President Trump Proposes Solar Panels on Top of Border Wall — Greenpeace and Sierra Club outraged!

President Donald Trump tells supporters in Cedar Rapids, Iowa that he is considering mounting photovoltaic panels atop his proposed Mexican border wall would allow the project to pay for itself.

President Trump stated, “We’re thinking of something that’s unique, we’re talking about the southern border, lots of sun, lots of heat. We’re thinking about building the wall as a solar wall, so it creates energy and pays for itself. And this way, Mexico will have to pay much less money.”

If approved this would be the largest alternative energy project in the world. But wait…

You would think that organizations who favor alternative power sources such as solar panels and wind power would be pleased with this unique and innovative idea. You would think that they would encourage companies to bid on the Department of Homeland Security contract to build the wall and give those living along both sides of the wall access to renewable energy. Well you would be wrong.

Proposed section of green border wall with solar panels submitted by Thomas Gleason, a Las Vegas construction materials supplier.

In The Daily Signal article titled How Environmental Groups Are Responding to Trump’s ‘Solar Wall’ Pitch Fred Lucas reports:

President Donald Trump’s idea of putting solar panels on his long-promised border wall hasn’t gained a lot of support among top environmental lobbying groups—even though the organizations have long backed solar power as a key renewable energy.

“The problem with talking about solar panels on Trump’s border wall is that it’s science fiction,” Travis Nichols, a spokesman for Greenpeace, a liberal environmentalist group, told The Daily Signal. “Just like clean coal does not exist and will never exist, Trump’s wall with solar panels won’t exist, so it’s irrelevant to discuss climate issues.”

A spokesman with the Sierra Club referred to a tweet storm by the Sierra Club executive director, Michael Brune, reacting to Trump’s proposal for solar panels on the border wall.

Read more.

If solar panels on the border wall is “science fiction” then isn’t the same true for all uses of solar panels?

Here’s a discussion on President Trump’s new green border wall with solar panels designed by Thomas Gleason. He is a construction materials supplier up in North Las Vegas. He says he has submitted a bid for President Donald Trump’s proposed border wall with Mexico.:

President Trump is a builder and entrepreneur. He also keeps his promises. Building the wall is one of those promises. Time for environmentalists and Democrats to jump at this chance to build some big and bold. As President Trump has said, “If your going to think might as well think big.”

It appears those opposing this unique opportunity are small thinkers, or maybe politically motivated?

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Study: The Surprising Effect of Marijuana Legalization on College Students

Researchers from Oregon State University and the University of Michigan studied marijuana use among 10,924 college students at one large Oregon university and six other universities in states that have not legalized marijuana. Using data from the Health Minds Survey, they looked at marijuana use before and after Oregon legalized the drug for recreational use.

They found that marijuana use increased among all college students but was significantly greater among Oregon students compared to those attending universities in non-legal states. Although the legal age for using marijuana in Oregon is 21, more younger students used the drug than older students. Surprisingly, the greatest increase took place among Oregon students who also reported binge drinking (four to five drinks in about two hours). These students were 73 percent more likely to report marijuana use compared to their peers at the other six schools.

Read The Atlantic story here. Read Science Daily summary here. Read journal abstract here.

Contaminated Marijuana Still Reaching Consumers in Oregon

Oregon has the toughest rules in the nation to keep pesticide-tainted marijuana off store shelves, yet contaminated pot continues to be sold. The state wrote even tougher rules but faced such a backlash from growers it modified them somewhat.

The Oregonian/OregonLive recently conducted a spot check to see if the modified rules are keeping pesticide-containing pot from being sold. The media outlet’s 2015 reporting on widespread contamination prompted the state to establish the rules in the first place.

The paper had ten samples tested by two different labs; three came back contaminated. A second round of tests of the same products resulted in only one showing contamination. Everyone – both the state and the industry — is frustrated with the lack of precision in the testing process.

A manager of Oregon’s Health Authority, which wrote the rules, says the state’s system isn’t a promise that every product on the shelf is pure. “I don’t think it’s reasonable for the general public to think that everything is 100 percent clean and safe,” he says. Instead, the system is designed to reduce but not eliminate risk.

Read OregonLive story here.

Senators Reintroduce CARERS Act to Repeal Federal Prohibition Of Medical Marijuana

Would you take a medicine that can contain hazardous pesticides, harmful bacteria, several kinds of fungi, molds, mildew, and even dangerous heavy metals? One whose labeled dose has been shown to be inaccurate? Whose labeled potency has been shown to be untruthful or inconsistent from dose to dose?

Fortunately, the medicines available today are so safe we don’t even think to ask such questions. Advances in science and medicine over the last century extended the average lifespan by 30 years.

Part of the reason for this achievement is the US Food and Drug Administration (FDA), which requires that all medicines be pure, safe, and effective before they can be marketed to the public. Drug makers spend millions of dollars and many years to develop and test a new medicine to obtain FDA approval. And patients who wish to take part in clinical trials to test the new medicine are told all its known harms so they can decide whether to participate.

But several members of Congress have decided such protections are not necessary for marijuana. They have reintroduced a bill to legalize medical marijuana in states that legalized the drug for medical use despite the fact that not one medical marijuana product produced in those states has been approved by FDA.

A particular irony is that the lead senator introducing the bill, Rand Paul, a libertarian who wants to reduce the size of government, is creating a situation where the states will need to create 50 FDA’s to protect the public health.

Or, states can take the view of the Oregon Health Authority manager in the story above:
“I don’t think it’s reasonable for the general public to think that everything [every marijuana medicine] is 100 percent clean and safe.”

Buyer beware.

Read A Libertarian Future story here. Read Senator Booker’s press release here.
Read Carers Act here.

New Study Estimates the Cost of Driving Under the Influence of Cannabis in Canada

In a first of its kind study, the Canadian Centre on Substance Use and Addiction calculated the number of Canadians who use marijuana (10 percent) and drive under the influence (just under half of users) and the estimated costs associated with such behavior. Data were from the year 2012.

Driving Under the Influence of Cannabis (DUIC) collisions caused 75 deaths at a cost of $8,532,200 per death, 4,407 injuries at a cost of $84,600 per injury, and 7,794 people involved in property damage at a cost of $10,700 per person. Total costs add up to $1.09 billion.

Sadly, those ages 16-34 who make up approximately one-third of the population accounted for nearly two-thirds of the victims.

Read Canadian Centre on Substance Use and Addiction press release here. Read journal article here.

Entrepreneur Explains How to Set Up a Home Marijuana Garden as The Fresno Bee Warns That ER Docs Are Seeing Frequent Cases of Cannabinoid Hyperemesis Syndrome (CHS)

Emergency room physicians have seen an uptick in compulsive vomiting since California legalized marijuana for recreational use last November. The patients’ vomiting is accompanied by frantic screaming and kicking.

The phenomenon is called Cannabinoid Hyperemesis Syndrome of CHS. It occurs exclusivity in chronic marijuana users and was not identified until 2004 when Australian doctors made the link between chronic use and CHS.

Doctors say THC and other cannabinoid concentrations are much higher in today’s marijuana and may be contributing to more cases. The only long-term treatment is to stop using pot.

Read Fresno Bee story here.

Tobacco-Marijuana Nexus Begins . . .

Imperial Brands, a tobacco giant in the UK that removed the word “tobacco” from its name 18 months ago, is looking to diversify as smokers quit. It has hired medical marijuana expert Simon Langelier, who is chairman of the Canadian firm PharmaCielo which supplies cannabis oil extracts. Prior to that, Mr. Langelier spent 30 years at rival tobacco firm Philip Morris.

Imperial chairman Mark Williamson said Imperial will benefit from Mr. Langelier’s experience in tobacco and “wider consumer adjacencies.”

Skeptics have long warned that the tobacco industry, given its expertise in crop farming and distribution, will likely join and probably take over the marijuana industry. If so, it will likely apply its Joe Camel marketing tactics targeting adolescents as new smokers to targeting teens as new marijuana users.

