Tag Archives: political economy

PRC Pyramids

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The Egyptians invested in pyramids, but those were concrete, physical edifices that satisfied then-national needs.

The People’s Republic of China and its builders invested in a different sort of pyramid, and those ephemeralities are fading into the mists at great cost to the suckers investors.

First, it was the PRC’s Evergrande, with its serial defaulting on its debt obligations. Now it’s the PRC’s Fantasia, reneging on $US206 million worth of its own bonds. It seems likely that others of the PRC’s builders will follow, unless the PRC government men decide to interfere and require different outcomes, regardless of economic and fiscal reality.

I mentioned pyramids. These builders finance their future operations in very large part by selling apartments before they’re even built. That puts their borrowings at risk, unless they can come up with more money—which they do in large party by selling yet more unbuilt apartments.

Bernie Madoff, if not exactly a piker in comparison, certainly didn’t accomplish this much.

Domestic Terrorists

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They aren’t the parents who object, however vociferously, to the misbehaviors of school boards, even though the National School Boards Association and Biden-Harris’ Attorney General Merrick Garland overtly claim so.

On the contrary.

If Garland—and through him, President Joe Biden (D) and Kamala Harris (D) of the Biden-Harris administration—think mothers and fathers vociferously protesting the misbehaviors of school boards are domestic terrorists, then he needs, also, to investigate those school boards’ acts of terrorism.

The school boards’ terrorism of actively abusing children by demanding they wear masks all through the hours of school, which various pediatricians and child development experts have shown stunts those children’s development by strongly inhibiting their socialization and delays their ability to learn the nominal subjects of their lessons.

The school boards’ terrorism of forcing those children to hate themselves and each other over the color of their skin.

The school boards’ terrorism of actively abusing children by demanding they be injected with experimental and unapproved for routine use vaccines.

But, no, nor Garland nor Biden nor Harris have any interest in protecting the rights—or the obligations—of parents or of protecting those children.

Those Progressive-Democrats are interested only in extending their political power and stifling those with the impudence to demur from their abuses.

More Biden, et al., Disingenuousity

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On the matter of raising our nation’s debt ceiling, Senate Minority Leader Mitch McConnell (R, KY) and the Republican caucus in the Senate have been crystalline for months: Progressive-Democrats in both the House and the Senate have the votes to raise the debt ceiling by themselves, and they have the responsibility to do that, given their decision to pass spending bills with no Republican input, without even talking to Republicans in any serious fashion to seek their input on spending.

Now comes President Joe Biden (D).

He called on Republicans to “get out of the way” and let Democrats quickly raise the debt limit. Asked whether he could guarantee that the US would be able to raise the debt ceiling before the deadline, he put the onus on Republicans: “No, I can’t. That’s up to Mitch McConnell.”

Of course, it’s impossible for the Republicans, being the minority party in both houses of Congress, to be in the way in any shape or form. They can’t stop the Progressive-Democrats from raising the debt ceiling; they don’t have the votes.

All that’s required is for Senate Majority Leader Chuck Schumer (D, NY) and his Progressive-Democrat caucus, along with Speaker Nancy Pelosi (D, CA) with her Progressive-Democrat majority, to move the raise along through reconciliation—either as a stand-alone bill or by each house passing the extant reconciliation bill, then adding the debt ceiling raise during Conference Committee discussions. Bills coming out of Conference are passable via simple majority votes—no Senate filibusters on Conference-agreed bills.

The latter move, in particular, would let Schumer put Senators Joe Manchin (D, WV) and Kyrsten Sinema (D, AZ) on the spot, forcing them to choose between reneging on their pious promises to not vote for a $3.5 trillion bill they say is too much to spend all at once and whose breadth of content they say is too broad in order to vote for a debt ceiling raise, or sticking to their promises and thereby vote down the debt ceiling raise.

Nor would that jeopardize a subsequent clean debt ceiling raise bill, should Manchin and Sinema prove themselves good for their promises: the Senate’s Parliamentarian has already said that the Senate’s two reconciliation bills per session limit would not be applicable. A third bill, dedicated to passing a debt ceiling raise, could be done functionally as reconciliation by “modifying” the second reconciliation bill.

Biden, Schumer, and Pelosi know all of this full well. They’re just trying to duck their personal and Party responsibilities.

Siding with the Extremists

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President Joe Biden (D) not only advised his Progressive-Democrats in the House to hold off on trying to pass the “infrastructure” bill. This is the bill, remember, that Speaker Nancy Pelosi (D, CA) had so solemnly promised the more moderate members of Party she would bring to the floor for a vote on 27 Sept. Then after breaking that promise, she promised to have the vote on 29 Sept, then promised 30 Sept, then 1 Oct, then canceled the vote altogether, for a total of four solemn cynical promises broken.

No, that wasn’t all for Biden. He then made his own promise late Friday to the House Progressive-Democratic Party caucus in a closed door meeting in one of their House conference rooms. The “infrastructure” bill

ain’t going to happen until we reach an agreement on the next piece of legislation[.]

That next piece of legislation is the $3.5 trillion reconciliation bill he and his fellows are so anxious to get enacted.

With that commitment, Biden repeated and renewed the promise he made last June to not sign the “infrastructure” bill until he also had his reconciliation bill on his desk. With that renewed commitment, Biden broke earlier, campaign and inauguration speech promises to unite our nation and to govern in a bipartisan manner.

Biden has, instead, openly and irretrievably united with the most progressive of the Progressive-Democrats—the extreme Left of a Party that already has gone far Left.

Wrong Answer

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Treasury Secretary Janet Yellen wants Congress’ authority over the debt ceiling abolished.

She argued Congress makes the decisions on taxes and spending, so it should also provide the ability to pay those obligations.
“If to finance those spending and tax decisions, it’s necessary to issue additional debt, I believe it’s very disruptive to put the president and myself, the Treasury secretary, in a situation where we might be unable to pay the bills that result from those past decisions[.]”

This would, of course, mean that the concept of a debt ceiling itself would be removed.

Wrong answer.

The right answer, which would make a debt ceiling unnecessary (although not abolish it), is to limit spending to within revenues.

Of course, to prevent Congress from running away with tax rates, as the current Progressive-Democrat-run Congress is attempting to do, it would be necessary to limit Congress’ ability to raise tax and fee rates or to create new taxes or fees. One way to achieve that would be to define a priori the specific purpose of each individual tax or fee increase and each individual new tax or fee and then put each one, individually and separately, to a national plebiscite. If the plebiscite rejects the proposition, then the associated spending cannot occur and existing spending must remain within existing revenues.

A fillip: financial planners recommend individual families each maintain a rainy day/emergency fund of some months’ worth of expenses. Texas, and some other States, also do this at the State level. It would be useful if Federal spending were required to be limited to 90% of Federal revenues until a national level emergency fund were accumulated—say an amount equal to a year’s worth of established Federal spending. A year, rather than the several months that planners recommend for individuals, because of the Federal government’s empirically demonstrated profligacy.

Another fillip: index the size of the Federal Emergency Fund to positive inflation as measured by the Producer Price Index or its successor. Positive inflation: the required level of the FEF could never decrease, even in a deflationary environment.

Of course, this would require a Constitutional Amendment in order to be permanent.

Oh, and never mind the horror of Yellen being inconvenienced by the tasks of her job.