Tag Archives: political economy

Needed Stimulus

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…or not. Mostly—nearly entirely—not.

real per capita disposable income in [Wuhan Virus situation-ridden] 2020 grew 5.5%

The Wall Street Journal noted that this is all before the December-passed $900 billion stimulus “took effect.” It’s also after that stimulus—which still hasn’t had much effect since much of that money hasn’t even been sent into the economy by Government.

What happened to the $2.6 trillion Government had already lobbed into the economy?

Preliminary data for 2020 show total savings for 2020 was $1.6 trillion higher than in 2019.  And that was before the $900 billion stimulus.

It’s also after those $900 billion….

Some folks are squawking that the money wasn’t really all that stimulative—it was saved rather than spent, which was the purpose of the stimulus. Some folks misunderstand. Savings do get spent—in the short term, if not immediately, on short-term needs and wants. Savings that aren’t quickly spent become deposits in financial institutions, where they join the pool of what economists call loanable funds—and get lent to borrowers, who then spend. Loanable funds might not be promptly spent, but they most assuredly do get spent.

Given this and the fact that the December stimulus remains uncommitted to the economy, why the urgency, and the need, for an additional $1.9 trillion in stimulus? According to the CBO,

The office said gross domestic product would return to pre-pandemic levels by mid-2021 and will continue growing until 2026 as a vaccine reduces the number of new infections and the need for social distancing.

And

Labor market conditions continue to improve. As the economy expands, many people rejoin the civilian labor force who had left it during the pandemic, restoring it to its pre-pandemic size in 2022[.]
The unemployment rate gradually declines throughout the period, and the number of people employed returns to its pre-pandemic level in 2024[.]

All that without the $1.9 trillion mess currently being rammed through Congress by Progressive-Democrats.

Why, then, do we need the additional $1.9 trillion national debt stimulus? We don’t. Progressive-Democrats do, or rather they want the money, so they can continue to virtue-signal. Those new trillions that Progressive-Democrats are insisting they’re going to jam down our throats, and rip from our children’s and grandchildren’s wallets (not that I mix metaphors or anything), in a strictly partisan fashion will be, in the longer run, nothing but destructive of all things economic.

There is urgency: to stop the train wreck that is this new $1.9 trillion package of froo-froo.

Costs

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In Monday’s Wall Street Journal Letters section, a letter-writer pooh-poohed the idea that the People’s Republic of China might actually invade the Republic of China and reclaim the island of Taiwan.

A decision by Beijing to invade Taiwan would create a major geopolitical crisis for China. Its extensive global trade and investments would be disrupted, creating economic problems. An invasion would result in an occupation. The people of Taiwan have lived in freedom and under the rule of law—they are not about to put on Chinese handcuffs and live in a communist society.

Houlihan made an all-too-common mistake that political and military analysts make in assessing an enemy nation’s motives and goals. Here, he assumed that the PRC cares about costs of regaining and reoccupying the island of Taiwan, just because we would have those concerns. In the end, if the PRC succeeds, it will have destroyed the Republic of China (without the US’ and others’ support, the “people of Taiwan” won’t be capable of resisting PRC handcuffs for any length of time) and regained the island.

And humiliated us, driving us from the western Pacific, opening up the Republic of Korea and Japan—hated enemies—to tacit, if not explicit, control, and putting Southeast Asia, which it has failed repeatedly in invading, under its thumb.

And gained control of the South China Sea shipping lanes, further strangling the RoK and Japan, and inflicting sufficient economic damage on us as to be able to control, in large part, our behavior.

Those may well be goals, in PRC eyes, worth spending a bit of political and economic capital to attain.

The PRC certainly is building, as fast as it can, a military capability designed for the purpose. The PRC also has the stated goal of replacing, in the near-to-medium term, us as the sole world power.