Read the Independent story here.

Pictured: a Nevada legislator on a study tour of medical marijuana dispensaries, sniffs sample product.

. . . And So Does the Alcohol-Marijuana Nexus

The legalization proponents who wrote the Nevada recreational marijuana ballot initiative, which passed last November, had some help from the state’s alcohol industry. Mysteriously, the law specifies that all marijuana grown in Nevada will be distributed by alcohol distributors. This is unique to Nevada.

The state wants to license others to sell pot, but the liquor lobby has sued the state claiming it has exclusive marijuana distribution rights.

Just this afternoon, the judge hearing the lawsuit ruled for the alcohol industry and against the Nevada Department of Taxation which would have issued temporary licenses to medical marijuana dispensaries to sell recreational pot between July 1 and January 1, 2018 when licensing regulations will be completed.

Read Daily News article here.

President Trump Strengthens U.S. Policy toward Corrupt Castro Regime

Manuel Artine Buesa (center) is pictured with President John F. Kennedy.

President Donald Trump on Friday, June 16th, 2017, announced a ban on doing business with Cuban military during a trip to Miami, from the Manuel Artíme Theater and signed a Presidential Memorandum to deal with the Communist regime before returning to Washington, D.C.

The theater is named after Manuel Artíme Buesa who was a Cuban physician. Artíme was a Cuban-America and fierce anti Communist.

According to HistoryofCuba.com:

Artíme was born in Cuba on January 29, 1932. Before embarking on a career of politics, Artime received a degree in medicine, and may have served as a medic in the war against Cuban dictator Fulgencio Batista (although this is often denied by Castro supporters).

After moving to the U.S. in opposition to Castro (with Tony Varona, Rafael Quintero, Aureliano Arango and Jose Cardona) he helped establish the Movement for the Recovery of the Revolution.

At the 1960 Democratic National Convention, Artíme met future president John F. Kennedy.

Artine became the leader of the failed U.S. supported Bay of Pigs invasion of Cuba in 1961. Artine was later ransomed from his Cuban jail for $500,000.

Dr. Artine died of cancer in Miami, Florida on November 18th, 1977 at the age of 45.

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Statement of Support for President Donald Trump on U.S. Policy Towards Cuba

National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba

Section 1.  Purpose.

The United States recognizes the need for more freedom and democracy, improved respect for human rights, and increased free enterprise in Cuba. The Cuban people have long suffered under a Communist regime that suppresses their legitimate aspirations for freedom and prosperity and fails to respect their essential human dignity.

My Administration’s policy will be guided by the national security and foreign policy interests of the United States, as well as solidarity with the Cuban people.  I will seek to promote a stable, prosperous, and free country for the Cuban people.  To that end, we must channel funds toward the Cuban people and away from a regime that has failed to meet the most basic requirements of a free and just society.

In Cuba, dissidents and peaceful protesters are arbitrarily detained and held in terrible prison conditions.  Violence and intimidation against dissidents occurs with impunity.  Families of political prisoners are not allowed to assemble or peacefully protest the improper confinement of their loved ones.  Worshippers are harassed, and free association by civil society organizations is blocked.  The right to speak freely, including through access to the internet, is denied, and there is no free press.  The United States condemns these abuses.

The initial actions set forth in this memorandum, including restricting certain financial transactions and travel, encourage the Cuban government to address these abuses.  My Administration will continue to evaluate its policies so as to improve human rights, encourage the rule of law, foster free markets and free enterprise, and promote democracy in Cuba.

Sec. 2. Policy.

It shall be the policy of the executive branch to:

(a)  End economic practices that disproportionately benefit the Cuban government or its military, intelligence, or security agencies or personnel at the expense of the Cuban people.

(b)  Ensure adherence to the statutory ban on tourism to Cuba.

(c)  Support the economic embargo of Cuba described in section 4(7) of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (the embargo), including by opposing measures that call for an end to the embargo at the United Nations and other international forums and through regular reporting on whether the conditions of a transition government exist in Cuba.

(d)  Amplify efforts to support the Cuban people through the expansion of internet services, free press, free enterprise, free association, and lawful travel.

(e)  Not reinstate the “Wet Foot, Dry Foot” policy, which encouraged untold thousands of Cuban nationals to risk their lives to travel unlawfully to the United States.

(f)  Ensure that engagement between the United States and Cuba advances the interests of the United States and the Cuban people.  These interests include: advancing Cuban human rights; encouraging the growth of a Cuban private sector independent of government control; enforcing final orders of removal against Cuban nationals in the United States; protecting the national security and public health and safety of the United States, including through proper engagement on criminal cases and working to ensure the return of fugitives from American justice living in Cuba or being harbored by the Cuban government; supporting United States agriculture and protecting plant and animal health; advancing the understanding of the United States regarding scientific and environmental challenges; and facilitating safe civil aviation.

Sec. 3. Implementation.

The heads of departments and agencies shall begin to implement the policy set forth in section 2 of this memorandum as follows:

(a)  Within 30 days of the date of this memorandum, the Secretary of the Treasury and the Secretary of Commerce, as appropriate and in coordination with the Secretary of State and the Secretary of Transportation, shall initiate a process to adjust current regulations regarding transactions with Cuba.

(i)    As part of the regulatory changes described in this subsection, the Secretary of State shall identify the entities or subentities, as appropriate, that are under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel (such as Grupo de Administracion Empresarial S.A. (GAESA), its affiliates, subsidiaries, and successors), and publish a list of those identified entities and subentities with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.

(ii)   Except as provided in subsection (a)(iii) of this section, the regulatory changes described in this subsection shall prohibit direct financial transactions with those entities or subentities on the list published pursuant to subsection (a)(i) of this section.

(iii)  The regulatory changes shall not prohibit transactions that the Secretary of the Treasury or the Secretary of Commerce, in coordination with the Secretary of State, determines are consistent with the policy set forth in section 2 of this memorandum and:

(A)  concern Federal Government operations, including Naval Station Guantanamo Bay and the United States mission in Havana;

(B)  support programs to build democracy in Cuba;

(C)  concern air and sea operations that support permissible travel, cargo, or trade;

(D)  support the acquisition of visas for permissible travel;

(E)  support the expansion of direct telecommunications and internet access for the Cuban people;

(F)  support the sale of agricultural commodities, medicines, and medical devices sold to Cuba consistent with the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7201 et seq.) and the Cuban Democracy Act of 2002 (22 U.S.C. 6001 et seq.);

(G)  relate to sending, processing, or receiving authorized remittances;

(H)  otherwise further the national security or foreign policy interests of the United States; or
(I)  are required by law.

(b)  Within 30 days of the date of this memorandum, the Secretary of the Treasury, in coordination with the Secretary of State, shall initiate a process to adjust current regulations to ensure adherence to the statutory ban on tourism to Cuba.

(i)    The amended regulations shall require that educational travel be for legitimate educational purposes.  Except for educational travel that was permitted by regulation in effect on January 27, 2011, all educational travel shall be under the auspices of an organization subject to the jurisdiction of the United States, and all such travelers must be accompanied by a representative of the sponsoring organization.

(ii)   The regulations shall further require that those traveling for the permissible purposes of non academic education or to provide support for the Cuban people:

(A)  engage in a full-time schedule of activities that enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities; and

(B)  meaningfully interact with individuals in Cuba.

(iii)  The regulations shall continue to provide that every person engaging in travel to Cuba shall keep full and accurate records of all transactions related to authorized travel, regardless of whether they were effected pursuant to license or otherwise, and such records shall be available for examination by the Department of the Treasury for at least 5 years after the date they occur.
(iv)   The Secretary of State, the Secretary of the Treasury, the Secretary of Commerce, and the Secretary of Transportation shall review their agency’s enforcement of all categories of permissible travel within 90 days of the date the regulations described in this subsection are finalized to ensure such enforcement accords with the policies outlined in section 2 of this memorandum.

