VIDEO: Taxes Are Killing Small Businesses

Did you know that the livelihood of 85 million Americans depends on the success of small businesses? So you’d think that the government would encourage the creation and preservation of small businesses. Instead, the federal government taxes small business owners at about 40% — not including additional state or local taxes. Watch this week’s video to find out the effect of that tax rate on small business owners, on job creation, and on the economy as a whole.

Our business and economics series is a collaborative project with Job Creators Network. To learn more about JCN, visit www.jobcreatorsnetwork.com.

TRANSCRIPT

No matter where you come from, what your job is, or where you stand politically, you have to pay taxes. Uncle Sam needs taxpayer dollars to pay for things like schools, fire fighters, and the military.

There are all sorts of different taxes: income taxes, payroll taxes and sales taxes just to name a few. But individuals aren’t the only ones who pay taxes—businesses pay income taxes too.

Businesses that are set up as corporations pay taxes on their income at the US corporate tax rate of around 35 percent—one of the highest in the developed world. Countries like Ireland and Switzerland have corporate tax rates well under 25 percent, which can give companies based there a competitive advantage.

But there’s another taxed group that we’re forgetting…small businesses. There are 29 million of them in the US and they employ nearly 56 million people. That’s a total of 85 million people dependent on the success of small businesses!

Small businesses are most often set up as sole proprietorships, partnerships or another designation called an S-corp. But the money they make isn’t taxed at the corporate rate. The profits earned by these small businesses are “passed through” to the owner and counted as individual income on their personal tax return. That’s why you might hear small businesses referred to as “Pass-throughs.”

These entrepreneurs can pay tax rates as high as 40 percent not including additional state and local taxes, that means many American small businesses are being taxed at a higher rate than businesses anywhere in the world.

Why should you care? Because high taxes hurt small businesses ability to grow and expand, causing them to raise prices or even trim jobs to stay within their budget constraints.

Lowering taxes for small businesses or “pass-throughs” results in the growth of small businesses—allowing them to provide more jobs and boost the economy for everyone. After all two thirds of all new jobs come from small businesses and lowering taxes can have a big effect on the entire economy for all Americans.

So the next time you hear someone supporting an increase in tax rates on businesses, remember that very important group of small business owners and the 85 million people dependent on their success.

The Walmart Guy vs Anti-Capitalism Millennials

Though we have never met, I smiled recently seeing my favorite Walmart employee. For over ten years, I witnessed him gathering shopping carts in the parking lot. He is a white millennial who only has the use of one arm, walks with a severe limp and appears slightly mentally challenged. I once saw him leaving work driving a new looking compact car. My wife Mary prepared his taxes when she worked for a tax preparation company. I thought, “Hey, this brother has got it goin’ on — doin’ his thing.”

The Walmart guy could easily qualify for disability; sit home on his butt allowing taxpayers to take care of him. Far too many able-bodied millennials feel entitled, believing government should provide them free everything.

The Walmart guy’s work-ethic, self-reliance and pride in earning his own way is truly refreshing. The Obama Administration practically begged Americans, even non-citizens, to get on food stamps and to apply for as many government freebies as possible. This addicts voters to government handouts and keeps them voting for their Democrat dealers. Disability claims skyrocketed under Obama.

Disturbingly, polls say a majority of millennials reject Capitalism. They believe Socialism is fair and compassionate and Capitalism is selfish and cruel. This explains “yutes” hero worship of socialist/democrat presidential candidate Bernie Sanders. Millennials love Sanders’ promise to take the hard earned wealth of achievers to redistribute to lazy pot-smoking losers. Former British Prime Minister Margaret Thatcher said, “The trouble with Socialism is that eventually you run out of other people’s money.”

Socialism always ends up spreading mediocrity and misery equally among the masses while the rulers live high on the hog. Have you noticed that Hollywood Leftists and socialist politicians want government to force us to drive tiny tin-can cars, surrender our guns and lower our carbon footprint? Meanwhile, they travel in gas-guzzling limos and private jets with armed guards.

Capitalism gives everyone a shot at achieving their American dream. I will slap the next fellow black person who whines to me about how whitey has stacked the deck again us. Capitalism birthed America’s first female millionaire, a black woman born in 1867. Madam C. J. Walker was an entrepreneur, philanthropist, and a political and social activist. Socialism would have enslaved Madam Walker to the government system, giving her just enough free stuff to get by. Okay, I promise not to slap anyone.

It was depressing hearing it reported that a large number of Americans support taxing income over a million dollars at 100%. First of all, confiscating that money would generate around $616 billion which only covers a third of our annual deficit.

But what is most troubling is the disgusting class envy loser mindset of those who believe it is right for government to take people’s hard earned money. They do not realize that such financial tyranny would kill jobs and the incentive to be all one can be. How dare government place limits on success. Such thinking is un-American, counter to our God inspired founding.

We allowed Leftists’ silent-coup-takeover of public education decades ago. Consequently, Leftists have produced an army of stealth Leftist sleeper-cell operatives against their parents. Remember when Leftists instructed kids to steal their parent’s guns and turn them in to their teachers? Remember Michele Obama instructing students to report politically incorrect speech at the dinner table?

Outrageously, white students are taught beginning in kindergarten that they were born racist. In essence, white students are taught to feel ashamed and hate themselves for their unfair white privilege. The Walmart guy is on Leftists’ excrement list simply for being a working class white male. It angers me envisioning Leftist bullies getting into the grill of my Walmart guy, scolding him about his evil white privilege.

Students support black college student’s demand for free tuition and housing.

Black students also expect academic and behavioral standards lowered for them. I’m a 68 year old black man. I would be highly offended having standards lowered for me. Millennials quickly embrace Leftists twisting everything into evidence of unfairness and white American racism.

Years ago, a white friend shared that her son came home from middle-school in tears about how white men abused everyone; blacks, women, native Americans and so on. Today her son is an America hating Communist who still believes European white men are the greatest source of evil in the world.

Folks, we much turn this mess around regarding Leftists’ indoctrination of our kids. Trump appointing Betsy DeVos as Secretary of Education is a major step in the right direction. DeVos favors restoring power back to parents regarding the education of their children.

Oh, we’re out of milk. I’m confident I will see my Walmart guy diligently working.

VIDEO: Repeal and Don’t Replace Obamacare

Obamacare has led to higher costs and fewer health insurance options for millions of Americans. The 2010 healthcare law has brought the American people rising premiums, unaffordable deductibles, fewer insurance choices, and higher taxes. President Donald J. Trump promised to repeal and replace this disaster, and that is exactly what he is working with Congress to achieve.

The world has gone morally insane and your tax dollars are paying for it!

I am sitting here stunned. Late last week, Congress voted on an amendment by Rep. Vicky Hartzler (R-MO) to the National Defense Authorization Act (NDAA) which would have barred the use of taxpayer dollars for gender reassignment surgeries and hormone therapy for transgender members of the military.  Unfortunately, with the defection of 24 Republicans in the US House, the initiative failed and there is nothing to prevent the Obama-era policy from moving forward.

I believe that gender dysphoria (the condition of feeling one’s emotional and psychological identity as male or female to be opposite to one’s biological sex) can be very painful for the individual with the condition. However, helping that person to ignore reality and basic biology and assisting them in harming their otherwise healthy body with medical treatments is not the answer. We certainly shouldn’t be using public funding to pay for those treatments!  In fact, Dr. Paul R. McHugh, the former psychiatrist-in-chief for Johns Hopkins Hospital and its current Distinguished Service Professor of Psychiatry, said that transgenderism is a “mental disorder” that merits treatment, that sex change is “biologically impossible,” and that people who promote sexual reassignment surgery are collaborating with and promoting a mental disorder.  As a nation, we shouldn’t be promoting gender transition and the denial of biological reality, we should be helping those individuals struggling by getting them counseling.

Just over half (14 of 27) of Florida’s Congressional delegation voted against the amendment to bar funding for gender transition treatments, with the exception of mental health counseling. Especially disappointing are the three Florida Republicans who voted against the amendment in defiance of conservative principles.  FFPC reached out to each of those three Republican offices and asked them to vote yes on Hartzler’s amendment and ensure that you and I aren’t paying for treatments we believe to be fundamentally wrong.   Below is a list of every member who voted to allow the use of your tax dollars to pay for service members’ gender transition:

Congressman’s Name Party District
Al Lawson D 5
Stephanie Murphy D 7
Darren Soto D 9
Val Demings D 10
Charlie Crist D 13
Kathy Castor D 14
Brian Mast* R 18
Alcee Hastings D 20
Lois Frankel D 21
Ted Deutch D 22
Debbie Wasserman Schultz D 23
Frederica Wilson D 24
Carlos Curbelo R 26
Ileana Ros-Lehtinen R 27
*Rep. Brian Mast asked that his vote be changed after
the fact due to a mistake in voting

Already the Army is instructing women soldiers to accept sharing public showers, restrooms, and barracks with transgenders, including men who call themselves “women” yet remain fully anatomically male. This is absolutely outrageous!  Now, we are going to further perpetuate the myth that one can change one’s gender by paying for gender transition treatment.

This issue is only going become more prominent in Florida and cities throughout our state in the coming days, weeks, months, and years, so we all need to educate ourselves.  For that purpose, I’m including some resources on transgenderism:

Florida Family Policy Council is committed to continuing to educate individuals on the transgender issue and to fight for common-sense public policy, but we need your help!

If conservative principles and being aware of this kind of information is important to you, please consider giving a gift today. Your gift will help us continue our work throughout the state of Florida and ensure that our shared values are being heard in the public square.  You can donate by clicking this link.

Thank you for your prayers and support as Florida Family Policy Council works to build a state and a nation where God is honored, life is cherished, families thrive, and religious liberty flourishes.

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The Real Reason Government Wastes So Much Money by Daniel J. Mitchell

Why does government waste so much money? In so many ways? With such reckless abandon?

I suppose I could answer with mockery and say it’s because they have lots of experience squandering our tax dollars.

But let’s seriously contemplate that question and explore one of the reasons for waste. Simply stated, government programs are a magnet for scammers.

Let’s look at three case studies.

Example #1: Fraud is an inherent part of the big entitlement programs. Kevin Williamson has some unseemly details in an article for National Review.

…you know where there’s a lot of waste, fraud, and abuse? Social Security, Medicare, and Medicaid. …Medicare and Medicaid together account for about $1 trillion in federal spending annually, and estimates suggest that $1 out of ever $10 of that spending is fraud. Some estimates go much higher. We do not have a very good idea of exactly how extensive fraud in the system is, because the federal government has put a fair amount of effort into not knowing.

And what does that mean? How does the government try not to know?

…the government’s approach long has been backward…investigators are asking whether a certain treatment was in fact appropriate for what ails Mrs. Jones, not whether Mrs. Jones exists.

In other words, bureaucrats basically accept all claims as legitimate and simply judge from afar whether the right medical service is provided for the listed ailment.

Even if the ailment is fictional. Or the patient is fake.

As one might imagine, that kind of sloppy approach, combined with programs that dispense hundreds of billions of dollars, is a magnet for professional crooks.

