ready to send to the Senate the day after that body votes on the debt ceiling bill.

And then the House—the Republican caucus—needs to get to work on the dozen separate appropriations bills that are due by this fall.

There’s no need to wait on a President’s budget proposal (what President Joe Biden (D) tossed over the House’s transom this winter is not one that can be taken seriously) or to put up with Progressive-Democrat obstructionism and knee-jerk “No.”

Press ahead.

“We Object”

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Last month, against the backdrop of the Federal government approaching the debt ceiling, the House passed a bill that raised the debt ceiling along with some small steps toward controlling Federal spending.

Members of the Progressive-Democratic Party object and are trying to blame Republicans for the debt ceiling imbroglio.

Congresswoman Zoe Lofgren (D, CA) when asked who would be to blame:

It’s Congress’ job, only Congress can raise the debt limit.

Umm, the Republican-led House did. Where are the Progressive-Democratic Party-led Senate and the Progressive-Democrat who occasionally sits in the Oval Office?

Congressman Seth Moulton (D, MA):

It’s pretty obvious who to blame here—the extremist Republicans who control Kevin McCarthy. …we raised the debt limit three times under Trump because it’s the right thing to do for the country.

Umm, the Republican-led House did this time, too.

Congresswoman Alexandria Ocasio-Cortez (D, NY) insists that Republicans must

agree to raise the debt limit because, frankly, this is a very serious situation that nobody wants[.]

Umm, the Republican-led House did.

Congressman Jason Crow (D, CO):

The Republicans and Speaker McCarthy in particular need to come to the table in good faith and get this done….

All together now: umm, the Republican-led House did.

And, according to Crow:

We have a Republican-controlled House, and it’s a Republican-controlled House that’s brought us to the brink[.]

Passing a bill that raises the debt ceiling brings us to the brink. Sure.

Progressive-Democrat politicians would complain about being hung with a new rope, if the rope were offered by Republicans. Their intransigence regarding raising the debt ceiling is just the much more dangerous extension of their childish temper tantrums of holding their breath until they’re blue in the face if they can’t have their way.

The Right Answer

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I don’t often agree with Mark Zuckerberg, but in this case, I do, to the extent he has the courage of his words. The European Union’s Internal Market Commission has fined Meta $1.3 billion for the crime of sending the data its Facebook facility collects on European citizens to servers in the US.

The ruling raises pressure on the US government to complete a deal that would allow Meta and thousands of multinational companies to keep sending such information stateside.
Tech companies have been especially vulnerable to regulatory scrutiny absent such a deal. But most large international companies rely on a relatively free flow of data across the Atlantic….

No, the “pressure” applied is only what Biden and his staff choose to feel. Instead, this would be a good time for Biden and his to act like they care more about what benefits America than about what benefits other polities. The vast majority of those large international companies are, after all, American companies, and the requirement to keep that kind of data on EU servers is nakedly aimed at our companies. Apparently, the Commission thinks that EU companies are unable to compete without anchors tied around our companies’ ankles.

Zuckerberg is on the right track. In addition to appealing the Commission’s order (Meta must stop sending information about European Facebook users to the US and delete data already sent) and fine, he says:

Meta has said in securities filings that if ordered to suspend transfers, it may have to stop offering services in the EU….

All of our transnationals should take that tack. If the EU wants to compete only on the race to regulatory control, it should be left to play by itself. The race to be the most controlling administrative state is one our nation should happily lose.

This is where Biden backstops Zuckerberg. We’re waiting.

And one more, separate, thing. Biden also could backstop all of our transnationals and all of our domestic companies by getting the Federal government out of the business of spying on American citizens and rifling through private papers stored on American soil. On that, the EU has a valid beef.

Another Reason

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In an attempt to extort concessions from us and to drive a wedge between us and the Republic of Korea, the People’s Republic of China has banned certain local firms in key information-infrastructure industries from buying computer chips from the American company Micron Technology.

The next two largest chip manufacturers after Micron are the RoK’s Samsung Electronics and SK Hynix, each with chip factories in the PRC. The wedge is the effort to get those two to sell into the PRC in place of Micron.

The RoK, though, along with Samsung and SK Hynix would do well to take the hint from the PRC’s attack on Micron, especially given the near dependence of the RoK on the PRC market. They’re even more exposed to PRC extortion than we are, and what the PRC is attempting against Micron, it can attempt against Samsung and SK Hynix and against the RoK’s overall trade relations with the PRC.

They would be well disposed, as would we, to cut economic ties with the PRC and eliminate that avenue of extortion.

A Telling Graph

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This one via The Wall Street Journal in an article positing three scenarios regarding our economy and the existing debt ceiling negotiations. The graph, which the WSJ sourced to the Bipartisan Policy Center, is especially dispositive given the backdrop of Progressive-Democrat President Joe Biden refusing to negotiate over an already House-passed bill that raises the ceiling along with some initial, and small, spending reforms. That backdrop also includes Biden’s, his Progressive-Democratic Party Congressional cronies’, and journalism’s shrill panic-mongering over default if the debt ceiling isn’t raised.Notice that. Interest on our nation’s debt is tiny compared with the revenue flowing in for June; that means there’ll be no default if Biden and his Treasury Secretary obey our Constitution, the latter which makes the situation plain in the Preamble to Article I, Section 8:

The Congress shall have Power…to pay the Debts and provide for the common Defence and general Welfare of the United States….

There’s also plenty of revenue with which to make the scheduled principal payments on our debt. In addition to the lack of default, there’s provid[ing] for the common Defence: DoD, military salaries , and veterans’ benefits together, along with Homeland Security, are similarly tiny compared to the revenue coming in. Biden’s lies about cutting those veterans’ benefits in particular are exposed. Then there’s the general Welfare: these comprise the biggest share of that revenue—and there’s plenty of revenue with which to cover Medicare and Social Security as scheduled and with which to make the Medicaid transfers to the States.

The hard numbers will vary from month to month, but the revenues will be there to make the Constitutionally required payments.

What’s necessary to resolve the current situation are two things: Republicans need to stand firm on passing a debt ceiling increase only with spending reforms in order to reduce the need for future ceiling increases (along with, separately and subsequently, passing out of the House, where such things originate, a budget that reduces spending in the out years. There’s no need to wait for Biden’s foolishness of a sham budget proposal, ever), and for Biden and his Party cronies to get serious about negotiating specifics within that framework instead of blindly following an angry old man’s stubbornness.