(c)  The Secretary of the Treasury shall regularly audit travel to Cuba to ensure that travelers are complying with relevant statutes and regulations.  The Secretary of the Treasury shall request that the Inspector General of the Department of the Treasury inspect the activities taken by the Department of the Treasury to implement this audit requirement.  The Inspector General of the Department of the Treasury shall provide a report to the President, through the Secretary of the Treasury, summarizing the results of that inspection within 180 days of the adjustment of current regulations described in subsection (b) of this section and annually thereafter.

(d)  The Secretary of the Treasury shall adjust the Department of the Treasury’s current regulation defining the term “prohibited officials of the Government of Cuba” so that, for purposes of title 31, part 515 of the Code of Federal Regulations, it includes Ministers and Vice-Ministers, members of the Council of State and the Council of Ministers; members and employees of the National Assembly of People’s Power; members of any provincial assembly; local sector chiefs of the Committees for the Defense of the Revolution; Director Generals and sub–Director Generals and higher of all Cuban ministries and state agencies; employees of the Ministry of the Interior (MININT); employees of the Ministry of Defense (MINFAR); secretaries and first secretaries of the Confederation of Labor of Cuba (CTC) and its component unions; chief editors, editors, and deputy editors of Cuban state-run media organizations and programs, including newspapers, television, and radio; and members and employees of the Supreme Court (Tribuno Supremo Nacional).

(e)  The Secretary of State and the Representative of the United States to the United Nations shall oppose efforts at the United Nations or (with respect to the Secretary of State) any other international forum to lift the embargo until a transition government in Cuba, as described in section 205 of the LIBERTAD Act, exists.

(f)  The Secretary of State, in coordination with the Attorney General, shall provide a report to the President assessing whether and to what degree the Cuban government has satisfied the requirements of a transition government as described in section 205(a) of the LIBERTAD Act, taking into account the additional factors listed in section 205(b) of that Act.  This report shall include a review of human rights abuses committed against the Cuban people, such as unlawful detentions, arbitrary arrests, and inhumane treatment.

(g)  The Attorney General shall, within 90 days of the date of this memorandum, issue a report to the President on issues related to fugitives from American justice living in Cuba or being harbored by the Cuban government.

(h)  The Secretary of State and the Administrator of the United States Agency for International Development shall review all democracy development programs of the Federal Government in Cuba to ensure that they align with the criteria set forth in section 109(a) of the LIBERTAD Act.

(i)  The Secretary of State shall convene a task force, composed of relevant departments and agencies, including the Office of Cuba Broadcasting, and appropriate non-governmental organizations and private-sector entities, to examine the technological challenges and opportunities for expanding internet access in Cuba, including through Federal Government support of programs and activities that encourage freedom of expression through independent media and internet freedom so that the Cuban people can enjoy the free and unregulated flow of information.

(j)  The Secretary of State and the Secretary of Homeland Security shall continue to discourage dangerous, unlawful migration that puts Cuban and American lives at risk.  The Secretary of Defense shall continue to provide support, as necessary, to the Department of State and the Department of Homeland Security in carrying out the duties regarding interdiction of migrants.

(k)  The Secretary of State, in coordination with the Secretary of the Treasury, the Secretary of Defense, the Attorney General, the Secretary of Commerce, and the Secretary of Homeland Security, shall annually report to the President regarding the engagement of the United States with Cuba to ensure that engagement is advancing the interests of the United States.

(l)  All activities conducted pursuant to subsections (a) through (k) of this section shall be carried out in a manner that furthers the interests of the United States, including by appropriately protecting sensitive sources, methods, and operations of the Federal Government.

Sec. 4.  Earlier Presidential Actions.

(a)  This memorandum supersedes and replaces both National Security Presidential Directive-52 of June 28, 2007, U.S. Policy toward Cuba, and Presidential Policy Directive-43 of October 14, 2016, United States-Cuba Normalization.

(b)  This memorandum does not affect either Executive Order 12807 of May 24, 1992, Interdiction of Illegal Aliens, or Executive Order 13276 of November 15, 2002, Delegation of Responsibilities Concerning Undocumented Aliens Interdicted or Intercepted in the Caribbean Region.

Sec. 5.  General Provisions.

(a)  Nothing in this memorandum shall be construed to impair or otherwise affect:

(i)   the authority granted by law to an executive department or agency, or the head thereof; or

(ii)  the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b)  This memorandum shall be implemented consistent with applicable laws and subject to the availability of appropriations.

(c)  This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d)  The Secretary of State is hereby authorized and directed to publish this memorandum in the Federal Register.

DONALD J. TRUMP

Europeans Are Paying to Subsidize Jihadists by Barry Brownstein

Does the European welfare system promote hate by allowing people to avoid learning the lessons of mutual dependence and cooperation that the workplace teaches?

All Men Are Brothers

Consider for a moment how little we can do for ourselves. The food we eat, the clothes we wear, the fuel we burn are mostly obtained through the efforts of others. Would we not perish in short order without what Rose Wilder Lane calls the “brotherhood of man”?

Rose Wilder Lane was the daughter of Laura Ingalls Wilder. Rose played a crucial role in bringing her mother’s Little House on the Prairie books to life. Lane’s deep understanding of the human condition shines through in her classic book, The Discovery of Freedom.

Since we cannot survive on our own, Lane explains, “All men are brothers, of one blood, of one human race. They are brothers in one imperative desire to live, in one desperate necessity to combine their energies in order to live.” Thus, “The brotherhood of man is not a pretty phrase nor a beautiful ideal; it is a fact.”Lane adds pointedly, “Men who behave as if the brotherhood of man were not a fact, are alive to do so only because it is a fact.”

In other words, those who harm others are themselves able to thrive only because the efforts of others.

Work is one way through which we learn to create value for others. At work, we are unlikely to succeed if we don’t experience the common humanity we share with our colleagues and customers.

Become a Stranger to Humanity

Now, consider the consequences when able-bodied individuals are paid to not work.

When we don’t work because taxpayers are supporting us, it is easier to lose touch with our common humanity with others. Without creating value for others, we may never develop the facility to appreciate the “brotherhood of man” that keeps us alive.

When individuals no longer must cooperate with each other to thrive, they have perverse incentives to act against the natural brotherhood of man. In Europe, jihadists and potential jihadists are paid to separate themselves from the brotherhood of man.

Consider these facts:

  1. According to The Telegraph, the Manchester bomber Salman Abedi “is understood to have received thousands of pounds in state funding…even while he was overseas receiving bomb-making training.” Abedi never held a job in his life.
  2. Danish citizens who have been granted a “disability” pension have gone to Syria to fight on behalf of ISIS. Other Danish jihadists are receiving unemployment benefits.
  3. When the German newspaper Bild “ran an analysis of the 450 German jihadists fighting in Syria, it found that more than 20% of them have received benefits from the German state.”
  4. Before the notorious radical Islamist preacher Anjem Choudary was convicted and jailed on terrorism charges in 2016, taxpayers in England had funded his hate-filled sermons for over two decades. Choudary had been receiving more than 25,000 pounds a year in benefits and was living in a home worth over 300,000 pounds. (Note, the English pound is worth more than the U.S. dollar.)
  5. Choudary encouraged his followers to not work and instead to live off government benefits: “The normal situation is to take money from the kuffar [non-believers]. You [the kuffar] work, give us the money, Allahu Akhbar.” In Choudary’s warped world, he and his fellow jihadists are entitled to live off the labor of others.

Undermining the Brotherhood of Man

A basic economic law is that you get more of what you subsidize. The more you pay a person to not work, the more isolated, the more alienated that individual can become.

Are subsidized and alienated individuals more receptive to messages of hate? If the subsidized embrace hatred, their thoughts of hatred may go unchallenged by the realities of work life that demand cooperation, not conflict, with others.