It’s the work of organized crime. As Sparrow points out, when there is a criminal case filed against one of these fraud artists, then billing in a particular category – some years ago, it was HIV fusion treatments – falls off steeply, by as much as 90 percent. The implication here is that fraudulent billing may make up the majority of Medicaid and Medicare spending in some categories. …organized-crime syndicates are being permitted to use our medical entitlements to loot the Treasury, and that not very much is being done about that, which suggests the possibility – only a possibility – that there is political collusion in this at some level.

By the way, Kevin may be on to something when he speculates about collusion.

We already know about examples of politicians intervening to protect fraudsters

(who, conveniently, also happen to be campaign donors).

So is it really that much of a stretch to imagine them turning a blind eye (or worse) to industrial-level fraud by criminal enterprises?

Leads me to think this cartoon makes an unnecessary distinction.

Example #2: Welfare programs also are a magnet for fraud.

Here are excerpts from a recent news report.

Another six Lakewood, New Jersey couples were charged Wednesday with welfare fraud, bringing to 26 the number of people implicated since last week in the multimillion-dollar scandal. At the heart of the charges is the allegation that they all, in one way or another, failed to report or otherwise concealed significant income that would have made them ineligible for the assistance programs in which they enrolled. In total, state and federal prosecutors have said the families collected more than $2.4 million in benefits. …They allegedly obtained nearly $400,000 in Medicaid, food and heating benefits fraudulently. …Four other couples were arrested June 26 for allegedly defrauding public assistance programs of more than $1.3 million in benefits.

Welfare fraud must have been a major pastime for residents of the town.

Hundreds of these moochers are now trying to cover their tracks in hopes of avoiding legal trouble.

The specter of more charges has shaken Lakewood. Hundreds of residents have contacted authorities seeking amnesty or help avoiding arrest, the Asbury Park Press reported on June 29. In addition to the hundreds seeking amnesty, dozens more people have contacted social service agencies to cancel their benefits or declare income.

Example #3: And nobody should be surprised to learn that there’s plenty of fraud at the Pentagon.

Here’s an example that seems very representative.

The former owners of a Pittsburgh-area military supplier have been accused of defrauding the U.S. government of more than $6 million in defense contract work. …Prosecutors allege the Buckners inflated the cost of the work by falsifying invoices to make it appear as though they had spent $70 per window frame for the materials when in fact they had paid just $20 each for frames manufactured in China. The brothers are also alleged to have sold scrap aluminum collected in the manufacturing process without crediting that money to TACOM. The losses to TACOM are placed at $6,085,709 by the DOJ.

But that’s just the tip of the iceberg.

In 2014, a defense contractor responsible for providing food and water to troops in Afghanistan pleaded guilty to over-charging the U.S. government to the tune of $48 million. This week, two San Diego defense contractors pleaded guilty in a scheme that defrauded the Navy out of at least $1.4 million by over-billing for supplies that the military never ordered, the San Diego Union-Tribune reported. Similar stories have cropped up in Florida, California, Maryland, North Carolina and elsewhere in recent years, renewing calls for systemic reforms.

Maybe the reason fraud is so pervasive is that penalties are trivial or nonexistent.

A 2011 DOD report found hundreds of defense contractors that defrauded the U.S. military subsequently went on to receive more than $1.1 trillion in new Pentagon contracts between 2000 and 2010.

Shouldn’t criminal companies be barred from subsequent contracts? Shouldn’t crooked company officials be sent to prison?

Or do these things not happen because the same folks are also campaign contributors?

I don’t know the answer to these questions, but surely something is amiss. It’s almost as if government is simply a racket for the benefit of insiders.

Reprinted from International Liberty.

Daniel J. Mitchell

Daniel J. Mitchell

Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

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FLORIDA: Dem Senator Helps Pass Bill to Give Her Charity $1.5, Governor signs it

A Democrat Florida state lawmaker helped pass a bill that allocated $1.5 million to a nonprofit that she founded and pays her a six-figure salary and the state’s Republican governor approved it. The legislator, state Senator Lauren Book, represents south Florida’s Broward county and in 2007 she founded a charity called Lauren’s Kids to educate adults and children about sexual abuse prevention through school curricula, awareness campaigns and speaking engagements.

Book launched the south Florida-based group because her female nanny sexually abused her for years and she wants to prevent sexual abuse through education and awareness. The politician also wants to help survivors heal with guidance and support. “Armed with the knowledge that 95 percent of sexual abuse is preventable through education and awareness, Lauren has worked to turn her horrific personal experience into a vehicle to prevent childhood sexual abuse and help other survivors heal,” according to the charity’s website. Lauren’s Kids has helped advocate for the passage of nearly two dozen laws to support survivors and protect children from predators, the group’s website further claims.

It’s not just a labor of love for the Florida legislator, who got elected in 2016. As chief executive officer of her charity Book receives a generous $135,000 annual salary, according to a nonprofit investigative journalism conglomerate that broke the story about this outrageous conflict of interest. Since 2012 Lauren’s Kids has received north of $10 million in taxpayer money because the senator’s father, Ron Book, is a prominent lobbyist who happens to be the group’s chairman. In just a few years Lauren’s Kids has “become one of the Florida Legislature’s most favored private charities,” the news article states. Governor Rick Scott, who is in his second term, went along with the $1.5 million appropriation for Book’s charity when he signed Florida’s $83 billion budget recently.

As if this weren’t enraging enough, Lauren’s Kids used a chunk of the taxpayer funds it has received to pay a Tallahassee public relations firm millions of dollars, accounting for 28% of its expenses. A follow-up story by the same investigative journalism outlet reveals that the senator’s charity paid Sachs Media Group $3.1 million between 2012 and 2015 as well as a yet-to-be-disclosed amount in 2016. “Millions of taxpayer dollars flowed through the nonprofit to Sachs Media as it both promoted Lauren’s Kids and cultivated Sen. Book’s public persona as a survivor of child sex abuse,” the article states. “Critics say the domination of Lauren’s Kids by the senator and her lobbyist-father raises concerns that the work Sachs Media does is more about making her look good, not raising awareness about unreported cases of child sex abuse.” The founder of the nation’s premier charity watchdog says in the story that “nonprofit money is supposed to be used for a public benefit and not to enhance the aspirations of the charity’s officers.”

A huge lapse in Florida’s senate ethics rules allowed Book to vote for legislation that essentially enriched her. The same “loophole” let her keep the conflict from the public, the news stories point out. Here’s the broader explanation from the news outlet: “Senators are forbidden by ethics rules from voting on any matter in which they or an immediate family member would privately gain – except when it comes to votes on the annual General Appropriations Act. Abstaining senators must also disclose the nature of their interest in the matter, according to the 335-page Florida Senate Rules and Manual.” That means lawmakers can vote on issues that can benefit their profession, though it’s downright sleazy when taxpayer dollars go to an entity that the elected official actually controls and makes money from. Millions of dollars earmarked to prevent child sexual abuse going to a public relations firm is in a class of its own.

Tech is Drastically Disrupting Local Taxes — Can Government Respond? by Jim Ley

In 1994 I gave a speech to a large gathering at the National Association of Counties asking the question “Will You be Roadkill on the Information Superhighway?” The Internet as an everyday thing was new and just beginning to gain some relevance. But those of us who liked to look to the future saw a lot that was going to impact public policy.

On that day I asked them the simple question — how will you tax a box the size of your kitchen table (OK, be fair, file servers were a lot larger then, but I was looking to the future) that produces all of the sales transactions that used to be produced by your local mall — at the time the arguably largest single property tax generator in most urban counties?

I look back on that presentation and realize that as close as I was to defining a set of specific challenges that might take place, I wasn’t even in the ballpark of being able to see the systematic influence that technology would drive across the board.

I find it interesting that much of the policy discussion today regarding technology is centered on the theme of “coping with disruptive technology trends.” Just the use of the word “disruptive” to describe the challenge shows how difficult it is for government and society to identify and adapt to changes in the status quo. How tied to the status quo we can become!

The way of systemic adaptation

Amazon is now the large retailer in the world.

The online shopping experience, having started in 1995, has hit its stride and has become more a part of our everyday consuming life than we could ever have suspected. Online fulfillment companies like Amazon have evolved through multiple phases of connection with their customers and have now begun to address the subliminal emotional aspects of the shopping experience.

Within 10 years even more will change as regards the online shopping experience. You won’t have to shop, as in searching and then browsing through endless pages looking for what you want. Your desires will be presented to you directly, just like you have your own digital personal shopper. Your shopping experience will become the guide to anticipating your purchasing needs.

Your closet, pantry and refrigerator will tell your computer, and that of your online retailer, how old your clothes are, when you wore an item last, and what food staples you are in need of. Your purchasing habits, social media and on line habits will be mined to produce a customized shopping experience geared just to you. The local retail store will increasingly become a thing of the past, replaced by an outlet where you may be able to try out virtual goods or where you can have them delivered in the form of 3D printed consumables. With a personal shopping list having been organized for you without much thought on your part, the push of a button will bring your groceries and supplies to your door.

Other things will change as a result.

The commercial real estate market will begin to shrink, maybe even dramatically. The need for large and small strip malls will be greatly diminished, limited in some respects to places that house grocery stores — to the degree they will be needed as grocery needs can also be algorithmically anticipated — and small offices and boutique local retail.

Personal shopping automobile trips will, over time, be reduced dramatically, and more and more people will begin to abandon personal automobile ownership in favor of car sharing services that will evolve from the current Uber model to the point where you can simply call for a self-driving vehicle on your smartphone or similar device.

Automobile sales as the significant source of state and local sales tax revenue they now are will begin to decline under this scenario. Bulk delivery services like FedEx and UPS will be replaced with drones and Uber like personalized delivery. The Amazon-type fulfillment center will become the largest building in a region — until it too is made obsolete.

A radical impact on funding governments

All of this will radically transform the property tax base, with commercial space being devalued sharply. It is this commercial and office space in the shape of downtowns and dense (not suburban) clusters that, until now, has produced the large tax premium  — defined as producing taxes over and above the average per acre — that the rest of the community uses as a dividend to keep its public services funded at a sustainable level.

Maintaining a sustainable property tax base will become a topic at every City Council and County Commission meeting as the commercial tax base absorbs this “disruptive” result. The shape of communities will change, creating large opportunities for redevelopment, always with an emphasis on propping up the property tax base. A strategy of density oriented tax farming will become more obvious as a means of maintaining the flow of public revenue while limiting costs required to provide for the basics of public service. It will no longer be a question of what is the most valuable parcel in a county or city tax base (like “the mall”) but instead it will be all about the taxes generated per acre of development. Density, a dirty word used in land-use hearings today, will be the byword for financial survival.

Collectively these trends should work to influence land-use policy now and lead to a redefinition of urban space, their collective interaction producing the catalyst that moves the market back to a more walkable and intimate urban and suburban form in our activity centers.

The question is: Are the statehouses and local council chambers that set the policies that manage our communities capable of identifying these trends and managing the political discussions and decisions required to adapt? What principle will be applied in attempts to cope? Will it be a principle of regulate-and-control that protects the status quo, or a principle of identify-and-adapt, seeking to engage and inform investment and real estate interests who themselves will have to adapt or perish?

