Category Archives: Economics

Miscellaneous economy stuff

Don’t Mention Cutting Spending

Posted on by
Reply

Don’t you dare. The newly proposed Australian budget contains some tax cuts here, some tax structural changes nearby, and some tax increases there.

The tax cuts and structural changes are small steps in the right direction. The tax increases, though, are rationalized in this way: Saul Eslake, ex-Chief Economist at Merrill Lynch in Australia is claiming, as paraphrased by the WSJ:

If the process of reform is to be extended from here, policy makers should consider increasing and/or broadening the country’s goods-and-services tax to repair the revenue side of the federal budget and help ease the significant tax burden faced by wage earners and companies[.]

“Repair the revenue side?” What’s to repair? It isn’t the government’s money; it belongs to the good citizens of Australia. Their government only takes the money away from them; any seeming shortfalls in collections are nothing less than more money in those citizens’ hands.

And this from Shane Oliver, AMP Ltd‘s Head of Investment Strategy and Chief Economist:

If you do one reform without looking at income tax, then you miss the bigger picture[.]

There are two things wrong with these criticisms. One is the utter lack of justification for the amount of money the government collects through its taxing regime, whether current or as proposed. That “need” is simply assumed as received wisdom. The other is the equally utter lack of consideration of government spending cuts. The supposed necessity of current (or increased) spending levels also is simply assumed as received wisdom, albeit the spending is occasionally weasel-wordedly justified by announced social need—but even that isn’t seriously justified, merely announced from on high.

If Australia—and others, including us—want serious, durable prosperity, it’s necessary to cut taxes and cut spending further. That’s not austerity, no matter how hysterically the Left generally proclaims it to be. Leaving more money in the hands of the citizens is not austerity being inflicted on them, it’s their prosperity being restored to them. And that’s the bigger picture that Oliver is missing.

An Additional Reason

Posted on by
Reply

The Wall Street Journal‘s editors took notice of President Donald Trump’s (R) waiver of the Jones Act, which mandates sea shipments of goods between American ports be done by American-built, -owned, and -crewed ships. The waiver has been a resounding success during the disruptions of the Iran war and Iran’s blockade of the Strait of Hormuz. From this, the editors suggested that

if the Trump Administration thinks its waiver is helping oil supply during the Hormuz crisis, why not make that success permanent by repealing the Jones Act?

That’s an excellent suggestion, and it’s bolstered by a much more cogent rationale, as well, peripherally touched on by the editors. The purpose of the Jones Act when it was enacted was to stimulate American shipbuilding. It’s only necessary to observe Trump’s lately effort to push a hard acceleration in building dual use cargo ships to both expand our commercial shipping fleet in competition with the People’s Republic of China’s burgeoning commercial fleets and to facilitate the Navy’s ability to move supplies, equipment, and reinforcements around the world into combat areas. In all those years since this law was passed, there has been zero growth in our shipbuilding capability.

It’s past time to rescind the Jones Act.

He’s Right

Posted on by
1

But not in the way he thinks. Joe Calvello, New York Mayor Zohran Mamdami’s Press Secretary, said this:

That does not negate the fact, however, that our tax system is fundamentally broken.

“That” was referring to Ken Griffin, his high-value secondary home in New York City, and his supposed failure to pay a deliberately, cynically undefined “fair share” of taxes. After all, Calvello says that the tax system “rewards extreme wealth while working people are pushed to the brink….”

“The tax system,” the city’s, the State’s, and the nation’s are, indeed, broken. The fix, though, is not to constantly raise taxes on those Evil Rich like Griffin. The fix is something so inconceivable to Progressive-Democrats, including Mamdani, that they can’t even say the words: lower tax rates on the middle class and poor, and more broadly, restructure the tax system and its taxing targets so that those middle class and poor pay the same low tax rates on the same things as the Evil Rich do.

Couldn’t Possibly Be

Posted on by
Reply

It seems that more than 3 million folks once getting “Federal food aid” have stopped getting that aid. This is due, primarily, to tighter work requirement restrictions:

Under the new rules, able-bodied adults aged 18 to 64 without children under 14 must work, volunteer or participate in approved job-training programs for at least 80 hours a month. The previous age limit for work requirements was 54, and allowed exemptions for adults with children under 18.

Naturally, the Left is engaging in its manufactured angst over this.

Colleen Heflin, a professor at Syracuse University who studies food insecurity, said larger state drops like Arizona’s were “beyond anything we’ve ever seen.” Heflin said she was concerned it would result in vulnerable Americans not getting enough to eat.
“These large state drops in SNAP caseloads represent a fundamental restructuring of the food-assistance safety net,” she said. “We should expect to see a surge in food insecurity and its related negative consequences at new levels.”

Of course. The large drop couldn’t possibly be an indication of the bloat in the program and the number of ineligible folks taking the aid “beyond anything we’ve ever seen.”

And there’s Bruce Meyer, a University of Chicago Harris School of Public Policy Professor, who accidentally let that cat out of the Leftists’ bag:

Most of the people who are getting food stamps are needy. When you’re cutting that many people, you’re probably cutting into some people who really do need the benefits.

It certainly should be “most,” and it should be far more than just that. Only cutting “some” who really need the benefits is a strong indicator of the amount of bloat that’s been present.

A Problem of their own Making

Posted on by
Reply

In a Wall Street Journal article centered on the People’s Republic of China’s setting up trade-centric “retaliatory tools,” there’s this bit in the middle of the piece:

The rules could put US and other Western companies in a bind: they need to comply with US restrictions on trade with China and often want to reduce their reliance on Chinese production, yet such actions expose them to punishment by Beijing and even possible expulsion from the world’s most important manufacturing hub.

Of course, if those companies weren’t in the PRC in the first place, the PRC couldn’t “punish” them. They’ve had plenty of time to move their supply chains and businesses out of that nation and plenty of warning regarding the necessity of doing so.

Still, there remains no time like the present to take serious heed and get moving on those adjustments.