If we understand our existence depends on our brothers, we understand the truth of Lane’s observation: “Any man who injures another, injures himself, for human welfare is necessary to his own existence.”

The jihadist living off the sweat of others has no such understanding. Jihadists may believe God is on their side, but radical jihadism is at odds with the truth of the brotherhood of man.

The great divide is not between Muslims and non-Muslims. The great divide is between those who respect the brotherhood of man and those obsessed with hatred.

Why is Europe undermining the brotherhood of man by subsidizing those who hate?

Reprinted from Intellectual Takeout.

Barry Brownstein

Barry Brownstein

Barry Brownstein is professor emeritus of economics and leadership at the University of Baltimore. He is the author of The Inner-Work of Leadership. He delivers leadership workshops to organizations and blogs at BarryBrownstein.com, and Giving up Control.

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.

A True American Healthcare System

As Obamacare continues to reveal itself as an economic and policy disaster, it strikes me that in undoing this healthcare mess, we are not following the path forged for us by the Framers of the Constitution.

For them, the overarching, driving concern was the protection of the liberties of the nation’s citizens from the intrusions of an excessively powerful government. Translated to healthcare, this would mean protecting patients and their doctors from government interference in their most private and personal dealings.

The Framers accomplished this by creating a national government of specific and enumerated powers that was prohibited from directly regulating the actions of the American people. This latter authority was retained by the states, and specifically not given to the federal government.

So, under this strategy, what would the nation’s health care system look like?

Protecting freedoms, not relying on government

In a truly American healthcare system, the responsibility for funding one’s medical care would fall squarely upon the treated individual. In cases where the cost of receiving treatment became excessive, the individual would be aided by his or her family, local churches, and community charitable organizations dedicated to helping those who couldn’t help themselves.

More importantly, healthcare would be delivered in a society where God and worship played a central role in human interaction. And no, not because the government demanded it, but because the people spontaneously shared this unyielding resolve in a state where an environment encouraging public worship existed and the family was viewed as society’s foundational building block.

It was a milieu where people were continuously reminded of their direct relationship with God and of His greatest commandment; that each person love God with all his might and that he love his neighbor as he does himself.

If the healthcare system needed to be more formalized so that hospitals and healthcare could be regulated or a risk-diverting network could be implemented, then such a structure would be generated and executed by the state, not by the federal government. In fact, if the Constitution were properly interpreted, the courts would hold that the federal government was prohibited from directing the states on creating, implementing, or administering a health care program, or taxing the people directly for the purpose of creating a healthcare insurance company.

Healthcare not part of limited federal government

Other than Dr. Benjamin Rush, who voiced his concern for the potential of healthcare being used as a tool in support of a dictatorial regime, it is likely that the Founders gave little thought to the design of the new nation’s healthcare system. Not only was it orders of magnitude beyond their primary concern of building a functional system of government, but they would have clearly maintained that such was not the role of the new federal government. In fact, they did. It was no enumerated, as mentioned above.

If asked, the Framers would have undoubtedly agreed that the solution to the nation’s healthcare challenges lay not in the acts of politicians, but in the moral compass provided to the people by their Creator and in the unyielding pledge that each and every person had instinctively made to his or her neighbor through his or her faith in God.

It is within these concepts that the true solutions to our healthcare woes is to be found, not in the machinations conceived by politicians or bureaucrats.

Hopefully, we as a nation will recall and apply these self-evident truths before we irreparably tarnish our Great Experiment and make true the warnings of Dr. Rush some 240 years ago.

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

This State is on the Brink of Fiscal Meltdown by Daniel J. Mitchell

Illinois is a mess. Taxes and spending already are too high, and huge unfunded liabilities point to an even darker future.

Simply stated, politicians and government employee unions have created an unholy alliance to extract as much money as possible from the state’s beleaguered private sector.

That’s not a surprise. Indeed, it’s easily explained by the “stationary bandit” theory of government.

But while the bandit of government may be stationary, the victims are not. At least not in a nation with 50 different states.

Leaving Illinois

Indeed, Illinois Policy reports that a growing number of geese with golden eggs decided to fly away after a big tax hike in 2011.

Politicians enacted Illinois’ 2011 income-tax hike during a late-night legislative session in January 2011 and raised the state’s personal income-tax rate to 5 percent from 3 percent. This 67 percent income-tax hike lasted for four years, during which time Illinois experienced record wealth flight.

…The short-term increase in tax revenue gained from higher tax rates is offset by the long-term loss of substantial portions of Illinois’ tax base. The average income of taxpayers leaving Illinois rose to $77,000 per year in 2014, according to new income migration data released by the IRS. Meanwhile, the average income of people entering Illinois was only $57,000.

…During the four years of the full income-tax hike, prior to its partial sunset in 2015, Illinois lost $14 billion in annual adjusted gross income, or AGI, to other states, on net.

Illinois has always had an unfavorable ratio when comparing the incomes of immigrants and emigrants. But you can see from this chart that there was a radically unfavorable shift after the tax hike.

The Biggest Loser

Here’s a table from the article showing the 10-worst states.

Illinois leads this list of losers by a comfortable margin. Connecticut, meanwhile, has a strong hold on second place (which shouldn’t be a surprise).

The IP report observes that the states benefiting from internal migration have much better fiscal policy. In particular, most of them are on the admirable list of states that don’t impose income taxes.

…the top five states with favorable income differentials were Florida, Wyoming, Nevada, South Carolina and Texas. Notably, 4 of 5 of these states have no income tax, and none of them have a death tax.

It’s worth noting that the high-tax approach is not producing good results.

Instead, as reported by Bloomberg, the Land of Lincoln is the land of red ink.

Illinois had its bond rating downgraded to one step above junk by Moody’s Investors Service and S&P Global Ratings, the lowest ranking on record for a U.S. stateIllinois’s underfunded pensions and the record backlog of bills… are equivalent to about 40 percent of its operating budget… investors have demanded higher premiums for the risk of owning its debt. Moody’s called Illinois “an outlier among states” after suffering eight downgrades in as many years… like other states, has no ability to resort to bankruptcy to escape from its debts. A downgrade to junk, though, would add further financial pressure by increasing its borrowing costs.

Double Down

Amazing, in spite of this ongoing meltdown, the Democrats who control the state legislature are pushing hard to once again increase the income tax.

Heck, they want to increase all sorts of taxes. Including higher burdens on the financial industry.

Kristina Rasumussen, the President of Illinois Policy, warned in the Wall Street Journal that this was not a good recipe.

Proponents here call it the “privilege tax”… The Illinois bill would put a 20% levy on fees earned by investment advisers. It passed the state Senate in a 32-24 vote Tuesday, and backers are hoping to get it through the House before the legislative session ends May 31. The new tax is pitched as a way to squeeze more revenue – as much as $1.7 billion a year – from hedge funds and private-equity firms…

An earlier version of the Illinois proposal included a provision so that the 20% tax would take effect only if and when New York, New Jersey and Connecticut enacted similar measures. But the bill as written now would impose the tax regardless, and lawmakers will simply have to hope other states follow suit. Yet who says financiers can’t do their jobs just as well in Palm Beach, Fla. – or London, Zurich or Hong Kong? The progressives peddling this idea don’t understand that Chicago competes for these businesses not only with New York and Greenwich, Conn., but with anywhere that can offer cellphone service and an internet connection.

…Railing against supposed “fat cats” might satisfy progressive groups, but lawmakers shouldn’t be in the business of hounding the people who help connect capital with new opportunities for growth… Rather than focus on how to make everyone miserable together, policy makers should work to increase their states’ competitiveness. A start would be to rally against this proposed privilege tax and instead fix the spiraling pension costs and outdated labor rules that are dragging Illinois and other blue states down.

Let’s hope the governor continues to reject any and all tax increases.

If he does hold firm, he’ll have allies.