The states and cities that can think forward like the Amazons and Apples of the private sector, will be in position to thrive in the new economy. The rest…

EDITORS NOTE: This column originally appeared on The Revolutionary Act.

The Democratic Party of Jihad

The Democratic Party has gone on the offensive and adopted the strategies of Jihad to overthrow the government of President Donald Trump.

Former radical Muslima Isik Abla lists and describes the 8 types of jihad currently being waged against Western countries in their campaign to rule the world under Islam.

1. Population jihad

According to Abla “population jihad or cultural jihad” is the concept of populating the world with more Muslims than Christians, Jews or people of other religions or no religions. Abla said that this not only refers to the migration of Muslims and their invasion of foreign cultures, but it also is a call for Muslims already embedded in Western countries to have more children than non-Muslims.

The Democratic Party and its new religion of Liberalism supports mass migration of Muslims with hostile cultural norms and illegal immigration to swell the numbers of their intersectional resistance movement against President Trump. The new Democratic Party of jihad is a supremacist culture that tolerates only those who adhere to their left-wing liberal narrative of political correctness, moral relativism, and historical revisionism. They suppress freedom of speech through censorship, physical intimidation, and by interrupting and obstructing the expression of opposing points of view particularly on college campuses.

2. Media jihad

One of the most influential forms of jihad is “media jihad” which Abla said allows Muslims to influence the way Westerners think or feel about Islam and particular political candidates. Abla asserted that Muslims spend billions of dollars building partnerships with major television networks and other major media outlets.

“In the United States many media channels’ partnerships are bought by Muslims. There are so many Muslims behind the scenes in power because they invest money. They invest billions into the Western world’s media. You can take anything and make any person a monster or hero in the eyes of people through media. It is easy to manipulate and brainwash people through media. It is the easiest way and most powerful channel as a weapon. We saw it in the previous elections. We see it in the world. They can get you to believe anything about any candidate that they want you to believe.”

She also said that one of the biggest media jihad initiatives is to promote the idea that “Islam is the religion of peace. Whoever says this is part of media jihad.” 

The globalists who own the mainstream media giants are all colluding in a very unAmerican attempt to overthrow the government of America-first President Trump and end American democracy. Their motive is the creation of an internationalized world which provides an unimpeded internationalized market for their products. Obama, the globalist elite’s puppet, was groomed to be the globalist prince and Hillary was his designated legacy. Obama and Clinton were Saul Alinsky’s most famous students. Their mission was to bring social chaos to America and transform our democracy into socialism. Socialism with its cradle-to-grave government control is the necessary condition before society can become part of an internationalized world and transformed into the globalist elite’s plan for one-world government. President Trump is the single greatest threat to globalism and one-world government.

Globalism is the big lie of the 21st century. There is no social justice or income equality in one-world government only masters and slaves. The American people rejected Liberalism’s narrative and surprised the globalists by voting for American democracy, American sovereignty, and America-first domestic and foreign policies. So what do the swamp creature do? They double-down on reporting of false accusations, frivolous lawsuits, and fake news in an attempt to topple our constitutionally elected President and destroy American democracy.

Media jihadis took a play from Obama’s mentor socialist Saul Alinsky’s 1971 manual Rules for Radicals. “Mock your opponent; there is little defense for mockery” — “Accuse them of doing what you do and of being who you are” — Rub raw the sores of discontent — “don’t worry about how big and outrageous your lies sound; just keep repeating it often enough and long enough and it will come to be believed.”

The Democratic Party relied on their unaware, compliant, misinformed supporters to rally around them and join their growing “resistance” movement. Facts were never checked, it was a repeat of Ben Rhodes’ infamous Obama White House echo chamber that duped the public about the Iran deal. In a stunning admission of guilt Ben Rhodes admitted that the White House created an echo chamber of false information that was repeated incessantly by the mainstream media to elicit public support for the Iran deal.

President Trump has exposed the anti-American Iran deal for what it is – an illegal transfer of 1.7 billion dollars of US taxpayer money to the biggest state sponsor of terrorism on the planet. In that single deceitful move Obama resuscitated his beloved Iran’s failing economy.

3. Education jihad

Another way in which Islam is trying to gain influence in the cultures of the Western world, Abla said, is by devout Muslims paying tuition for other Muslims to attend prestigious Western universities like Harvard, Yale, Oxford or Cambridge. “These are going to be the people of the future to be in high positions,” she explained. “They pay their Harvard education, they pay Princeton, they pay Yale. We were shoveling money to this kind of educational Jihad so those people could be in high places in power to dictate what needs to happen in the Western world [and] to Islamize the Western world. This is an ideology type of Islam and I was part of that.

Education jihad has two parts. One is very powerful countries like Saudi Arabia, they invest into these colleges. They give millions of dollars a year. … So they have a lot of saying into these colleges’ curriculums. The other way is by sending these Muslim youths into these colleges. What happens is when they graduate, they don’t have green cards but they have the highest chance of being hired by a company to get a green card.”

The Democrat’s educational jihad in America begins in elementary school where students are indoctrinated into Liberalism’s tenets of political correctness, moral relativism, and historical revisionism. Instead of patriotism, honor, achievement, and self-determination their teachers inculcate them with the Leftist propaganda featuring American self-loathing and socialist ideology. Students are pressured toward conformity rather than creativity. They are taught that trying is the same as achieving and that all of them are butterflies. Group projects, group think, group assignments all in preparation of socialism.

The three pillars of American society God, government, and family are under attack by Liberalism’s campaign of destruction. The hippies, socialists, and anarchists on campus in the 60s did not go quietly into the night. They graduated and reconstituted themselves as the parents, teachers, professors, administrators, politicians, psychiatrists, psychologists, script writers, media writers, computer data miners, and the heads of industries that are in positions of influence to implement their mission to destroy American democracy and replace it with socialism.

Liberalism’s anti-American curriculum is provided courtesy of Tavistock Institute’s network of foundations. Tavistock Institute for those who may not know began in England and was exported to the United States after WWII to destroy America from within. Tavistock turned the principles of Freudian psychology and the unconscious into instruments of mass psychology for mind control and propaganda. Tavistock is now a six billion dollar network of foundations whose goal is one-world government. The Tavistock formula includes deception, brainwashing, conditioning, peer pressure, revisionism, moral relativity, and echo chambers all designed for social engineering toward one-world government. The entire educational curriculum in the United States has been infected with Tavistock Institute indoctrination. The first priority for Education Secretary DeVos must be curriculum overhaul.

4. Economic jihad

Abla also discussed economic jihad or financial jihad. Much like media jihad, wealthy and influential radical Muslims are investing in various businesses, banks, stocks and properties in the Western world. The goal behind this kind of investing is to obtain power within the culture.

“Anywhere that you invest money, you have cultural power. Anywhere you are a shareholder, you have cultural power. You have a voice when you invest your money. That voice is the voice of Islam. When you invest your money in any field, you are basically buying people, you are basically buying companies. They are going to sooner or later going to mold into your ideology.”

Jihad has been an intrinsic part of Islam since the 7th century. Islam has waxed and waned in socio-political influence over the centuries but the discovery of oil in the Middle East reversed Islam’s decline and launched the modern extremely well funded campaign of jihad against the West. Jihadis went on a shopping spree buying Western politicians, university chairs (to establish Islamic studies departments), land for mosques (cultural centers), businesses, airlines, sophisticated weapons and expertise.

Economic jihadis also took a play from Obama’s mentor socialist Saul Alinsky’s 1971 manual Rules for Radicals. Alinsky instructed his revolutionaries to, “Stop throwing bombs and demonstrating, clean yourself up, cut your hair and put on a suit and get into the system and change it from within.” The economic jihadis have cloaked themselves in Western garb and insinuated the Muslim Brotherhood operatives into every sphere of American life particularly where they have the most power and influence to do the greatest damage.

Barack Obama, the most lawless anti-American president ever to hold office was an Alinsky follower. When he campaigned on “hope and change” most Americans had no idea his goal was to destroy American democracy and replace it with socialism. Saul Alinsky wrote, “Any revolutionary change must be preceded by a passive, affirmative, non-challenging attitude toward change among the mass of our people. They must feel so frustrated, so defeated, so lost, so futureless in the prevailing system that they are willing to let go of the past and chance the future.” Alinsky described what America has become after eight years of Obama’s anti-American, pro-Muslim, radical socialist policies. Obama supported all eight Islamic jihads as well as all eight Democratic Party jihads during his two terms and continues to publicly support them.

5. Physical jihad

Physical jihad, the war against infidels, is probably the most recognizable form of jihad because terrorist groups like the Islamic State, Boko Haram and others are constantly in the news as they continue to kill nonbelievers and dissenting Muslims in places like the Middle East and Africa and carry out attacks on soft targets in the West. Some Muslims are brainwashed into believing that Muslims are called to carry out wars against Christians, Jews and others until everyone dies or they become Muslims. Specifically, Abla pointed to Quran 2:171-173. They believe in ethnic cleansing. So when you ask about physical jihad, it is not only war and defense, it includes ethnic cleansing — genocide. Muslims are called to carry out jihad until everybody is either killed or recites the Muslim declaration of faith.

The Democratic Party was guilty of fomenting violence against Trump supporters at campaign rallies and now that he is President Trump they foment violence over social media, in print media, in classrooms, and on mainstream news programming. In a shocking display of hypocrisy politicians and pundits expressed support for a play that dramatizes the stabbing murder of President Trump nightly. Some Democrats even expressed support of the shooting of Congressman Scalise at the Republican baseball team practice. It is monstrous! These sniveling hypocrites would need play-doh, safe spaces, and counseling if the Republicans had staged the nightly murder of Barack Obama on Broadway or if some comedian held up his severed head. It is unseemly and entirely unAmerican. In America we VOTE! We do not promote violence and incite anarchy – we field a better candidate for the next election –  but the Democratic Party no longer plays by the rules of the Constitution – they play by the rules of Jihad and Alinsky’s Rules for Radicals.

Democrats seem comfortable and even entertained by incitement to violence against Republicans:

1. Tim Kaine specifically asked for blood in the streets.
2. Loretta Lynch did the same.
3. Obama asked for his supporters to rise up. “If Republicans bring a baseball bat, you bring a gun.”
4. CNN announced who would take over the government if all elected Republicans were killed during Trump’s inauguration.
5. A New York Shakespeare play dramatizes the killing of President Trump nightly.
6. Snoop Dog kills President Trump in a video.
7. Kathy Griffin decapitates President Trump in a photo shoot.
8. Madonna: “I’ve thought a lot about blowing up the White House.”
9. Marilyn Manson kills President Trump in a music video.
10. Larry Miller jokes about suffocating Trump with the pillow they used to kill Scalia.

6. Legal jihad

Abla warned against efforts to bring sharia courts or sharia councils to the United States like they have done in places in the United Kingdom. Abla accused those trying to set up “sharia courts” in the United States of using democracy to stop freedom. “They take an action [under the guise] of human rights and religious freedom. It is unbelievable. They use your law against you.”