Defunding the Schools

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Senator Marco Rubio (R, FL) is proposing a stern response regarding schools that cannot reopen because the national teachers unions and the school districts’ associated teachers union locals refuse to send their members back to work. That refusal comes in the face of the fact that it’s safe for schools to reopen and teachers to report for in-person teaching, at the least for grades K-8, because the kids both don’t get sick from the Wuhan Virus, and they don’t spread any Wuhan Virus infection they may be carrying among themselves or to adults.

…I will be filing legislation to hold our nation to that promise [President Joe Biden’s campaign promise to reopen all schools within the first 100 days of his becoming president].
If a school continues to cave to the unions at the expense of their students, they should not receive funding. I propose that if a school refuses to offer students an in-person option by April 30, 2021, 100 days into the Biden administration, that funding should be rescinded and directed to school choice and the reopening plans of schools that are prioritizing their students’ needs.

It’s a necessary step, but it’s one that would hurt the schools as much, if not more, than it would the shirking unions and union members. Thus, it cannot be the only step.

Union locals that won’t send their members back to their jobs, back to the jobs unions insist on controlling, also must be decertified in their school districts, and those teachers who continue to refuse to report for their jobs—their duties—should be terminated for cause (for cause so that these shirkers would be ineligible for most unemployment-related welfare).

Who will teach the kids if the teachers are fired, some might ask. Those some should also ask, who’s teaching the kids now? And, no, virtual teaching for those grades is all virtual and no teaching and a complete failure, even after all these months of teachers supposedly learning how to teach those age groups virtually.

With the shirkers fired, the teaching slots would be free and the districts could call in substitute teachers already on their lists (or remove them from their lists if they refuse to report for duty); hire replacements; reallocate the now unused payroll funds to support home-school pods and individual home-schooling families; in the spirit of Rubio’s proposed reallocation of Federal funds, work with local voucher and charter schools—the list is extensive.

The unions and their members aren’t doing their jobs; they don’t need either compensation or to have those jobs. Of course, taking that necessarily local action requires more courage, more strength of character, than those districts targeted by Rubio’s proposed legislation have been showing—that’s part of the need for his bill.

That’ll be the Day

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Ford Motor Co is going to switch to Alphabet’s Android for the software to drive its cars’ displays, beginning in 2023. I can tolerate that, mostly, even if it is Alphabet.

Here’s the kicker, though [emphasis added].

Ford also intends to work with Alphabet Inc’s Google for cloud services to help the auto maker develop in-car features and manage the reams of data streaming from its vehicles.

And

Ford, GM, and others are now working with Google to offer Android as built-in software, a move that allows owners to download apps directly to their vehicle’s tabletlike display….
Auto makers are mobilizing to offer in-car services to customers that would allow the companies to collect recurring revenue streams….

I don’t need tracking software in my vehicles, and I don’t need mechanisms to suck ever more money out of me via my vehicles.

It’ll be a cold day in a warm place before I’ll let any car of mine connect to the Internet.

Full stop.

Taxing and Spending

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Progressive-Democrats are shocked—shocked—that folks want to hang onto their money rather than send in to Government. Thus, when State profligate spending and confiscatory tax rates were exposed by the Federal income tax reform that capped SALT deductions at $10,000, and folks on whom the cap had material effect decided to relocate their incomes, their money, and their lives to other States, Progressive-Democrats squalled most loudly.

The lawmakers say the cap, created in the 2017 tax law, punishes their constituents unfairly and pushes residents to move to low-tax states such as Florida. They are pitching the break as crucial to their states’ economic recovery.

Here’s New Jersey State Congressman Josh Gottheimer (D), for instance:

Folks have been moving away in droves since our state and local tax deduction was gutted. This is key to the health of our economy, key to keeping our state strong.

Never mind that those State governments could readjust their spending and taxing priorities.

No, it’s how dare those Government subjects leave and go where they can better hang onto the money that’s rightfully theirs. It’s that money doesn’t belong to the folks who earned it; that money belongs to those States, and the Progressive-Democrats of those State governments have only to carve out a pittance and toss it back to their subjects.

The arrogance of Progressive-Democrats and their contempt for us ordinary Americans knows no bounds.