Including the Chicago Tribune, which recently editorialized about the state’s dire position,

Illinois legislators fumble repeated attempts to send a balanced budget to Gov. Bruce Rauner; while the stack of Illinois’ unpaid bills climbs by the minute; while our leaders prioritize politics over policy… Employers and other taxpayers are hopping over Illinois’ borders with alarming regularity.

…What an embarrassment. What a dereliction of duty… Illinois, boasting the lowest credit rating and the highest population loss of any state in the country, has doubled down. State government is in a full-blown crisis. Again. Since January, Democrats have discussed plans to raise income taxes and borrow money to pay down bills. They approved bills that would make Illinois a less attractive place to do business; under one proposal, Illinois would have the highest minimum wage of all its neighboring states.

This is some very sensible analysis from a newspaper that endorsed Obama in both 2008 and 2012.

Hope for the Future

Even more important, the state’s taxpayers are mostly on the correct side.

Illinoisans feel the strain of the state’s two-year budget impasse, but they are emphatic that tax hikes should not be part of any budget deal. These are the findings of a new poll of likely Illinois voters… Only 31 percent of survey respondents support raising the state income tax to end the budget impasse. An increase in the state sales tax is even more unpopular, with 76 percent of survey respondents opposed. Another key takeaway from the poll: A plurality (49 percent) of respondents who are directly affected by the state budget impasse prefer a cuts-only, no-tax-hike budget.

…Survey respondents were also asked what they think of political candidates who support raising taxes to end the budget impasse. The poll found that likely Illinois voters will be unforgiving of candidates for governor or the General Assembly who raise the state income tax or sales tax.

I suspect taxpayers realize that higher taxes will simply lead to more spending.

Indeed, a leftist in the state inadvertently admitted that the purpose of tax hikes is to enable more spending.

If there is to be any hope for the future in Illinois, Governor Rauner needs to hold firm. So long as Republicans in the state legislature hold firm, he can use his veto power to stop any tax hikes.

Or he can be Charlie Brown.

P.S. Illinois is invariably near the bottom in comparisons of state fiscal policy. The one saving grace is that the state has a flat tax. If the statists ever succeed in replacing that system with a so-called progressive tax, it will just be a matter of time before the state passes New York and California in the real race to the bottom.

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.

VIDEO: Macron invites Americans to flee to France after Trump exits Paris Accord

The only people who are likely to take Macron up on this are Leftists who think all resistance to jihad terror is “Islamophobic.” How happy they will be in France!

  1. France: Guantanamo inmate released by Obama arrested for recruiting for the Islamic State
  2. Ramadan in Paris video: Muslim strikes at neck of man carrying beer
  3. Women fear to venture outside in entire neighborhood of Paris for fear of harassment from Muslim migrants
  4. France: Police hunt Muslim over three shootings, has 14 prior convictions
  5. France: ISIS calls for blood on election day, armed Muslim arrested near base, Macron widens lead
  6. Paris: Knife-wielding Muslim tackled by police at Eurostar terminal
  7. Paris jihad cop killer had been jailed for 20 years for trying to kill police, but freed early
  8. Paris on lockdown as gunmen kill cop in “terrorist act”
  9. France: 14 injured as migrants storm town hall
  10. France: Two Muslims arrested for plotting “imminent and violent” jihad attack
  11. France: Muslim screaming “Allahu akbar” murders Jewish woman, cops cover up terror angle
  12. France: Two teenage Muslimas held for Islamic State jihad massacre plot
  13. France: Veiled Muslim woman threatens passersby with a knife
  14. France: One-third of young Muslims hold “fundamentalist” religious views
  15. Paris airport jihadi had Qur’an, screamed “I’m here to die for Allah, there will be deaths”
  16. Paris jihadi on terror watch list, texted family “I shot police,” cops say terror “possible motive”
  17. Paris: Muslim seizes soldier’s gun after shooting police officer
  18. Paris: Muslim screaming “Allahu akbar” slits throats of father and son, cops search for motive
  19. France: Muslim migrant says of judges: “I’m going to go to court and shoot them all dead with a Kalashnikov”
  20. France: Muslim teen attacked Jewish teacher with machete in the “name of Allah and ISIS”

That’s just back three months. Go, Leftists, go! Take Macron up on his offer! Reduce your carbon footprint! Enjoy the elegance and grandeur of Paris! While it lasts.

French President Emmanuel Macron

“Macron invites Americans to flee to France after Trump chooses to exit Paris agreement,” by Daniel Chaitin, Washington Examiner, June 1, 2017:

French President Emmanuel Macron offered Americans a “second homeland” in France to help “make our planet great again,” a clear jab against President Trump after he announced that his administration will reject the Paris climate agreement.

In a short video posted online Thursday, Macron said that while he respects Trump’s decision, it was a “mistake” for the U.S. to exit the international accord.

“Tonight, I wish to tell the United States: France believes in you. The world believes in you. I know that you are a great nation,” Macron said.

He called on certain types, like scientists and “responsible citizens” who were disappointed by Trump’s announcement, to come to France.

“I call on them. Come and work here with us. To work together on concrete solutions for our kind, our environment. I can assure you France will not give up the fight,” Macron said….

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CLEXIT: Science Wins! Trump stomps on climate religion

‘This is very close to a religious issue. This is a theological issue. People take climate change that seriously.’ ‘We are proud of a president who is staring at the UN and saying we don’t want to give up our sovereignty so that UN bureaucrats can redistribute our wealth and do nothing for the climate. This is a great day for science.’

‘The UN has admitted they will redistribute wealth by climate policy. This is all politics, it is not about saving the planet and Trump is calling them on it.’ We been called a rogue nation along with Syria and Nicaragua. The U.S was founded as a rogue nation. Trump is showing true leadership. Standing up to the world and say we are not buying belief in superstition that a UN agreement that even if you believe in UN assumptions would have no measurable impact on temps in 100 years or has anything to do with saving the planet or climate. Donald Trump should win a medal of scientific courage and political courage for pulling out of this.’

Climate Depot Round Up

It’s Official! The U.S. has done a Clexit! CNN: Trump on Paris accord: ‘We’re getting out’ & BBC: Trump announces US will withdraw from UN Paris Climate deal

Statistician LOMBORG: TRUMP IS RIGHT TO REJECT PARIS CLIMATE DEAL: IT’S LIKELY TO BE A COSTLY FAILURE – Dr. Bjorn Lomborg: The Paris Treaty will be the most expensive global agreement in world history. It is foolhardy and foolish for world leaders to stay fixated on Paris – not only will it likely falter, but it will be hugely costly and do almost nothing to fix climate change. – After hundreds of billions of dollars in annual subsidies, we only get, according to the International Energy Agency, 0.5 per cent of the world’s energy needs from wind, and 0.1 per cent from solar PV.
CNN: Trump on Paris accord: ‘We’re getting out’
Media Clips: 

Watch: Morano in Sky News TV debate with Greenpeace: ‘It’s the greatest thing for the U.S. to leave Paris pact’ – Broadcast June 1, 2017 -Sky News -Marc Morano vs. Sky News Anchor Kay Burley and a Kaisa Kosonen, a spokesperson from Greenpeace International.

Morano: ‘This treaty has no basis not only in science, but in actual cost benefit analysis. Even if you use all the UN assumptions and believe everything they claim about the science, you would not be able to measure the temperature difference in a 100 years assuming all the countries did what thy planned to do…If we did face a climate apocalypse, you don’t need the UN to sit there and decide what energy mix countries should have. UN bureaucrats don’t have to be in charge. You don’t need central planning to determine that.

Sky News Anchor Kay Burley: Trump is really setting himself against almost every other country. is that what we want the leader of the free world to do?

Morano: Absolutely. We been called a rogue nation along with Syria and Nicaragua. The U.S was founded as a rogue nation. Trump wants to be a leader. Trump is showing true leadership. Standing up to the world and say we are not buying belief in superstition that a UN agreement that even if you believe in UN assumptions would have no measurable impact on temps in 100 years or has anything to do with saving the planet or climate. Donald Trump should win a medal of scientific courage and political courage for pulling out of this.