Sharia courts in the United States establish a two-tier system of justice – one for Muslims and one for non-Muslims. This is entirely un-American but the Democratic Party and its pro-Muslim narrative support sharia courts because ultimately they will create social chaos. It is counter-intuitive and difficult to embrace the fact that the Democratic Party seeks to destroy American democracy. Only if you are mindful of this goal can you understand the sinister destructive social policies they support.

Legal jihad is another weapon being used against President Donald Trump. The defeated Democrats are colluding with the mainstream media to create an echo chamber of false accusations, fake news, and demands for groundless investigations and frivolous lawsuits to impede President Trump and sabotage his administration by preoccupying them in court. The theory of lawfare against President Trump is that if the President and his administration are spending their time and resources defending themselves in court he will not be able to govern effectively, keep his promises to strengthen and make America great again, or more importantly investigate the criminal activities of Obama and his gang. The unprecedented executive overreach and lawlessness of the Obama administration must be investigated. The Democrats hope that disappointment in President Trump will reward the Democrats with a gain of enough seats in the midterm election to impeach him.

7. Humanitarian jihad

Muslim humanitarian groups are using people’s desperation to get them to convert to Islam and say the Shahada, according to Abla. She warned that displaced non-Muslims in high-need countries in Africa and other places throughout the world are being denied food unless they convert to Islam.

“If you want to get help, you register as a Muslim. Even nominal Christians, they may be in so much need and register as Muslims to receive aid. Then they say that if you want to continue to get this aid, you need to come to Quran course once a week, you need to come to Friday prayer meetings. They start luring you little by little. First, you just fill out a piece of paper to get food. After three months, they say ‘We change our rules, you need to come to prayer meeting.’ After that, you need to put your kids into Muslim school.”

The deceitful “humanitarian” organizations of the Democratic Party financed by globalist elite war profiteer George Soros under the banner of his Open Society Foundations are particularly sinister. Under the guise of being a “humanitarian” grant-making network, Soros funds and foments anarchy and the destabilization of economies all over the world. He is the puppet master pulling the strings of the useful idiots who have no idea that he is not a philanthropist – he is a carpetbagger who destroys economies through currency collapse and then buys the country’s assets on the cheap. He is a despicable plunderer who is using his enormous wealth and influence to advance his agenda of one-world government.

George Soros is a currency speculator who redistributes wealth under the guise of “humanitarian” services. The 7 steps of his regime/currency collapse listed by keywiki are:

  • Step One: Form a shadow government using humanitarian aid as cover.
  • Step Two: Control the airwaves. Fund existing radio and TV outlets and take control over them or start your own outlets.
  • Step Three: Destabilize the state, weaken the government and build an anti-government kind of feeling in the country. You exploit an economic crisis or take advantage of an existing crisis — pressure from the top and the bottom. This will allow you to weaken the government and build anti-government public sentiment.
  • Step Four: Sow unrest.
  • Step Five: Provoke an election crisis. You wait for an election and during the election, you cry voter fraud.
  • Step Six: Take power. You stage massive demonstrations, civil disobedience, sit-ins, general strikes and you encourage activism. You promote voter fraud and tell followers what to do through your radio and television stations. Incitement and violence are conducted at this stage.
  • Step Seven: Outlast your opponent.[15]

Currency/Financial Collapses

Today Soros is setting the stage to benefit monetarily as well as politically through the death throes of the European Union and the euro. A European regulatory regime takes the world one step closer to Soros’ dreamed of open society with no borders. Once Europe is controlled totally by regulation, he simply waits for the United States to finish its regulatory capitulation and then combines the two. A New World Order will be all but complete at this point.

8. Political jihad

Muslims who hold power or public office in the West try to downplay the role of Islam when it comes to violence and terror, thus carrying out the “political jihad,” Abla said. As an example, she pointed to London Mayor Sadiq Khan’s response to three bombings that injured over 30 people in New York City and New Jersey last September that was carried out by a man believed to be influenced by extremist ideology. Khan said that terrorist attacks like that are “part and parcel of living in a big city.” In March, an attack in London claimed by Islamic State killed three pedestrians and a police officer and injured over 50 people. “[He] said that this kind of attack should be expected,” Abla said of the mayor, who is Muslim. “So this is a good example of being Muslim and having political power and making it seem like it is normal and desensitizing people to terrorism to stop giving reactions to Muslim terrorists. They say, ‘We live in a big city and attacks like this are normal.’ I lived like terrorism is normal in the Middle East and a Muslim country. Politically bringing this to the Western world, with these people who are in power saying ‘Islam is a religion of peace and terrorism is going to happen.’ It becomes part of your life. When I was in the Muslim world, it was part of my life. I used to hear gunshots and machine guns. I grew up with PTSD. It became normal and it was part of my life but it was not part of my life when I came to America. Now, they are trying to make it part of your life.”

The Leftist media fosters ignorance and complacency about the magnitude of the jihad threat because war makes strange bedfellows. The Leftists and the Islamists have common cause today to bring down America. Both parties seeking power and control of the societies they attack. The irony is that the globalist elites are using them both as useful idiots to create the social chaos the globalist elite require to impose their own dream of one-world government that they themselves will rule.

Globalism is an old story described unapologetically in chilling detail 65 years ago by Lord Bertrand Russell in 1952 in his book The Impact of Science on Society. The anti-Trump movement thinks it is so original in its “resistance” but in fact its members were encouraged and manipulated to become exactly who they are by the pervasive Tavistock Institute indoctrination that disguised itself as education in America. Two generations of children are now Stepford adults – their “revolution” entirely scripted in 1952 when Bertrand Russell described the globalist elites one-world government as the self-serving answer to the Malthusian problem of the Earth’s resources being unable to sustain the population growth.

The United States of America is the greatest experiment in individual freedom, upward mobility, and the rule of law that the world has ever known. It is what explains America, what made America great, and what defines the American dream. “Only in America” was not a slogan it was a reality for millions of people who came to America legally to make a better life for themselves and their families. The American dream is what incentivized innovation and small businesses that made America the powerhouse that it was after WWII – it is also what provoked the wrath of our enemies intent on destroying our democracy and American way of life.

The sadness for America is that the Democratic Party no longer reflects the values of American democracy – they have been overtaken by radical socialists who have embraced intersectionality and the politics of victimhood. It will be the death of American democracy if the Democrats are successful in overthrowing the government of President Trump. Like witless adolescents the Democrats are intoxicated with the thrill of rebellion and the community of “resistance.” They are too arrogant to realize that they are useful idiots being manipulated by the globalist elites to create social chaos and replace President Trump’s America-first agenda with socialism. Socialism will then be replaced with one-world government where there is no place for anarchists, cry-bullies, or useless degrees in social justice. The globalist elites will exterminate the useful idiots as easily as Hitler exterminated 6 million Jews in Germany. Game over.

Federal Debt is Killing Middle America by Jim Ley

For the last 10 years of my career as a public administrator, I preached fiscal responsibility for two reasons.

First, I was concerned that we were approaching a cyclical recession and I wanted to build reserves so that service levels could be maintained and property tax increases could be avoided during a challenging financial period.

Second, I was fully aware that, at best, the intertwined fiscal and monetary policies of the federal government were devaluing the purchasing price of the dollar, affecting not only municipalities’ purchasing power, but that of the taxpayer. I was concerned that municipalities’ labor forces, facing this reality, would demand more wages and that the taxpayer would be hurt even worse through increased property taxes.

Little did I know that the inevitable recession would be the worst since the Great Depression and the fiscal policies would devalue the purchasing dollar even further.

Debt machinations boil away buying power

I often wonder if we as taxpayers are clueless.

We have been conditioned to look at the ever growing federal debt number as meaningless because nothing bad seems to be happening in any visible fashion that we can translate into our lives. And we believe the politicians who spin the same stories so that they don’t have to do their real job, because it is what we want to hear.

But whether a frog is boiled to death by being immersed in boiling water, or whether it is boiled to death as the temperature is slowly increased to boiling — the frog is still dead. At least in the former case, the frog is at least incentivized to jump out of the boiling water, as opposed to adapting to the increasing but eventually deadly temperature in almost total ignorance of its imminent demise.

We have gone through a period of time where the lower and middle class in this country has seen the value, the purchasing power of their paycheck, decreased by as much as 20 percent. Retirees have seen their retirement funds sit stagnant, while the lack of return on their savings accounts permits inflation to eat into the value of their savings. They can buy less and less.

Anyone with a simple understanding of economics should be able to see what is happening. With a trillion dollar deficit each year, the federal government has to borrow roughly $83 billion a month. How does it do that?

From a little office in Washington, D.C. it auctions off that debt to bankers and governments around the world. As long as things stay relatively depressed economically, and given the good faith and credit of the United States, the interest payment demanded is kept low — thank God.

Irresponsibility will bring it to a crash

The debt doesn’t always sell, or a concern arises that too much of our debt is owned by a foreign power, possibly giving them an economic weapon.

So who buys it then? The U.S. Treasury Department looks to the Federal Reserve, which it funds through the printing of dollars, to buy the remaining debt. So more money is printed to buy the debt. The Fed now owns about $4.5 trillion in U.S. Treasury Bonds on its balance sheet. To control the supply of money in circulation, the Fed promulgates a spider’s web of regulation and control requiring banks to reserve large sums of money to cover the risk associated with future obligations.

Exploring this system of controls, and the impacts the system has had on our financial well being, would require way more space to explain than I have here.

Everyone knows that China owns a huge chunk of our debt — $5 trillion. And of course, there is the debt the Fed owns. But who do you think, what entity do you think, also owns a huge chunk of the federal debt? It is the Social Security and Medicare trust funds with $2.8 trillion. Rather than investing these funds in instruments that could return more to their trust funds, thus ensuring their long-term solvency, these funds are used by the federal government to lower the overall cost of borrowing.

If nothing else, it is a fiduciary conflict of interest. But Congress does not require itself or the federal government to operate under the same rules with which private and nonprofit fiduciaries must comply.

Too bad for all the rest of us.

Because all of these machinations combine to diminish the purchasing power of the dollar, severely impacting the working middle class.

ABOUT JIM LEY

Jim Ley has more than 35 years in public service, the last 25 of which were in top level administrative positions in two of the more dynamic counties in the U.S. Jim served two terms as President of the National Association of County administrators and was a leading “small government” voice in the profession. His administrative focus has been on financial sustainability and accountability to the taxpayer.

EDITORS NOTE: This column originally appeared in The Revolutionary Act.

Cut Subsidies, Get Rich by David Boaz

Ever since President Trump and budget director Mick Mulvaney released a proposed federal budget that includes cuts in some programs, the Washington Post has been full of articles and letters about current and former officials and program beneficiaries who don’t want their budgets cut. Not exactly breaking news, you’d think. And not exactly a balanced discussion of pros and cons, costs and benefits. Consider just today’s examples:

[O]ver 100,000 former Fulbright scholars, among them several members of Congress, are being asked to lobby for not only full funding but also a small increase.

