Tag Archives: spending

Cent Wise and Euro Foolish

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Barron’s has an example, centered on Europe’s very own Wuhan Virus situation.

The EU economy shrank last year by 6.3%, according to the latest EU forecast, published on Thursday. That amounts to about €877 billion ($1.1 trillion) of lost gross domestic product last year. Or about €17 billion a week.
Compared with this, the total bill of vaccines procured until now by the EU—based on contracts signed, and vaccine prices confidential in principle but tweeted last December by the Belgian health minister—would amount to €20.5 billion.

The finally agreed vaccine bill amounts to a bare day-and-a-half over a week’s lost GDP—and how many lives.

While Barron’s writes its own price-is-no-object foolishness—When dealing with the pandemic, vaccines are quite literally priceless—the EU plainly wasted ‘way too much time, money, and lives, quibbling over relative pennies.

An outcome of the European Union’s foolishness:

20% of the UK population has already received at least a shot of one of the three [EU- and British-]approved inoculations—the Pfizer-BioNTech, AstraZeneca-Oxford, and Moderna vaccines. More than 13% of Americans are in a similar situation—but barely more than 4% of Europeans[.]

Yet More Spending

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This time on “child care” checks written by the IRS.

The [House Progressive-Democrats’] 22-page bill proposes that the Internal Revenue Service provide $3,600 to every child under the age 6 and $3,000 per child ages 6-17 to families earning less than $75,000 per year, or couples earning less than $150,000. The payments would be distributed monthly, over the course of a year, beginning this July.

House Ways and Means Committee Chairman Richard Neal (D, MA) compounds the cynicism of this move:

The pandemic is driving families deeper and deeper into poverty, and it’s devastating. We are making the Child Tax Credit more generous, more accessible, and by paying it out monthly, this money is going to be the difference in a roof over someone’s head or food on their table[.]

That’s plainly not true. The Wuhan Virus situation has done/is doing no such thing. Governments at a variety of levels of jurisdiction are driving, devastatingly, families deeper and deeper into poverty with those governments’ mandates to close down all businesses, churches, and other public gathering places, thereby depriving families of their jobs, without any regard to the uselessness of those lockdowns.

We don’t need any IRS checks. We need our economy reopened so our businesses can go back to making and selling, our citizens can go back to work, and our families can go back to making their way.

At least the bill is amazingly short and blatant, though.

“Employment Levels”

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Candidates to replace term-limited Bill de Blasio (D) as mayor of New York City are coming out of the woodwork like the city’s rats. The opening sentence of a Wall Street Journal article covering their plans to “job recovery” is riddled with irony.

More than three dozen New York City mayoral candidates are vying for one of the toughest jobs in the country: leading the nation’s largest city back to pre-pandemic employment levels while trying to find the funding to do so.

The candidates—the city—do not need to “find the funding” to put folks back to work. In an actual free market environment, private employers provide the funding for their own employees. They get that funding from private citizens buying those employers’ goods and services. The city—any government—is a cost center for every business in it jurisdiction, from the taxes the city exacts (some of them actually legitimate charges) to the regulations (very few of them serving any legitimate purpose, being merely revenue centers for the bureaucracy charging them) it imposes.

Returning New York City to pre-Wuhan Virus situation levels is breathtakingly cost-free—and revenue-generating for the city: get out of the way, let the businesses reopen so folks can go back to work, let schools reopen so kids can go back to school—reducing both private and public medical costs—and letting even more folks go back to work.

It’s just that straightforward. It shouldn’t be as hard as even well-meaning, but overthinking, politicians make it.

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.

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.