Listen: BBC radio features Morano in two separate shows: ‘We don’t want to give up our sovereignty so that UN bureaucrats do nothing for the climate’ -Climate Depot’s Morano on two BBC radio programs on Trump’s Clexit from UN Paris Treaty. Full audio from both programs below.

Morano: ‘This is very close to a religious issue. This is a theological issue. People take climate change that seriously.’ ‘We are proud of a president who is staring at the UN and saying ‘we don’t want to give up our sovereignty so that UN bureaucrats can redistribute our wealth and do nothing for the climate. This is a great day for science.’ ‘The UN has admitted they will redistribute wealth by climate policy. This is all politics, it is not about saving the planet and Trump is calling them on it.’

Morano on Blaze TV: ‘We are going to have a Clexit! A climate exit!’

Watch: Morano on Newsmax TV: UN Paris Accord Is About Wealth Redistribution, Not Climate – Morano on Newsmax TV’s Steve Malzberg show: “The UN has actually admitted the real reason for the treaty. They said this is not even environmental policy anymore, we will redistribute wealth by climate policy. That’s what they want, a $100 billion a year slush fund going to governments that are best able to keep your people locked in poverty. “This is all about social engineering, central planning, redistribution of wealth, and empowering UN bureaucrats.”

Watch Morano on TV: Trump touched on ‘religious belief’ – It’s a ‘theological debate’ on climate -Tipping Point With Liz Wheeler on OAN (One America News Network) Morano: ‘What Trump did today was a blow to superstition. No longer in Washington DC do we have to pretend that a UN climate treaty can save the planet or actually control temperature or impact storminess. This truly is a day that science has won out in DC and that is a rare day when it comes to climate change.’

Climate Depot’s Marc Morano statement:

“A U.S. Clexit (Climate Exit from UN Paris Pact) is a victory for science. President Trump today, in one swoop, made perhaps the most consequential decision of his presidency both in domestic and international policy by announcing a Clexit of the U.S. from the UN Paris agreement. One of Trump’s core political principles has been an America first policy and knowing the art of a deal. Trump realized that the UN Paris climate pact would not serve the interests of U.S. foreign policy or domestic energy policy. The near total dismantling of former President Obama’s “climate legacy” is now almost complete. Bravo!  President Trump understands that the UN has no interest in climate. The UN’s real goal is “global governance” and “wealth redistribution.” Flashback: UN IPCC Official Edenhofer: ‘We Redistribute World’s Wealth By Climate Policy’

Climate Depot’s Morano predicted Trump’s actions today back in November 2016 while attending the UN climate summit in Morocco. Morano was ejected from the summit for shredding the UN Paris agreement. See: UN Armed Security Shuts Down Skeptics After SHREDDING UN Climate Treaty at Summit Next To Trump Cut-out – November 16, 2016

A UN climate agreement is totally meaningless when it comes to the climate. University of Pennsylvania Geologist Dr. Robert Giegengack  has noted: “None of the strategies that have been offered by the U.S. government or by the EPA or by anybody else has the remotest chance of altering climate if in fact climate is controlled by carbon dioxide.”

Climate Depot Marc Morano adds: In layman’s terms: All of the so-called ‘solutions’ to global warming are purely symbolic when it comes to climate. So, even if we actually faced a climate catastrophe and we had to rely on a UN climate agreement, we would all be doomed!  Make no mistake, climate campaigners who tout UN agreements and EPA regulations as a way to control Earth’s temperature and storminess are guilty of belief in superstition. Today, America rejects superstition and the belief that government regulations and UN agreements can control the climate. 

NASA’s former lead global warming scientist Dr. James Hansen is also not a big fan of the UN Paris accord. See: ‘Fraud, Fake…Worthless Words’: NASA’s James Hansen on UN Paris Pact – Trump should take note – “[The Paris agreement] is a fraud really, a fake. It’s just bullshit for them to say: ‘We’ll have a 2C warming target and then try to do a little better every five years.’ It’s just worthless words. There is no action, just promises. As long as fossil fuels appear to be the cheapest fuels out there, they will be continued to be burned.”
Climate experts who have looked at the UN climate agreement think Trump is correct to dismantle it. Danish statistician Bjorn Lomborg wrote “Trump’s climate plan might not be so bad after all.” Lomborg added that Trump withdrawing from the UN treaty “will will stop the pursuit of an expensive dead end” because even if you accept the climate claims of the UN, the agreement “will matter very little to temperature rise.” (Also see: Bjorn Lomborg: ‘Germany Spends $110 Billion to Delay Global Warming by 37 Hours’)

Statistician: UN climate treaty will cost $100 trillion – To Have No Impact – Postpone warming by less than four years by 2100

Statistician: UN climate treaty will cost $100 trillion – To Have No Impact – Postpone warming by less than four years by 2100Lomborg: “If the U.S. delivers for the whole century on the President Obama’s very ambitious rhetoric, it would postpone global warming by about eight months at the end of the century.”Danish statistician Dr. Bjorn Lomborg, the President of the Copenhagen Consensus Center: “We will spend at least one hundred trillion dollars in order to reduce the temperature by the end of the century by a grand total of three tenths of one degree…the equivalent of postponing warming by less than four years…Again, that is using the UN’s own climate prediction model.” “But here is the biggest problem: These minuscule benefits do not come free — quite the contrary. The cost of the UN Paris climate pact is likely to run 1 to 2 trillion dollars every year.”Lomborg Blasts UN Paris Treaty’s $100 Trillion Price Tag For No Temp Impact: ‘You won’t be able to measure it in 100 years’ – Bjorn Lomborg: The debate about the UN Paris Agreement is “about identity politics. It’s about feeling good… but the climate doesn’t care about how you feel.”
Bjorn Lomborg on UN climate deal: ‘This is likely to be among most expensive treaties in the history of the world’

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Remaining Paris signatories plan to save planet by building 2,440 NEW coal plants. http://climateactiontracker.org/assets/publications/briefing_papers/CAT_Coal_Gap_Briefing_COP21.pdf …

We’re Outta There! President Pulling Out Of Paris Climate Accord

THE 10 DUMBEST REACTIONS TO TRUMP QUITTING THE PARIS CLIMATE ACCORD

1. Apparently of the opinion that Kathy Griffin pretending to behead Trump wasn’t quite distasteful enough, an editorial cartoonist for the Australian Financial Review, David Rowe, likened Trump leaving the Paris agreement to … beheading the entire planet.

9. John Kerry, one of the deal’s leading negotiators, said Trump is not helping the “forgotten Americans” he pledged to elevate, but instead will give their kids asthma (perhaps as soon as this summer!).

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Top Congressional Republicans Applaud Trump’s Decision To Pull Out Of Paris Climate Agreement

Environmentalists Call Trump’s Trashing Of Global Warming Deal A ‘Suicide Note For Earth’

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‘Failure Of Paris Climate Deal Was Inevitable’

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Trump: ‘I was elected to represent the citizens of Pittsburgh, not Paris’

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CNN: Trump on Paris accord: ‘We’re getting out’

BBC: Trump announces US will withdraw from UN Paris Climate deal

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Watch Live: Trump’s announcement of UN Paris Climate Pact

It’s Over! White House Confirms Trump Will Announce U.S. Withdrawal from Paris Climate Accord

DiCaprio to Trump on UN Paris Pact: ‘I hope you’ll make the moral decision’

Fmr. CBS Newsman Dan Rather: ‘History will judge mercilessly Trump’s reported decision to withdraw from Paris’ pact

Update: CNN: Trump expected to withdraw from Paris climate agreement – Will Announce at 3pmThursday

Hillary on Trump Paris pullout: ‘Really stupid… totally incomprehensible… incredibly foolish’

VIDEO: President Trump withdraws from the Paris Accord — Let the Hysteria Begin!

