Tag Archives: spending

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.

Some Progressive-Democrats…

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…are beginning to rue the consequences of their Party’s no borders policies. But only a couple seem willing to say so out loud. The Chicago City Council’s Budget and Government Operations Committee voted 20-8 to move Progressive-Democrat Mayor Brandon Johnson’s wish for $70 million for illegal alien support to the Council floor for debate and voting up. (Aside: is there political featherbedding here? 28 Council members on the Budget Committee out of 50 members on the whole Council.)

Progressive-Democrat 29th Ward Alderman Chris Taliaferro is one of only two of those eight willing to demur from this vocally.

We are not taking care of our own. We have all but forgotten the residents on the West Side and South Side.

The 9th Ward’s Progressive-Democrat Alderman Anthony Beale is the other one choosing to speak up.

Here we are begging for more money when we don’t have money for the people here. We don’t have money for after school programs. We don’t have money to help our kids get off the street. Yet, we would just blow money left and right. That’s a fundamental problem.

Wolf pups in sheep’s clothing, bleating in the wilderness.

Timid is as Timid Does

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Progressive-Democrat President Joe Biden is upset that Russian President Vladimir Putin attacked, again and extensively, Ukraine’s power infrastructure. He said, through his National Security Council’s Spokesperson Adrienne Watson,

This bombardment—part of a series of Russian attacks on Ukraine’s critical infrastructure— is a terrible reminder of Vladimir Putin’s efforts to break the spirit of the Ukrainian people and plunge them into darkness[.]

Here is our President yapping like a porch dog from the safety of his NSC porch, along with (to mix metaphors) furiously wagging his finger at the barbarian.

While doing precisely nothing material to help the Ukrainians.

Biden is, for instance, holding up transfer of badly needed air defense systems, including Patriot and Stinger, while only “soon” will F-16s start arriving in Ukrainian inventory. Biden has chosen to do nothing regarding delivery of drone and anti-drone systems to Ukraine, forcing them to use those expensive Patriots they do have on far cheaper inbound drowns and missiles. Biden has chosen to do nothing regarding paying for the transfers he has deigned authorize, the lack of which pay-fors are at the core of Republican objections to further expenditures in favor of Ukraine.

Subscriptions

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A Wall Street Journal Finance writer wrote an article bragging about how all the subscriptions he had that he canceled pays for his lease on a Tesla Model Y. The key takeaway for me was the vast number of subscriptions this Finance writer had accumulated. This screen shot shows the large number of subscriptions that he canceled (or in the case of SiriusXM, the price cut that he negotiated):

And he still has all of these sucking money.

We still have Disney+, Hulu, Max, the language-learning service Duolingo and, of course, Spotify. We get three print newspapers delivered and many more digital news subscriptions.

It’s certainly true that a finance writer could easily need all those news outlet subscriptions, but who has that many extraneous subscriptions? Especially subscriptions to which, as this writer freely admitted in his article, they don’t even listen to or watch for weeks, months, on end.

My wife and I have an online subscription to the WSJ, a two-line subscription to Verizon for our cell phones, and a Spectrum cable subscription that provides us with our TV (no premium cable channels; it’s not quite the most basic bundle, but it’s pretty bare bones), Internet, and landline. There is a double potful of online news outlets to which we can link, for free, through our browser, and there are libraries in the nearby, also. And books. We read those for entertainment, edification, and straight up education. We read them in print version: those libraries, brick-and-mortar bookstores, and online booksellers.

We’ve thought about cutting the landline out of our cable subscription, but it’s proved too useful as a honeytrap for all the spam calls that come rolling in. As it happens, we have an answering machine capability on our landline phone that plays any messages being left as they’re being left. On those rare occasions when we recognize the voice and are interested in talking to the person, we can go ahead and pick up.

Oh, and he had this in his brag about having saved enough to cover the cost of his car:

…the cost [of his Model Y] dropped to $53 for a car we desperately needed.

He might have desperately needed a car, but he only desperately wanted the Tesla.

Costly Support

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A bunch of Republican Congressmen object to the increasing cost of the US’ support for Ukraine’s fight against the Russian barbarian, and barbaric, invasion.

From the WSJ‘s front page teaser to the article:

Some lawmakers and a growing share of the American public are skeptical about how much US taxpayers should continue to fund Ukraine’s defense.

It’s a valid concern, but those Republicans are missing the larger problem. The cost has been, to a very large extent, artificially inflated by the Biden administration’s conscious decision to slow-walk, and on too many occasions to outright bar, delivery of the weapons Ukraine needs at the time the Armed Forces of Ukraine needs them and in the amounts the AFU needs them so they could defeat the Russian invasion and drive the barbarian back out much more promptly.

Dragging the war out, the way Biden has done and continues to do, not only runs up the financial cost, it runs up the casualty count of Ukrainian soldiers and Ukrainian civilians.

And it’s been dragged out—those weapons deliveries hold-ups—for two reasons. One is Biden’s timidity: he’s terrified of provoking Putin.

Here is General Philip Breedlove, former SACEUR Commander, quoted by Edward Hunter Christie:

Modern manoeuvre warfare, just like we taught the Ukrainians, starts with battlefield air superiority. Have we given Ukraine what they need to establish battlefield air superiority? No. No, we have not. And so you can be critical all you want, you just sort of demonstrate your lack of understanding of what manoeuvre warfare is and how it begins, and so let me just add one other big example. Manoeuvre warfare, and I would tell you especially American commanders, counts on long-range precise fire. We fight to hold the the enemy at risk before [stresses], before he brings his force to bear on us. We use long range precision strikes to strike them and then if they still persist in attacking, to strike them in depth. In depth and to strike them all along their lines of communication and supply lines before they can actually meet us, even after they begin an attack. And then we use long range precise strike to hold all the transhipment points, airfields and everything else, at risk when the fight is going on. Have we given Ukraine the ability to do that? The answer is no, we have not, and worse yet we in the West have forbidden Ukraine from using any of the kit that we give them to strike deeply and to hit the enemy before the enemy can bring his forces to bear on Ukraine. We have built sanctuary all the way around Ukraine. On the map, from Belarus in the Northwest all the way around through the East into Russia, all the way into the South, into the Black Sea, we have forbidden Ukraine from using our kit to strike into Russia and so [it] amazes me that people expect them to do manoeuvre warfare under that. So here’s my answer that was all to set the stage for my answer: we should give Ukraine what we would take to the battlefield. We should give Ukraine what it needs to set conditions on the battlefield like we would set conditions on the battlefield. We’re expecting Ukraine to fight a world superpower shorthanded and certainly demonstratively short of the kind of kit that we would use to fight that superpower.

I think, though, that Christie is being generous: this administration failure isn’t so much do to any ivory tower theoriticals so much as it’s due to Biden’s terror of Putin’s harsh rhetoric.

The other is arrogantly stupid: DoD Know Betters insist they know what Ukraine needs better than the AFU does, even though the AFU is the force actually in field facing the barbarian. These Wonders of the Puzzle Palace, comfortable and safe in their summer and winter climate-controled offices, are so full of their precious theories–Christie is correct to this point–that they have no contact with the realities of the battlefield inflicted on the Ukrainians by the barbarian.

Ukraine might not survive another year of Biden’s timidity or of Republicans’ misapprehension of the problem.

That’s the true cost.