As a former Federal Aviation Administration senior executive with more than 30 years of experience in air traffic control, I believe it is a very big mistake to privatize such an important government function.

On Thursday, all seven former Senate-confirmed heads of the Energy Department’s renewables office — including three former Republican administration officials – told Congress and the Trump administration that the deep budget cut proposed for that office would cripple its ability to function.

This is nothing new. Every time a president proposes to cut anything in the $4 trillion federal budget — up from $1.8 trillion in Bill Clinton’s last budget — reporters race to find “victims.” And of course no one wants to lose his or her job or subsidy, so there are plenty of people ready to defend the value of each and every government check. As I wrote at the Britannica Blog in 2011, when one very small program was being vigorously defended:

Every government program is “well worth the money” to its beneficiaries. And the beneficiaries are typically the ones who lobby to create, expand, and protect it. When a program is threatened with cuts, newspapers go out and ask the people “who will be most affected” by the possible cut. They interview farmers about whether farm programs should be cut, library patrons about library cutbacks, train riders about rail subsidy cuts. And guess what: all the beneficiaries oppose cuts to the programs that benefit them. You could write those stories without going out in the August heat to do the actual interviews.

Economists call this the problem of concentrated benefits and diffuse costs. The benefits of any government program — Medicare, teachers’ pensions, a new highway, a tariff — are concentrated on a relatively small number of people. But the costs are diffused over millions of consumers or taxpayers. So the beneficiaries, who stand to gain a great deal from a new program or lose a great deal from the elimination of a program, have a strong incentive to monitor the news, write their legislator, make political contributions, attend town halls, and otherwise work to protect the program. But each taxpayer, who pays little for each program, has much less incentive to get involved in the political process or even to vote.

A $4 trillion annual budget is about $12,500 for every man, woman, and child in the United States. If the budget could be cut by, say, $1 trillion — taking it back to the 2008 level — how much good could that money do in the hands of families and businesses? How many jobs could be created? How many families could afford a new car, a better school, a down payment on a home? Reporters should ask those questions when they ask subsidy recipients, How do you feel about losing your subsidy?

Republished from Cato Institute.

David Boaz

David Boaz

David Boaz is the executive vice president of the Cato Institute and the author of The Libertarian Mind: A Manifesto for Freedom and the editor of The Libertarian Reader.

The Deficit Problem Is a Spending Problem by John Tamny

After 2008, the US economy has experienced relative stagnation. The  common refrain from the Left was that federal budget deficits weren’t big enough. Of the belief that government spending is what lifts economies out of slow-growth ruts, Paul Krugman, Lawrence Summers and other neo-Keynesians called for federal borrowing beyond what Treasury took in as a way of allegedly boosting the economy.

Who cares that excessive spending failed so impressively in the U.S. back in the 1930s, and who cares that massive increases in Japanese debt have failed to awaken its economy from its “lost decades?” The Keynesians most associated with America’s Left (they populate the Right too, but most who think this way don’t admit it, or know it) pointed to increased deficits as the certain source of our economic salvation.

This is interesting mainly because with the election of Donald Trump in 2016 in concert with promises of big tax cuts, the same left that cheered deficits as the path to recovery suddenly claimed they would hold the economy down. This requires mention as a reminder that budget deficits and national debt are political props, first and foremost.As for their economic implications, governments can only spend insofar as they tax or borrow from the private sector. Period. As such, and in a very real sense, all government spending is deficit spending; the deficits and national debt a bit of a distraction.

Spending Is What Matters

The level of government spending is what matters the most because the wealth we produce in the private sector is precious. The spending consumes capital that otherwise might reach innovators. Government spending is the worst kind of tax mainly because its horrors are mostly unseen.

Taxes we see and feel in each paycheck, devaluation of the dollars we earn (a tax like any other) we suffer through reduced work opportunity and spending power, but government spending represents the unseen; as in what would intrepid, innovative minds do with the expropriated capital if government weren’t consuming it?

How many Apple, Amazon and Microsoft equivalents haven’t, and will never emerge from start-up infancy thanks to government’s consumption of crucial resources, how long ago would cancer and heart disease have been cured; only for bright minds to train their genius on the erasure of other life-ending maladies, or the fulfillment of other market needs?

The Salsman View

All of the above at least partially explains why I approached Duke political economy professor Richard M. Salsman’s new book, The Political Economy of Public Debt: Three Centuries of Theory and Evidence, with some reservation.

Salsman’s genius and broad knowledge have long been evident, but e-mail exchanges over the years between author and reviewer revealed a friendly difference of opinion about budget deficits. Though no deficit “hawk,” Salsman views them as a problem in their present state, while I view government spending as the real problem. If given the choice between a balanced budget of $4 trillion, and annual deficits of $1.4 trillion on $1.5 trillion in spending, I would take the latter. In a heartbeat. It represents less government waste of precious capital to the tune of $2.5 trillion.

So while my views on what Salsman refers to as “public debt” haven’t changed much, Salsman’s book forced a very healthy rethink of the debt question, though for reasons different from the traditional critiques of deficit spending. And while this review will reveal some ongoing areas of disagreement with the author, none of the differences should be construed as a non-endorsement of what I’ll refer to going forward as “Public Debt.”Salsman has written something beyond special, a book dense with information and history that I’ll be referencing for years to come. It’s perhaps commonly thought that Carmen Reinhart and Kenneth Rogoff’s This Time Is Different is the definitive history of government debt, but Salsman’s Public Debt trumps their book by many miles. It’s quite simply spectacular, and informative in a way that few academic economics books (or, for that matter, any economics books) are.

To give readers a sense of how the book is constructed, it “examines three centuries of the most prominent political-economic theories of public debt.” Salsman addresses the debt through the eyes of some of the grandest names in economics, along with others who similarly deserve stature, but who have in a sense been forgotten. One of Salsman’s many triumphs is the staggering amount of research he conducted in order to explain to readers the myriad ways economists of different persuasions viewed government debt in the past, and how some do in the present.

Salsman divides up the economists of varying Schools into three groups. “Public debt pessimists” typically “argue that government provides no truly productive services,” that the “taxing and borrowing detract from the private economy, while unfairly burdening future generations,” plus they generally believe that government debts are “unsustainable and will likely bring national insolvency and perpetual economic stagnation.” David Hume, Adam Smith and Nobel Laureate James Buchanan were three public debt pessimists, and then the list today is endless: Niall Ferguson, Laurence Kotlikoff, David Stockman, etc. etc. To the debt pessimists, the world is seemingly always about to end.

“Public debt optimists” think “government provides not only productive services, such as infrastructure and social services,” but they also think deficit spending can lift economies out of “savings gluts, economic depressions, inflation, and secular stagnation.” Interesting about the optimists is that while they’re convinced of the wonders of deficits, they almost universally despise the creditors (the “rentier class”) who make deficits possible. Those who lend to governments in return for an income stream are almost invariably immoral financiers in the eyes of the optimists, and so the optimists fully support defaulting on those who provide government with the funds to waste.

Alvin Hansen and Abba Lerner are prominent in Public Debt as some of the old-style optimists, but the list of neo-optimists in today’s commentariat is similarly endless; think once again, Krugman, Summers, Alan Blinder, Christina Romer, etc. At book’s end, Salsman correctly points out that the “pessimists and optimists have more in common than is commonly realized – and each perpetuate long-established falsehoods.” Salsman was being kind….

The Realists

And then there are the “public debt realists.” They “contend that government can and should provide certain productive services,” but within strict limits. Realists neither whine all the time about world-ending government debts, nor do they claim that they can be essential sources of economic sustenance as the equally confused optimists believe.

Realists who favor “constitutionally limited government” don’t think public debt is “inevitably harmful” mainly because when government is limited, so will borrowing be. Alexander Hamilton was the most famous public debt realist. Of the moderns in our midst, Steve Forbes is a realist, so is George Gilder, and so of course is Salsman. More on your reviewer’s stance later.

Up front, public debt isn’t some recent concept reflecting the supposed immorality of the modern world whereby governments borrow today only to heartlessly pass the debt on to future generations. Salsman notes early on that public borrowing by governments such that the citizens were “ultimately responsible for servicing the debt” came about in the “late seventeenth century” through the issuance of “tangible securities traded in secondary, liquid markets with prices and yields visible on public exchanges.”People have long wanted a way to securely store wealth today in favor of future consumption tomorrow, governments have long looked for ways to borrow existing wealth, and financiers brought the two together. This isn’t to defend the public borrowing as much as it’s to say that it’s not something that arose in the 20th century.

The Founding

Going back to the U.S.’s founding, Salsman writes that “Alexander Hamilton and Thomas Jefferson differed pointedly over whether government should borrow at all, whether it should fully pay its debts (even when trading at a discount), whether the currency in which debts were to be repaid should be gold backed and of uniform consistency nationally or instead be cancelled, and whether private banking was legitimate. On all such questions Hamilton answered in the affirmative, Jefferson in the negative.” Based on Salsman’s analysis, Jefferson would be grouped with the pessimists, and Hamilton as mentioned with the realists.

Hamilton felt a national debt would be very additive to the U.S.’s early fortunes as a sign of the new country’s strength. Issuance of debt would “show the world the United States could and would pay its debts.” This was a particularly important signal to send to creditors analyzing what was again, a new country. Salsman is very clear that Hamilton wasn’t a “proto-Keynesian optimist” as much as the world was then, as it is now, uncertain. If the U.S. was seen as creditworthy, borrowing for national defense (defense spending a legitimate function of government in the eyes of realists) during times of war would be easier.

David Hume

At the same time the great philosopher David Hume said “sovereign borrowing breeds ‘poverty,’ national ‘impotence,’ and ‘subjection to foreign powers.'” Salsman classifies David Ricardo as a debt pessimist too, but acknowledges the differences within the group. Ricardo felt, like your reviewer, that “public spending itself constitutes the real economic burden, regardless of how funded, because it deprives private actors of the saving, capital accumulation, and productivity gains necessary for long-term prosperity.”  Absolutely. Government spending brings instantaneous injury to the economy for it depriving the productive of resources that would otherwise be put to higher use.

On the optimist side Robert Malthus believed in the impossible whereby supply could exceed demand, so he viewed deficit spending “as a ‘cure’ for gluts.” Interesting there is that Malthus apparently knew, like Ricardo, that the spending dissolved wealth, but still felt it was necessary “to dissipate ‘excess’ aggregate supply.” A.C. Pigou was more sanguine about British borrowing since so much of the debt was owed within Britain itself.And to show how much Pigou influences public debt optimists today, Salsman adds that he cheered deficit spending that would redistribute the wealth of the rich to the middle class and poor “because they save less.” As Pigou put it, “The bulk of this money is pretty sure to be expended on the purchase of consumption goods, and so indirectly in creating money income for producers of those goods.”

Ok, per Pigou, the rich should be fleeced, then paid back a percentage of what was taken from them through consumption. Naturally Pigou’s analysis ignored that his scenario included no production, and worse, no investment in future production; investment that would have been more likely had the rich been able to hold onto their wealth in the first place. Fear not, it gets worse.

