Tag Archives: spending

There’s an Answer to This

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It’s simple, straightforward, and deucedly politically difficult given the timidity and/or self-serving political power seeking of too many politicians to carry out. The lede and second paragraph laid out the problem:

As the Department of Government Efficiency and the One Big Beautiful Bill Act make painfully clear, any entity relying on federal funds for fiscal stability had best reconsider its future.
Recently released US Census Bureau data on federal funds flowing to states reveal that in 2023 the average state relied on federal sources for 37% of its revenue—nearly double the 1990 average. Some states were far more dependent, like Arizona (49%), Alaska (45%), Wyoming (46%), and Louisiana, which counted on federal support for more than half its budget. States have…made themselves vulnerable to the ideological proclivities of presidential administrations.

And this:

More pernicious are the ways federal agency ideologues hold those funds hostage to their agendas. …
A massive amount of federal spending isn’t even going to projects most people care about. It funds the priorities of federal agency bureaucrats.

The solution is to identify the total amount of Federal fund transfers to each State in 2026 (or 2027, but no later). Call that baseline year Year Zero. In Year 1, make a single, no strings attached block grant to each State in the amount of 90% of Year Zero. In each subsequent year, reduce the size of the block grant by an additional 10% of the Year Zero amount. In 10 years, there will be no more Federal funds transferred to a State, and all the States will be free of Federal strings on their own spending and taxing imperatives.

This would have the additional benefit for the citizens of each State in that State government spending and taxing would be subjected to greater citizen visibility and discipline.

The only time States need Federal funds transferred is during a State- or region-wide emergency, and those funds should be readily available—as they are currently, and potentially the more so with the cessation of unnecessary transfers done currently on a just because and it’s always done basis.

NATO’s Promises

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A NATO pledge. President Donald Trump (R) appears close to getting NATO nations to pledge to raise their NATO-related defense spending to 5% of each nation’s GDP, which would be a marked increase in those nations’ spending.

I question the value of those nations’ promises. Fully a third of NATO’s member nations already have, and are, welching on prior commitments to spend money on NATO-related expenses, for all that Trump’s open questioning of the value of the alliance over its freeloading on American treasure and blood has contributed to an increase in the number of nations that spend adequate amounts on NATO (from five or six!) to the current roughly two-thirds.

The value of a new, and replacement, arrangement centered on the US and the Three Seas Initiative nations is looking better and better.

Misguided Categorizations

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The Wall Street Journal has them in its article concerning some outcomes of the just-passed House version of the budget reconciliation bill. The headline reads

The Biggest Losers in Trump’s Megabill

Some Medicaid users are categorized as losers. House-passed work requirements would mean some few millions would lose Medicaid coverage unless they show they’re working part time or are actively seeking work or they are volunteering. Separately, nearly a million and a half illegal aliens would lose coverage. It’s hard to see how these are losers. Those going back to work rather than coasting on our taxpayer handouts stand to gain morally and in the medium- and longer-term economically by having jobs and being able thereby to move up the economic ladder. Those volunteering will do much good for their community while gaining—if they volunteer seriously—valuable work experience. The illegal aliens being denied coverage can’t be losers, since it’s not a loss to no longer receive that to which they were never entitled in the first place.

Older food-aid recipients are categorized as losers from those same work requirements, here being extended to age 64. This is an especially wrong categorization since these folks actually gain in two ways. The first and immediate way is from the same gains as just above, for all that the longer-term part is absent. The second way these folks actually gain, though, directly addresses that longer term: by working those added years, they’re plussing up the Social Security payments they’ll receive when they actually retire.

Clean-energy projects are categorized as losers. The House-passed bill cancels these projects’ tax credits on an accelerated (relative to the originally proposed glacial) schedule. This time, the projects really are losers, but our economy gains enormously by cutting off those money wasters and by reducing the energy production and market distortions such credits have created.

Some student-loan borrowers are categorized as losers. The House-passed bill would put them on one of two offered repayment plans. This actually makes the borrowers winners, since it makes it possible for them actually to repay their loans and get those yokes off their necks.

EV/hybrid car owners and buyers are categorized as losers. Here, as with clean energy, the battery car buyers will lose out on subsidies, but our economy as a whole—and ultimately those battery car buyers—will gain sharply. These wastes of our taxpayer money will stop, and those subsidies’ production and market distortions will disappear.

While it’s true enough that the House-passed bill has much for which to be criticized—it doesn’t reduce tax rates enough, and it doesn’t cut spending nearly enough—these five items aren’t on that list.

Tariffs and Economic Growth

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The good editors at The Wall Street Journal spent a lot of ink and pixels decrying President Donald Trump’s (R) tariff moves. They saved the money bit for the end, though maybe not in the way they intended.

The best response to the warning from the first-quarter GDP decline would be for Mr Trump to call the whole tariff thing off. Short of that, settle for 10% across the board and call it a day. If that’s too much of a come-down, Republicans will need to pass a pro-growth tax cut and accelerate their deregulatory push as their best chance to liberate the economy from its tariff kidnapping.

Those first two sentences are irrelevant, whatever one might think of Trump’s tariff moves. Republicans need to pass a pro-growth tax cut and accelerate their deregulatory push—and pass serious spending cuts—independently of any tariff moves.

My Irony Meter…

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…is pegged. In their letter published in The Wall Street Journal‘s Friday Letters section, David Wippman and Glenn Altschuler of Hamilton College and Cornell University, respectively, object to comparisons of Harvard to Hillsdale College, even as they misleadingly mischaracterize the latter’s relationship with Federal dollars (writing that Hillsdale has for decades refused federal funding, when the fact is Hillsdale has never taken Federal dollars at any time in its 180 years of existence).

The letter writers acknowledge that Harvard’s taking Federal dollars makes it “vulnerable” to Federal pressure, citing supposed risks to Harvard’s research capacity. In truth, Harvard still could conduct effective research, were it to get serious about the bigots and terrorist supporters entrenched in its student and faculty and staff populations.

That brings me to the irony of their letter.

[I]t is absurd to compare this Christian college with 1,700 students and 170 faculty with Harvard, one of the leading research universities in the world with almost 25,000 students and more than 20,000 faculty and staff.

Actually, two: Wippman and Altschuler call out Hillsdale as an explicitly Christian college as though that were somehow important to their discussion, while ignoring Harvard’s more religiously and areligiously ecumenical bent—as though that does not matter at all.

The real irony though is that 1:10 faculty to student ratio at Hillsdale compared to that 8:10 ratio of faculty and staff to students at Harvard. Clearly one school is focused on actual teaching, while the other is focused on…nothing in particular, apparently, other than faculty and staff activism, antisemitic bigotry, terrorist support, and condoning when not actively encouraging the same in the student population. That only creates an environment where that vaunted research is merely an afterthought and a source of Federal largesse rather than a serious focal point for the institution.