President Trump has kept another campaign promise. On June 1st, 2017 he formally announced that the United States is withdrawing from the Paris Agreement stating, “I was elected to represent Pittsburgh, not Paris!”

In their column 4 Reasons Trump Was Right to Pull Out of the Paris Agreement Nicolas Loris  and Katie Tubb write:

President Donald Trump has fulfilled a key campaign pledge, announcing that the U.S. will withdraw from the Paris climate agreement.

The Paris Agreement, which committed the U.S. to drastically reducing greenhouse gas emissions, was a truly bad deal—bad for American taxpayers, American energy companies, and every single American who depends on affordable, reliable energy.

It was also bad for the countries that remain in the agreement. Here are four reasons Trump was right to withdraw.

1. The Paris Agreement was costly and ineffective.

2. The agreement wasted taxpayer money.

3. Withdrawal is a demonstration of leadership.

4. Withdrawal is good for American energy competitiveness.

Read more…

PowerLine’s  Steven Hayward reporting on the President’s decision wrote:

I know what you’re thinking. How can the climatistas be any more hysterical than they already are? Is it even possible to turn it up past 11? In any case, here are a few early returns, which I’ll update as the day unfolds. (That was a great speech, by the way: “I was elected to represent Pittsburgh, not Paris.”) Hear, hear! For now, this first one is the winner (although the ACLU tweet is a close rival):

Read more…

Watch the full remarks of Vice President Pence, President Trump and the Secretary of the Environmental Protection Agency Pruitt’s comments on withdrawing from the Paris Accord:

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VIDEO: Paris Accord is About Wealth Redistribution, Not Climate

Jason Devaney from NewsMax reports:

The Paris Climate accord’s premise is wealth distribution and it would not even have much of an impact on Earth’s climate, ClimateDepot.com founder Marc Morano said.

During an interview with Newsmax TV’s Steve Malzberg, Morano discussed the climate change agreement that President Donald Trump is reportedly leaning toward withdrawing the U.S. from.

“You wouldn’t even be able to measure the impact using the UN assumptions. This is according to a peer-reviewed paper by a statistician called Dr. Bjorn Lomborg,” Morano said.

“The UN has actually admitted the real reason for the treaty. They said this is not even environmental policy anymore, we will redistribute wealth by climate policy. That’s what they want, a $100 billion a year slush fund going to governments that are best able to keep your people locked in poverty.

Read more…

The G-7’s Outrageous Hypocrisy by John Tamny

An article in Saturday’s Wall Street Journal about the European leg of President Trump’s first foreign trip came with the headline: “Leaders Confront US on Russia, Climate.” In particular, non-US G-7 leaders are all strongly in favor of the 2015 Paris climate agreement that would require participating countries to limit carbon emissions, among other restraints on economic activity.

Trump disagrees, thus the confrontation, owing to his correct belief that the climate deal would prove a barrier to economic growth.That Trump was in opposition to the other G-7 members apparently led to some tense discussion about the US’s desire to exit commitments made during the presidency of Barack Obama. German Chancellor Angela Merkel confirmed that opinions expressed about the withering climate accord “were exchanged very intensively.”

You Obey, We Ignore

Merkel and other G-7 leaders disappointed in the 45th president have no leg to stand on, and certainly aren’t in the position to confront any US president. Trump should make this plain without an ounce of regret. The latter would be true even if the Paris accord were a credible answer to the theory that says economic progress is a major threat to our existence.

Indeed, the Europeans talk a big game about the importance of commitments, and of how the alleged fight to save the earth “has to be a collective effort,” but they’ve shown no remorse about their own persistent failure to honor their NATO spending pledges.

Translated, these nations expect the United States to weaken its economy based on an unproven, but rather expensive theory about the effects of climate change. But when it comes to living up to a longstanding agreement among NATO members to share the costs of a mutual defense shield, they’ll let the US foot the bill.

More interesting here is that in their desperation to keep the US in the Paris fold, Merkel and others are implicitly saying that any agreement made among leading western European countries without the US isn’t worth the paper it’s printed on. With good reason.

So Much for Commitment

Consider non-NATO treaties like Maastricht, in which EU nations agreed to limit their deficit spending so that their debt/GDP ratios would always stay below 60%. Woops. As of 2015, Germany (74.4%), France (89.6%), and Italy (122.3%) were all well above what the G-7 countries committed to when they signed the treaty that led to the euro. As for their commitment to requiring euro member states to individually handle their debts, it too went out the window given the fear among EU members about what debt default would do to certain large banks.

Back to NATO, the European leaders so eager to guilt Trump into a climate commitment not his own have once again shown no commensurate guilt about their own safety being a function of US taxpayers and legislators regularly living up to commitments that they haven’t lived up to.

Mutual Defense

This is particularly galling when we remember that NATO’s mutual defense shield arguably has very little to do with US safety. Lest we forget, the US already has the strongest military in the world, and it’s also quite far from the world’s trouble spots. In short, the US has long stuck to an agreement that weakens it economically, and that has little to nothing to do with its ongoing existence.

Would Americans feel any less secure absent this pricey post-WWII arrangement? At the same time, could NATO survive and would Europeans still feel secure sans American support that gives NATO global relevance?The answer to the previous question explains why the Paris agreement will lose all meaning and relevance if the US backs out. We know this given the historical truth that non-US G-7 nations speak with a forked tongue.

They talk grandly about honoring commitments, but their actions invariably belie their lofty rhetoric. Just as they’ve done with NATO, or with their own inter-European treaties, they want the US to abide the Paris agreement so that they don’t have to.

In that case, President Trump would be very unwise to lend US credibility to an agreement that history says G-7 members will eventually trample on. While the Paris accord surely can’t survive without Trump’s support, neither can his commitment to 3 percent growth survive more government meddling meant to placate shaky G-7 members, all based on a theory. Trump has an easy answer; his rejection of the Paris agreement one that checks the political, economic and rationality boxes.

Trump has an easy answer; his rejection of the Paris agreement one that checks the political, economic and rationality boxes.

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).

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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

Report: Trump tells ‘confidants’ U.S. will leave Paris climate deal

WASHINGTON – Multiple news agencies, including Reuters News, are now reporting that President Donald Trump has privately informed several officials in Washington DC that he intends to withdraw from the UN Paris climate pact.

Climate Depot’s Marc Morano statement: “A U.S. Clexit (Climate Exit from UN Paris Pact) would be a victory for science. Make no mistake, climate campaigners who tout UN agreements and EPA regulations as a way to control Earth’s temperature and storminess are guilty of belief in superstition.” 

Latest developments below.

Via: https://www.axios.com/scoop-trump-tells-confidants-he-plans-to-leave-paris-climate-deal-2424446776.html

Scoop: Trump tells confidants U.S. will quit Paris climate deal

By Jonathan Swan & Amy HarderPresident Trump has privately told multiple people, including EPA Administrator Scott Pruitt, that he plans to leave the Paris agreement on climate change, according to three sources with direct knowledge.

Image result for trump climate paris un

Publicly, Trump’s position is that he has not made up his mind and when we asked the White House about these private comments, Director of Strategic Communications Hope Hicks said, “I think his tweet was clear. He will make a decision this week.”

Why this matters: Pulling out of Paris is the biggest thing Trump could to do unravel Obama’s climate policies. It also sends a stark and combative signal to the rest of the world that working with other nations on climate change isn’t a priority to the Trump administration. And pulling out threatens to unravel the ambition of the entire deal, given how integral former President Obama was in making it come together in the first place.

Caveat: Although Trump made it clear during the campaign and in multiple conversations before his overseas trip that he favored withdrawal, he has been known to abruptly change his mind — and often floats notions to gauge the reaction of friends and aides. On the trip, he spent many hours with Ivanka Trump and Jared Kushner, powerful advisers who back the deal.

Behind-the-scenes: The mood inside the EPA this week has been one of nervous optimism. In a senior staff meeting earlier this week, Pruitt told aides he wanted them to pump the brakes on publicly lobbying for withdrawal from Paris.