Secular Stagnation

Lawrence Summers’ hero Alvin Hansen, he of “secular stagnation” fame, felt “prodigality may be the appropriate social virtue in a society in equilibrium at underemployment.” Forget that savings never sit idle, and also forget that no economy can progress without the savings that fund innovation, to Hansen government issuance of debt with an eye on spending was a “means of providing adequate liquidity in a growing economy.”

Abba Lerner felt debt was ok since “we owe it to ourselves,” plus the debt wasn’t burdensome in a broad sense because debt payments are “received by the citizens and government bondholders.” This is perhaps what helped inform Keynes’s line about the “fools” in the economics profession who were allegedly carrying the banner for his views. For an economist to presume no present burden when government is extracting capital from the private economy is the height of foolishness. Fear not, however, it gets even stupider.

Thomas Piketty loves wealth redistribution while bemoaning debt because “it usually has to be repaid.” Piketty would prefer to “tax the wealthy rather than borrow from them.” To this endlessly naïve economist, when governments sell debt to the rich, the rich grow wealthier through ownership of bonds and their income streams. You can’t make this up, except that you don’t need to. Never forget that Piketty isn’t a fan of private investment either because in the process of capitalizing companies (on the way to voluminous opportunity creation for individuals), investors are getting rich in the process if their courageous investments bear fruit. When they succeed, it’s the rich getting richer.

Misesian Fresh Air

On the other hand, Ludwig von Mises was a breath of fresh air. Mises all-too-correctly pointed out that “Keynesian economics and the political process are almost entirely focused on short-run demand-side concerns while largely ignoring the long-run importance of economic productivity.” Precisely. Along these lines, a few years ago Alan Blinder penned an op-ed for the Wall Street Journal in which he talked up the allegedly positive demand implications that would spring from increased government spending. What he missed is that demand is always and everywhere the result of production first, and production is more abundant the more that savings and investment power enhancements that boost individual productivity.

Yes, Keynesianism is all about short-term demand, all at the expense of much greater production (and much greater subsequent demand) in the long-term given the truth that savings author progress. Demand is the easy part, and it’s not something economists or politicians should spend any time worrying about. Much thanks go to Salsman for compiling countless opinions on the subject of spending and debt. There are more to come, but this review will only scratch the surface.

Back to government spending in a broad sense, Salsman adds that government borrowing was relatively cheap in the 18th and 19th century (“typically 3-6 percent”) because “most sovereigns were fiscally prudent.” Other than issuing larger sums of debt during war, Salsman indicates that they “otherwise eschewed chronic budget deficits.” Of greater importance is that governments used “various pre-commitment devices – sinking funds, annuities, and the gold standard – to assure creditors of timely repayment in money that would hold its value over time.”

There’s no real mystery here behind the government debt surge. Governments could borrow because investors trusted the quality of the debt securities paying out income streams in currencies backed by gold, but most important was that good money correlated with surging investment, and subsequent economic growth.

Debt doesn’t power growth as much countries with growing economies can issue lots of debt. Add to all that a theme that Salsman returns to throughout Public Debt: “Only a state can legally compel tax paying, which is crucial to its capacity for debt servicing.” Governments can borrow fairly easily precisely because they can ultimately use force to extract payment on their debt from others. Debt servicing is logically much easier if the people are flush. The latter is important with the book’s future direction in mind.

Credit Worthy

Indeed, rich countries can borrow with ease. Poorer ones struggle to borrow, if at all. If readers doubt this, they need only pull up lists of the nations with the most debt versus the ones with very little. The big debtor nations are predictably the richest countries, while the ones with little debt are almost invariably the poorest. It’s worth repeating that this isn’t to say that deficits and debt power economies forward. Of course they don’t.

Government spending amounts to politicians misallocating precious resources that would otherwise be directed to their highest use by the profit motivated. Government spending is a huge tax on progress.

At the same time, politicians exist to spend. And if we don’t provide them with enough of our earnings, they’re happy to borrow against our future earnings. It’s much easier for them to borrow if investors feel the future earnings of the citizenry will be abundant, and easily taxable. Just as rich individuals and companies can borrow with ease, so can politicians who rule countries populated by the rich.The above truth brings us to one of many myths slayed by Salsman in his excellent book. Reinhart and Rogoff’s alleged insight that countries tip toward decline once their debt to GDP ratios move beyond 90 percent is accepted wisdom within the commentariat. Except that it’s not true. As Salsman reveals throughout Public Debt, England’s debt/GDP ratio reached the 261 percent mark in 1819, but far from it foretelling the country’s long decline, England was on the verge of a century of staggering growth. Considering the U.S., its debt/GDP ratio blew past 120 percent during World War II, only for the U.S. to experience pretty impressive post-war prosperity.

What To Do?

What all of this speaks to is that while debt isn’t on its own the source of country decline, socialistic responses to heavy debt loads are. High levels of taxation are what cause stagnation, and so do efforts by politicians to reduce their debt burdens sans payment. In pressing the previous point with great regularity, Salsman began to soften my broad dismissal of deficits. To me, they still don’t matter in a normal sense simply because the spending is the problem.

Bolstering the previous point for this reviewer, Salsman brings countless economic names from the past back from obscurity, including Italian aristocrat De Viti De Marco who asserted crucially that “the purchase of a public bond is voluntary, hence open to a self-interested, utility-maximizing calculus, while the payment of a tax is compulsory.” De Marco’s observation is one I’ve often made; as in it’s better if governments pay for the right to waste money than it is for them to take it from the productive without compensation. Again, deficits don’t matter. It’s the spending that does. That’s the tax, how the money is raised immaterial.

At the same time, Salsman’s exhaustive discussion of debt once again forced a rethink, and caused me to partially change my mind. No doubt spending is the real tax, but the problem with deficits is that while the borrowing is an act of government expropriating precious capital in order to waste it, we don’t feel it right then. No doubt we do soon enough, no doubt the waste leads to reduced innovation and lower pay, but it’s not seen as quickly and intimately as a direct tax. In that case, wouldn’t taxation meant to pay for all government spending free of borrowing force more prudence on politicians whose spending would fleece voters with tangible immediacy?

Along the same lines, the way in which public debt optimists have long dismissed the creditors, and worse, called for default on creditors (see Piketty), was a reminder of another horror of deficits; as in how politicians dispose of them.

Enter Keynes

Indeed, as one can imagine in a book about government debt, Salsman writes about how politicians go about shrinking it; albeit on the sly. This brings us to John Maynard Keynes. Though Salsman is very critical of the British economist, he indicates that “arguments for perpetual deficit spending and public debt accumulation come not from Keynes but Keynesians.” Those “fools” once again. While Keynes was in no way a public debt pessimist, “he never counseled unmitigated deficit spending.” More notable about Keynes is that while he had no problem with debt per se, he loathed creditors and sought “the euthanasia of the rentier” class.

Most important about Keynes from a public debt perspective is that in describing ways for governments to shrink their debt, he invariably offered up false solutions the harm of which would extend well beyond the supposedly “immoral” creditors.

Explaining Keynes’s suggested ways to default on debt, Salsman said governments could do so “explicitly (by a repudiation, or deliberate non-payment), implicitly (by inflation), and by a taking (levy on rentiers).” Governments have regularly employed the first two, and did so long before Keynes was prominent. Yet here’s the problem with deficits and debt: while government debt is an effect of the wealth produced by the citizenry, governments often respond the wrong way, thus adding insult to the wasteful borrowing/spending injury.

First up is repudiation or deliberate non-payment. To show just how delusional and contradictory are Keynesian debt optimists, they love the extra government spending that debt enables, but loathe the creditors who make the debt possible. Their position is impossible.

At the same time, I’ve long liked the idea of debt “haircuts” or repudiation not out of dislike for the creditors as much as maybe one or the other will cause creditors to skip buying government debt altogether. Arguably the latter would be more prevalent today if institutions like the IMF weren’t so ready to bail out governments, which has long been a way for governments to bail out banks and other creditors with high exposure to government debt.

Devaluation

Of course the much more problematic form of debt default or repudiation is devaluation of the income streams that debt securities pay out. Amazingly, Keynes well understood the horrid implications of devaluation, yet his dislike of creditors trumped the pain experienced by everyone thanks to devaluation. As Keynes so correctly put it, devaluation “is the form of taxation which the public find hardest to evade.”

While there are myriad ways for the citizenry to get around excessive headline rates of taxation, when governments repudiate debt through currency devaluation, everyone suffers. People earn dollars, pounds, euros, yen, and all manner of other currencies, which means devaluations meant to reduce government debt mean everyone suffers a shrinking paycheck. Much worse, the devaluation is a repellent to the very investors and savers whose capital commitments author economic progress to begin with.The point of all this is that deficits in isolation trump direct taxation as a way for governments to raise funds simply because they’re paying for the right to consume precious capital, as opposed to expropriating it without compensation for those fleeced. The problem is that deficits don’t occur in isolation. Or they don’t always. Precisely because governments want to borrow and spend sans the long-term implications of doing just that, we all frequently suffer the cruel tax that is devaluation so that wasteful governments can shrink what they owe.

To those who think the U.S. has never defaulted, think again. Even Reinhart and Rogoff described FDR’s 1933 decision to devalue the dollar from 1/20th of an ounce of gold to 1/35th as a debt default, and looked at in terms of the dollar since then, it’s apparent that the U.S. Treasury has been rampantly defaulting ever since. As of this writing a dollar buys 1/1200th of a gold ounce. America’s creditors have long suffered defaults, and the American people have had to accept the slower growth that is the tautological result of “implicit,” or “stealth” default. The seen is that despite Treasury’s horrid oversight of the dollar the U.S. remains the richest, most dynamic country in the world. But imagine the unseen. Imagine where the U.S. economy would be today absent the serial dollar devaluations that have needlessly shrunk investment that would have otherwise been directed to mass experimentation ahead of stunning advance.

Why Deficits are Bad

So, at risk of being repetitive, Salsman has me convinced of the horrors of deficits, but not for the reasons that compel most. Spending remains the problem. The problem with deficits is once again the socialistic responses of governments whereby they make everyone pay the massive, economy-sapping tax that is devaluation as a way of shrinking what they owe.

All of this speaks to another area of disagreement with Salsman ahead of the ones that will conclude this review. He correctly notes that the Keynesian “demand-side model was so discredited in the 1970s” in concert with vindication for supply-side economics, which “delivered such positive financial-economic results in the 1980s and 1990s.”

There’s no dispute that supply side won precisely because the latter is a tautology: when the tax, regulatory, tariff, and debased money barriers to production are shrunk, booming economic growth is the result. Supply side makes perfect sense, but it’s arguable that supply-siders have become ridiculous to the point that their policies have become self-suffocating. Indeed, supply siders, in their worship of the rising revenue implications of tax cuts, have forgotten that government spending is the biggest tax of all.

And in ignoring rising government spending, they’ve allowed the genius of their tax cut, deregulation, free trade, good money policy mix to be neutered. Figure that the posthumous John F. Kennedy tax cuts were great for economic growth, and as a result, gifted Treasury with a revenue surge in 1965. The latter gave Congress the means to for instance introduce Medicare; a program that was initially funded with $3 billion. The problem modernly is that a program which once cost $3 billion is projected to cost $1 trillion by 2025. Taking nothing away from the good of supply side policies, if not met with spending cuts, they’re not nearly as effective as they otherwise would be.

The Supply Side Problem

The problem with supply siders isn’t their belief that deficits don’t matter, but it’s a major problem their belief that government spending doesn’t matter. This reviewer wishes Salsman had spent more time on this point. As a deficit realist, Salsman plainly doesn’t like government expanding beyond strict constitutional limits. Ok, but rising federal revenues have enabled just that, not to mention that it’s much easier for governments to issue new debt if incoming tax revenues are abundant.Moving on from this quibble, Public Debt is wildly informative, and once again a magisterial myth slayer. Salsman spends a lot of time on Nobel Laureate James Buchanan’s contributions to the debt story, contributions that were important. He showed the “public choice” side of this whereby politicians act in what they deem their self-interest which is to spend with abandon.

At the same time, the public debt pessimist in Buchanan presumed to know a number, or a “critical threshold” after which government debt would cause economic decline. Buchanan offered a “moral case” for repudiation that supports Salsman’s wondrous contention previously mentioned that the pessimists and optimists are more alike than they know. Both sides endorse clipping the creditors who make all the waste possible.

As to magisterial myths slayed, through England and the U.S. Salsman as previously mentioned shows that if governments don’t respond to major debt with excessive socialism, it’s not an economy killer as Reinhart and Rogoff contend, and as did Buchanan. While England once again had a debt that was 261 percent of GDP as of 1819, by 1914, amid booming economic growth, the number had declined to roughly 35 percent.

The U.S. ratio as previously mentioned grew beyond 120 percent during World War II, but it shank to 35 percent by 1982. Japan presently has a debt/GDP ratio of over 225 percent. That it does exposes the absurdity of Krugman’s contention that deficit spending boosts growth, but at the same time it exposes as faulty the Reinhart/Rogoff magic number. Though not booming as it once did, Japan remains a very rich country. Rich countries can easily borrow. The problem is, as always, the spending. Imagine how much more advanced Japan’s economy would be today had its political class not responded to the country’s early 1990s recession with so much waste.

Deficits and Interest

Regarding the wildly popular view that deficit spending drives up interest rates, Salsman makes a mockery of what’s plainly absurd. Tracking the deficit spending of G-7 nations, Salsman finds that amid average debt/GDP ratios of 37.7 percent in 1980, the average interest rate on 10-year government bonds paid by those countries was 11.9 percent. Fast forward to 2000 when the debt/GDP ratio for those same countries was 74.5 percent, the average rate was 5 percent. In 2015, with the debt/GDP ratio having surged to 116 percent, the average 10-year government bond coupon was 1.3 percent. Though it’s common to say that rising deficits correlate with rising rates to service those deficits, there’s no evidence that the latter is true. Salsman’s book is beyond valuable, yet at the same time his statistics unearth another quibble.

On the same page that he provides the above numbers, Salsman contends that central banks “now also act as lenders of last resort to profligate governments,” and that the “reach of central banking expands virtually without limit.” Salsman’s explicit contention is that politicians created central banks to enable their borrowing given his oft-stated view that there’s “no effective limit on central banks’ power and willingness to create fiat money.”

This is not compelling. Sure enough, in communications with Salsman he’s acknowledged that most vastly overstate the power of the Fed, and central banks in general. How then could that which interacts with increasingly neutered banks have so much economic influence, let alone enable broad debt issuance by governments? My view here is that Salsman reverses causation. Central banks that buy a lot of government debt are a certain effect of an otherwise powerful economy, as opposed to an enabler of government debt issuance.

My evidence is Salsman’s very own mention of England’s adoption of a gold standard after the Glorious Revolution. Once a desperately poor country, the issuance of good money authored an economic surge that enabled borrowing that subsequently enabled England’s wars, and its colonization of one quarter of the world’s land mass.

In Salsman’s case, he cites the establishment of Britain’s Bank of England in 1694 as the facilitator of Britain’s “financing yet another war with France.” Ok, but if all it took for France to fight toe to toe with England was a central bank, then it could have mimicked Britain’s establishment of one. In truth, what enabled England’s warring was economic growth that gifted its politicians with abundant revenues, not a supposed lender of last resort to governments. Salsman himself references central bank independence as “a mere shibboleth,” which reminds us that any purchasing of debt amounts to one government entity buying from another.

Reducing all of this to the absurd, if central banks could truly enable reckless spending, the central banks of Nigeria and Bahamas could theoretically monetize massive government growth, as could the creation of a central bank in Haiti. But nothing like the latter would materialize simply because central banks can’t alter economic reality. If a government is “desperate for funds,” why the need for a central bank in the first place? What could a central bank do?

Going back to his assertion that there’s “no effective limit on central banks’ power to and willingness to create fiat money,” Salsman is making somewhat of a Keynesian statement himself (in fairness, members of the Austrian School regularly commit the same error) in presuming that central banks, for being central banks, can fix the alleged problem of credit scarcity. But they can’t. Individuals, businesses and governments seek access to “central bank notes” not to stare at the money, but instead do so because of what “money” can be exchanged for.

Credit is always and everywhere created in the private sector; money just a measure that facilitates its exchange and its direction toward future wealth creation. In short, the limit on central banks is that governments, like individuals and businesses, want to exchange money for real things. None of this means that government always does a good job with money, but it does mean central banks are a sideshow contra Salsman and other central bank critics. Much as central bank critics might wish otherwise, and much as the very existence of central banks is an offense to common sense, governments themselves ultimately decide whether to issue good or bad money, not central banks as is so commonly assumed.

Democracy and Deficit

Salsman is not a friend of democracy, and with good reason. Like most reasonable thinkers, he prefers a constitutionally limited federal republic that has very little power; spending or otherwise. Unrestrained democracy is unquestionably bad simply because it empowers the mob to theoretically vote all manner of benefits to itself on the backs of others. Where we part ways somewhat is in his assertion that democracy is the source of excessive spending.

Politicians who exist to spend. If the money’s there, they’ll spend it. India is a democracy, but the size of its debt isn’t very notable. What ultimately powers spending and borrowing is the wealth of the citizenry that sadly gifts politicians with surging revenue streams that enable endless spending and borrowing. Rich countries can borrow, and they do. The fix is constitutionally limited government. Always.

Lastly, Salsman asserts that “political elites’ electoral incentive is to maximize spending, minimize taxation, and borrow or print money to plug the gap, while treating wealth minority groups and future generations as fiscal commons worth exploiting.” This doesn’t ring true.

Indeed, to separate direct taxation from borrowing and spending is to make a distinction without a difference. Either way, the damage done by government is immediate since government spending (even that which is constitutional) amounts to instantaneous mis-allocation of precious resources. As for the popular notion that deficits burden future generations, it’s accepted wisdom that is also utter nonsense. The burden isn’t debt that can easily be grown out of if government is limited.

More realistically, we all suffer government spending in the here and now thanks to greatly reduced progress wrought by government consuming the resources necessary for advance. As for future generations, the true burden of spending in the here and now is that experimentation and advance that would have otherwise taken place in the past, only to set the stage for greater advance in the future, hasn’t happened.

The burden we leave for those in the future is a world that is much less advanced than it otherwise would be. The spending burdens future generations with work and experimentation that would have otherwise already been completed, and that will detract from much more productive toil had government not previously wasted resources. Something tells me Salsman knows this, but the idea of debt as “someone else’s” burden is very much ingrained.

Still, the minor quibbles should in no way be taken as a reason for readers to not purchase The Political Economy of Public Debt. Richard Salsman has written an endlessly excellent book that expertly tells the story of debt and its implications. Readers will come away exponentially more knowledgeable, and with minds that have been changed at the very least a little, but most likely a lot.

Readers will come away exponentially more knowledgeable, and with minds that have been changed at the very least a little, but most likely a lot.

John Tamny

John Tamny is a Forbes contributor, editor of RealClearMarkets, a senior fellow in economics at Reason, and a senior economic adviser to Toreador Research & Trading. He’s the author of the 2016 book Who Needs the Fed? (Encounter), along with Popular Economics (Regnery Publishing, 2015).

EDITORS NOTE: Get trained for success by leading entrepreneurs.  Learn more at FEEcon.org

8 Big-Government Policies that Hurt the Poor by Patrick Tyrrell

It’s clear that many big government policies are creating winners and losers in America.

The story has been the same for decades. Government makes friends with a company or an industry, blocks out the competition with regulation, and in some cases gives the company subsidies.

Such cronyism is bad for innovators and for consumers. But fewer people realize that it’s also bad for the poor. A recent report from The Heritage Foundation detailed 23 of these big government policies that hurt the poor, and provided concrete ways to address them.

Winners and losers from big government policies are not always clear. And yet for some crony policies, the winners and losers are very clear. The winners are a small group of identifiable government cronies, while the losers include people of little or no influence with the government.

Here is a look at eight big government policies from the report that benefit government cronies at the expense of other groups of people, including the poor.

1. Renewable Fuel Standard

The Energy Policy Act of 2005 mandated that renewable fuels be mixed into America’s gasoline supply, primarily by using corn-based ethanol. Then, the 2007 Energy Independence and Security Acts significantly increased the amount that must be mixed in.

This mandate is known as the Renewable Fuel Standard. It forces the use of higher levels of biofuels than the market would otherwise bear. The result has been higher food and fuel prices.

Who Wins: Corn farmers, soybean farmers, and biofuel companies.

Who Loses: Consumers of gasoline, consumers of food, and farmers that rely on feedstock and restaurants.

2. Federal Sugar Program

The federal government tries to limit the supply of sugar that is sold in the United States.

This federal sugar program uses a combination of price supports, marketing allotments that limit how much sugar processors can sell each year, and import restrictions that reduce the amount of imports.

As a result, the price of American sugar is consistently higher than world prices.

Who WinsSugar growers and sugar harvesters.

Who Loses: Workers in sugar-using industries, and consumers of food (including bread) that contains sugar.

3. Catfish Inspection Program

As a result of the U.S. Department of Agriculture’s catfish inspection program, the USDA inspects catfish while the Food and Drug Administration inspects all other seafood.

This creates duplication because seafood processing facilities that produce both catfish and any other seafood will have to deal with two different types of seafood regulatory schemes instead of just one.

This program also creates a non-tariff trade barrier that will make it extremely difficult for foreign catfish exporters to export to the U.S., likely reducing competition for the domestic catfish industry.

Who WinsDomestic catfish producers.

Who Loses: Domestic catfish consumers.

4. The Merchant Marine Act of 1920 (the Jones Act)

The Merchant Marine Act – nicknamed after Sen. Wesley Jones, R-Wash. – requires the use of domestically built ships when transporting goods between U.S. ports. The ships must also be U.S.-owned, and mostly U.S.-crewed.

Who WinsThe U.S. domestic shipping industry.

Who Loses: The U.S. military, automobile drivers, users of propane and heating oil, and anyone benefitting from the trade and transportation of goods between U.S. ports.