Via: http://www.reuters.com/article/us-usa-trump-climate-idUSKBN18O00J

Trump tells ‘confidants’ U.S. will leave Paris climate deal – Axio

U.S. President Donald Trump has told “confidants,” including the head of the Environmental Protection Agency Scott Pruitt, that he plans to leave a landmark international agreement on climate change, Axios news outlet reported on Saturday, citing three sources with direct knowledge.On Saturday, Trump said in a Twitter post he would make a decision on whether to support the Paris climate deal next week.

The White House did not immediately respond to a request for comment.

END REUTERS EXCERPT

Climate Depot Note: A UN climate agreement that is totally meaningless when it comes to the climate. University of Pennsylvania Geologist Dr. Robert Giegengack  has also noted: “None of the strategies that have been offered by the U.S. government or by the EPA or by anybody else has the remotest chance of altering climate if in fact climate is controlled by carbon dioxide.”

Climate Depot Marc Morano adds: “In layman’s terms: All of the so-called ‘solutions’ to global warming are purely symbolic when it comes to climate. So, even if we actually faced a climate catastrophe and we had to rely on a UN climate agreement, we would all be doomed!  A U.S. Clexit (Climate Exit from UN Paris Pact) would be a victory for science. Make no mistake, climate campaigners who tout UN agreements and EPA regulations as a way to control Earth’s temperature and storminess are guilty of belief in superstition,” Morano added.

NASA’s former lead global warming scientist Dr. James Hansen is not a big fan of the UN Paris accord. See: ‘Fraud, Fake…Worthless Words’: NASA’s James Hansen on UN Paris Pact – Trump should take note – “[The Paris agreement] is a fraud really, a fake. It’s just bullshit for them to say: ‘We’ll have a 2C warming target and then try to do a little better every five years.’ It’s just worthless words. There is no action, just promises. As long as fossil fuels appear to be the cheapest fuels out there, they will be continued to be burned.”

Climate experts who have looked at the UN climate agreement think Trump is correct to dismantle it. Danish statistician Bjorn Lomborg wrote “Trump’s climate plan might not be so bad after all.”

Lomborg added that Trump withdrawing from the UN treaty “will will stop the pursuit of an expensive dead end” because even if you accept the climate claims of the UN, the agreement “will matter very little to temperature rise.” (Also see: Bjorn Lomborg: ‘Germany Spends $110 Billion to Delay Global Warming by 37 Hours’)

Statistician: UN climate treaty will cost $100 trillion – To Have No Impact – Postpone warming by less than four years by 2100

Statistician: UN climate treaty will cost $100 trillion – To Have No Impact – Postpone warming by less than four years by 2100

‘If the U.S. delivers for the whole century on the President Obama’s very ambitious rhetoric, it would postpone global warming by about eight months at the end of the century.’Danish statistician Dr. Bjorn Lomborg, the President of the Copenhagen Consensus Center: ‘We will spend at least one hundred trillion dollars in order to reduce the temperature by the end of the century by a grand total of three tenths of one degree…the equivalent of postponing warming by less than four years…Again, that is using the UN’s own climate prediction model.’‘But here is the biggest problem: These minuscule benefits do not come free — quite the contrary. The cost of the UN Paris climate pact is likely to run 1 to 2 trillion dollars every year.’

Lomborg Blasts UN Paris Treaty’s $100 Trillion Price Tag For No Temp Impact: ‘You won’t be able to measure it in 100 years’ – Bjorn Lomborg: The debate about the UN Paris Agreement is “about identity politics. It’s about feeling good… but the climate doesn’t care about how you feel.”

Bjorn Lomborg on UN climate deal: ‘This is likely to be among most expensive treaties in the history of the world’

Climate Skeptics set to cheer Clexit from UN Paris Agreement
Cheers! Trump Refuses To Sign G7 Statement Endorsing UN Paris Climate Agreement

UN Armed Security Shuts Down Skeptics After SHREDDING UN Climate Treaty at Summit Next To Trump Cut-outFull Video of UN Climate Cops Shutting Down SkepticsSkeptics Sought to End Climate Activists Denial Over Trump Rejecting UN Paris Climate Agreement

Life size stand up of Trump taken down — Would UN have objected if life size Obama image were displayed instead?

Associated Press: Climate skeptic shreds Paris Agreement at UN ‘global warming’ conference

Watch Associated Press Video of UN armed security escorting Marc Morano & Craig Rucker from UN climate summit

Climate Depot’s New ‘Talking Points’ Report – A-Z Debunking of Climate ClaimsClimate Depot’s New ‘Talking Points’ Report – A-Z Debunking of Climate Claims

Read Full report Here: http://www.cfact.org/wp-content/uploads/2017/04/Climate-Talking-Points.pdf

The “Talking Points Memo,” by Marc Morano of CFACT’s Climate Depot, is a complete skeptics’ guide for elected officials, media and the public on how to discuss global warming backed up by dozens of citations to peer-reviewed research. “Make no mistake, climate campaigners who tout UN agreements and EPA regulations as a way to control Earth’s temperature and storminess are guilty of belief in superstition,” he added.

Dr. Carson Compassionately Spoke the Truth About Black Poverty

Dr. Ben Carson being under fire for saying “poverty is a state of mind” during an interview is a prime reason why black Americans should end their insane loyalty to Democrats. 

In essence, Dr. Carson compassionately gave his fellow blacks a crucial key to personal success and overcoming poverty. And yet, Democrat and Leftist self-proclaimed advocates for black empowerment rushed to silence him; beating the crap out of him in the media. As a black man, I am so frustrated.

Up until around age 9, I was raised in the Baltimore projects. My mom, dad, four younger siblings and I were so excited moving from our leaky roof ghetto into a brand new 11 story government high-rise.

In a very short time, the new building became a huge ghetto; elevators out-of-order much of the time due to vandalism. The stairwells smelled of urine and were dark due to busted light bulbs, perfect for muggings. After school walking up to our 6B apartment, the sound of me walking on broken wine bottles echoed off the concrete walls. A few residents kept their apartment nice. The majority had no pride in keeping their no-skin-in-the-game free housing nice.

At a very young age, I realized taking the poor out of the ghetto was not enough when their ghetto mindset was alive and well.

Despite free housing, food and health-care, the vibe of the projects was angry and violent. Thank God in 1952, my dad broke the color barrier to become a Baltimore City firefighter. Our family moved out of the projects into a black suburban community in Pumphrey, MD. Sadly, my cousins who lived in fatherless households stayed in the projects, enslaved to government. Government is a poor substitute for real daddies. And yes, I felt my cousin’s daddy envy. Their tragic lives were filled with drug and alcohol abuse, out-of-wedlock births, more poverty and AIDS.

Incredibly, most of my cousins died extremely young; never experiencing the joy of personal achievement or pursuing a dream. Insidiously, government provided just enough to get by and keep them voting for Democrats.

In major cites controlled by Democrats like Chicago, Baltimore and Washington DC, I see the same cycle of government dependency and poverty I witnessed while growing up, but far worse.

Meanwhile, Democrats and Leftists are doing the same thing to Dr Carson that they do to anyone who dares to compassionately offer real solutions to ending black poverty. Democrats and Leftists seek to silence and destroy this extraordinary black role model and advocate of real black empowerment.

Democrats and Leftists despise blacks who have achieved extraordinary success the old fashion way by earning it; businessman extraordinaire Herman Cain, Supreme Court Justice Clarence Thomas, world renowned retired neurosurgeon Dr Ben Carson and former secretary of State Condoleezza Rice to name a few.

These successful blacks expose the Democrats’ and Leftist’s lying narrative that America will always be a hellhole of racism for blacks in which blacks’ only hope is to continuously vote for Democrats to keep evil white racist Republicans and conservatives at bay. The Democrats’ and Leftist’s scheme is extremely destructive and evil.

Please, please, please Dr. Carson, continue telling the truth.