5. Occupational Licensure

Licensure laws create government requirements for being allowed to practice a profession. These requirements exist even though the market would produce certification options if consumers desired such information.

Who WinsWorkers who have already obtained licenses.

Who Loses: People wanting to work who can’t because they don’t have a license, and consumers who have to pay higher prices for services.

6. Economic Development Takings

On June 23, 2005, the U.S. Supreme Court held in Kelo v. City of New London that the government can seize private property and transfer it to another private party for economic development.

This type of taking was deemed to be for “public use” and ruled a proper use of the government’s eminent domain power under the Fifth Amendment of the United States Constitution.

Who Wins: People who successfully lobby the government to seize other people’s property for financial gain.

Who LosesProperty owners who have their property seized.

7. Home-Sharing Regulations

Local governments sometimes ban or excessively regulate home-sharing – that is, renting out one’s home to accommodate travelers, such as through Airbnb.

When this happens, consumers have less choices of where to stay when traveling, hotels can charge higher prices, and homeowners and renters can’t make full use of their legally possessed homes to earn income for themselves.

Who WinsHotel employee union lobbies, and the hotel industry.

Who Loses: Homeowners and renters.

8. Ride-Sharing Regulations

In some state and local jurisdictions (such as outside Portland, Oregon; Alaska; and Austin, Texas), the government bans or heavily regulates ride-sharing companies like Uber and Lyft.

These companies are popping up all over because they meet consumers’ needs, but they are being held down in certain cities where the government backs the establishment industry.

Who WinsTraditional taxicab companies.

Who Loses: Uber, Lyft, and drivers looking for low barriers to entry; taxicab customers; customers who want to go in or out of certain neighborhoods that traditional taxi drivers avoid; and users of public transportation seeking to complete the “last mile” of their trips.

When industries or groups win special favors from politicians at the expense of ordinary Americans and the poor, it is an affront to freedom – especially to the economic freedom of the poor.

Policies that drive up prices – especially of commodities – are harder to absorb if you are poor.

The policies listed above can block off the only escape route that poor people have from poverty, preventing them from doing what they are good at for a living, for example, or from renting out their home or other property.

All Americans should have the same opportunities open to them. But when government cronyism rears its ugly head, they don’t.

Those who fall on the losing side of cronyism are more likely to agree with President Ronald Reagan when he said, “The nine most terrifying words in the English language are: I’m from the government and I’m here to help.”

Reprinted from Daily Signal.

Patrick Tyrrell

Patrick Tyrrell is a research coordinator in The Heritage Foundation’s Center for Data Analysis.

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Tillerson Cuts 2,300 Jobs From Bloated State Department

Let’s hope that as he makes these cuts and streamlines State Department operations, Tillerson clears out the Obama loyalists who are trying to impede President Trump from draining the swamp and implementing needed reforms.

state_department“Tillerson Cuts 2,300 Jobs From Bloated State Department,” by V Saxena, Conservative Tribune, April 29, 2017:

Secretary of State Rex Tillerson has begun fulfilling President Donald Trump’s mission to reduce the size of government and save taxpayers a boatload of money by proposing to eliminate 2,300 jobs at the State Department.

If implemented, the plan would trim the State Department’s budget by more than a quarter and its staff by approximately 3 percent, according to The Associated Press.

The majority of the job cuts would be attained through attrition, or the process of waiting for employees to simply retire, while the remainder would be acquired via buyouts. As noted by The AP, buyouts would be offered first to employees over the age of 50 who have at least two decades of government service under their belts.

The cuts were expected to take approximately two years to materialize, according to Bloomberg, though the results could wind up lasting far longer.

During an interview Friday with NPR, Tillerson explained that he was hoping to make the department far more efficient and effective.

“We are undertaking a reorganization of the State Department, but it’s not just a collapse of boxes,” he said. “What we really want to do is examine the process by which the men and women — the career foreign service people, the civil servants, our embassies — how they deliver on that mission.”

Suffice it to say, just throwing a bunch of people together into one department wasn’t doing the trick. Changes were needed, and he intended to bring forth those changes.

Also on the chopping block were departmental policies: “(T)here are a lot of rules — and people follow the rules, and you look at the rule, and you say … ‘Why do we do it that way?’ And no one can seem to remember why we did it that way.”…

EDITORS NOTE: This column originally appeared on The Geller Report.

The President’s Tax Plan Massacres the 1%ers in the 10 States with Highest-Tax Rates

As the media slices and dices the proposed tax plan offered by President Trump’s Treasury Secretary Steven Mnuchin on April 26th, one thing is clear – the rich will pay more in taxes than the working class.

In the Daily Signal article How Trump’s Tax Plan Would Affect High-Tax States Like California, New York Fred Lucas writes:

High-income earners in high-tax states would see a federal tax rate cut, but may pay more in the end if they’re unable to deduct state and local taxes under President Donald Trump’s tax reform proposal announced Wednesday.

The White House released the contours of his tax reform proposal that would lower tax rates and reduce the number of tax brackets. However, the plan would also reduce the number of tax deductions.

When a reporter asked if deducting taxes on state and local income taxes would also be eliminated, Treasury Secretary Steven Mnuchin answered, “Yes.”

U.S._Democratic_Party_logo_(transparent).svgSo, Democrats should be very excited about taxing the rich, so will the 99%ers, like Occupy Wall Street, who have been for taxing the rich. This has been the mantra of the Democrat Party – Tax the Rich!

So which are the states with the highest tax rates? The national average for state income taxes is 9.9%. According to the 2017 Tax Guide published on BankRate.com the 10 highest taxed states are:

  1. New York – Tax burden: 12.7%

  2. Connecticut – Tax burden: 12.6%

  3. New Jersey – Tax burden: 12.2%

  4. Wisconsin – Tax burden: 11%

  5. Illinois – Tax burden: 11%

  6. California – Tax burden: 11%

  7. Maryland – Tax burden: 10.9%

  8. Minnesota – Tax burden: 10.8%

  9. Rhode Island – Tax burden: 10.8%

  10. Oregon – Tax burden: 10.3%

President Trump’s plan does what Democrats have made the goal of their platform. Make the rich pay more. But wait!

Lucas reports, “House Republicans were already reportedly considering eliminating the deduction on state and local taxes, which could disproportionately affect wealthy people in high-tax blue states such as New York and California.” The question is: Why?

The President’s tax plan would put pressure on the ten states listed above to lower their state income tax rates. Isn’t this ultimately good for the successful working class people of New York and California? The 99%ers!

This provision, among the other key policy shifts in the President’s tax plan are bold and make good on his promise to cut taxes, just not on the rich, many of whom have said they are happy to pay more in taxes.

Seems like a win-win to me. How about you.

RELATED ARTICLES:

Trump goes big on tax reform

Trump tax plan prompts GOP fears about deficit

Trump Tax Plan Cheat Sheet | Fox Business

This Senate Bill Will Make Federal Regulations Smarter and More Effective

Americans complain about over regulation. As rule after rule has piled up over the decades, they have good reason to complain.

But here’s an interesting observation: Regulations written by the Obama administration operated under something like a power law. The biggest regulatory costs came from a few regulations, as this American Action Forum chart shows.

American Action Forum chart: Regulatory costs for Top 3 rules versus all others, by year, 2009-2016.
Source: American Action Forum.

Another way of looking at this is a chart from an important report, Taming the Administration State, by the U.S. Chamber’s Environment, Technology & Regulatory Affairs Division.

4x

“The regulatory world is top-heavy, where a majority of costs and benefits are concentrated in three or four measures,” explained AAF’s Sam Bakins.

Regulations with massive burdens include the FCC’s Open Internet Order that converted the internet into a publicly utility, the (stayed) Waters of the United States rule that would give EPA authority over how land is used over large portions of the country, and the (also stayed) Clean Power Plan that would wipe out affordable coal-fueled power plants.

Businesses—especially small businesses— have had to cope with these costly rules and know full well they hold back investment, job creation, and economic growth.

If we focus on the costliest rules, regulators can limit their detrimental effects, make them more effective at achieving their intended goals, or even reevaluate their intended purpose.

To the rescue is the Regulatory Accountability Act (RAA). Sens.  Rob Portman (R-Ohio) and Heidi Heitkamp (D-N.D.) introduced the bipartisan bill in the Senate that would make the first major changes to the federal regulatory process in seven decades.

The RAA is based on three principles for regulatory reform William Kovacs, U.S. Chamber Senior Vice President, Environment, Technology & Regulatory Affairs, laid out earlier this year:

·  Accountability. Federal agencies need to show that the costliest rules are truly needed and are written to use the least costly option available to achieve their objective.

·  Transparency. Agencies must be open about why and how they make key decisions to regulate, and avoid making those decisions in secret under pressure from special interest groups, entirely outside of the normal rulemaking process.

·  Participation. Agencies should be required to inform the public of pending regulatory decisions on high-impact rules early in the process, share their data and economic models, and allow those who will be affected adequate time for public input.

The RAA would focus federal agency efforts on proposed regulations that would have the biggest effects on the economy. The federal government would still have the ability to write necessary regulations. The RAA would only require additional effort on the most-expensive ones in order for them to achieve their intended goals at the lowest cost to our economy.

“Our bipartisan bill would make federal regulations smarter and more effective for everyone impacted by them, support job growth, create certainty, and provide an important check and balance on the president no matter who is in charge,” said Sen. Heitkamp. “Can you imagine if we still used telecommunications systems from World War II? They might get the job done, but they would be slow, potentially faulty, and incredibly inefficient. The same goes for the current 70-year old law which still governs the way federal agencies propose and establish regulations.”

“This legislation would bring our outdated federal regulatory process into the 21st Century by requiring agencies to use the best scientific and economic data available, strengthening checks and balances, and giving the public a voice in the process,” Sen. Portman added.

Business groups support the RAA. Neil Bradley, U.S. Chamber Senior Vice President and Chief Policy Officer, said in a statement:

The rules governing the federal regulatory system were written in the Truman administration, with few updates since then. Now, under the Trump administration, it’s past time to modernize the process. The Regulatory Accountability Act would increase scrutiny of the most expensive rules that cut across industries and sectors, requiring greater transparency and agency accountability. We encourage all Senators to support this bipartisan reform legislation that can encourage business expansion, spur job creation, and ultimately help grow the American economy.

After the House passed the RAA earlier this year, business groups urged the Senate to do the same. “The RAA stands for good governance and getting rules right by bringing transparency, accountability, and integrity to the rulemaking process at federal agencies,” the letter stated. “With the passage of RAA, Congress would be restoring the checks granted to it by the Constitution over a federal regulatory bureaucracy that is opaque, unaccountable, and at times overreaching in its exercise of authority.”

President Trump and the Congress have done quite a bit in the first 100 days of the new administration to lower regulatory burdens on businesses. By passing the RAA into law and improving how federal regulations are made, it would be a victory for a more competitive economy.

Watch Sens. Portman’s and Heidkamp’s press conference where they introduced the RAA.

MORE ARTICLES ON: REGULATORY REFORM

EDITORS NOTE: The featured image is by photographer Andrew Harrer/Bloomberg.