Budget and Finance – Dr. Rich Swier

Energy Conferees Shut Down Fuel Economy Mandates as Costly to Consumers

August 16, 2018/0 Comments/in Budget and Finance, Commentary, Policy, Politics, Science, Social Issues, Waste, Fraud and Abuse /by The Daily Signal

NEW ORLEANS—Sterling Burnett doesn’t always want to sit next to someone he doesn’t know on a train, plane, or bus.

But he’s willing to fight for the freedom of those same strangers when it comes time for them to purchase a motor vehicle.

“What I care about is … your freedom to choose the vehicle of your choice,” Burnett, an environmental policy expert for the Heartland Institute, said during a panel discussion at the free-market think tank’s America First Energy Conference that took a critical look at fuel-efficiency standards for cars and trucks.

“I don’t think government should be in the business of deciding the characteristics of the vehicle you drive,” Burnett said of the so-called Corporate Average Fuel Economy standards. “That’s what CAFE standards do. Automobility is a form of freedom.”

Burnett, a senior fellow on environmental policy at the Heartland Institute, a nonprofit research and education organization based in Illinois, espoused the virtues of automotive freedom:

I take the train, I enjoy the train, and we all fly. And I take buses. But sometimes that’s not my alternative and quite frankly, I don’t always want to sit next to strangers. And maybe I want to listen to a particular kind of music or a news program, and I don’t want plugs in my ears.

When I used to commute to work, I enjoyed my time in the car because it was my time and it wasn’t dominated by work. Cars allow [you] to have the freedom to live outside of inner cities, and to visit distant relatives whenever you want. One hundred years ago, you couldn’t do this.

‘Victory for Consumer Choice’

Congress first enacted Corporate Average Fuel Economy standards in 1975 in response to the Arab oil embargo of 1973 that limited gasoline supplies and drove up prices. The idea was to reduce American dependence on foreign oil.

The latest version of CAFE and emissions standards for light-duty vehicles is called SAFE, an acronym for Safer Affordable Fuel-Efficient Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks.

The Trump administration has proposed a rule change that is a joint initiative of the Environmental Protection Agency and the Department of Transportation’s National Highway Traffic Safety Administration.

The two agencies are seeking public comment on regulatory options, according to a press release, “including a preferred alternative that locks in [model year] 2020 standards through 2026, providing a much-needed time-out from further, costly increases.”

Nick Loris, an economist with The Heritage Foundation who focuses on energy, environmental, and regulatory issues, credits the Trump administration with moving forward with a proposal that he sees as beneficial to consumers.

“Without a doubt, the Trump administration’s recent proposal is a welcome victory for consumer choice, but also for people who are just concerned about the upfront costs of new cars and new trucks,” Loris said during the panel discussion at the Heartland Institute conference.

“It would be nice if Congress demonstrated similar fortitude and recognized that energy use mandates for vehicles, for dishwashers, and [for] clocks on microwaves are all unnecessary and repealed these standards, but I think that’s wishful thinking.”

Challenging California

The Trump administration’s preferred alternative “reflects a balance of safety, economics, technology, fuel conservation, and pollution reduction” and is expected to reduce road fatalities and injuries, the EPA and highway safety agency say in the press release.

The rule change begins a process to create a new, 50-state standard for fuel economy and tailpipe carbon dioxide emissions for cars and light trucks with the model years 2021 through 2026.

The Obama administration permitted California to set its own auto emissions standards under a federal waiver, but the Trump administration could seek to eliminate the waiver as part of the change.

Twelve states concentrated in the Northeast and Pacific Northwest follow California’s lead with stricter emissions standards, as does the District of Columbia.

The Obama administration worked with state officials in California to set fuel efficiency standards, a key component of Barack Obama’s efforts as president to address climate change.

If the Trump administration proposal is implemented, California and the 12 other states would need to observe the new federal rules on emissions.

‘Relics of the Past’

Loris, the Heritage economist, described energy use mandates and CAFE standards as “relics of the past” and byproducts of “politically concocted problems” that put energy consumers at a disadvantage.

Loris said he sees a “systemic problem” in how politicians, pundits, and lobbyists view energy markets.

“The inability of the federal government and regulators to predict what’s going to happen in energy markets” often leads to counterproductive regulatory policies, he said.

For instance, Loris noted, predictions about the price of oil tend to be off the mark.

For a 2008 article, The Wall Street Journal asked “a wide range of economists, energy analysts, and other experts to predict what the price of oil would be at the end of year,” Loris recalled.

Their predictions ranged from a low of $70 per barrel to a high of $167.50. The actual price: $44.60.

Sam Kazman, a panelist who is a lawyer with the Competitive Enterprise Institute, discussed a legal victory he secured on behalf of the Washington-based free-market public policy organization.

A federal appeals court ruled that federal transportation officials illegally concealed how fuel-efficiency standards jeopardized public safety on the highways.

The court found that the National Highway Traffic Safety Administration illegally tried “to paper over” the safety issue through a combination of “fudged analysis,” “statistical legerdemain,” “lame claims,” and “specious arguments.”

Keeping Costs Down

Kazman expressed disappointment that avowed consumer-safety champions such as former presidential candidate Ralph Nader didn’t support the Competitive Enterprise Institute’s position against the fuel-efficiency standards.

But to improve public safety through CAFE standards requires officials to “get rid of a government program, rather than expanding it,” he said.

With the proposed rule change, Trump administration officials say they anticipate consumers will experience reduced costs and improved safety.

“The current standards have been a factor in the rising cost of new automobiles to an average of $35,000 or more—out of reach for many American families,” the EPA’s release says, adding:

Indeed, compared to the preferred alternative in the proposal, keeping in place the standards finalized in 2012 would add $2,340 to the cost of owning a new car, and impose more than $500 billion in societal costs on the U.S. economy over the next 50 years.

Officials also point to a study earlier this year by the highway safety agency that found newer vehicles are safer than older vehicles now on the road, and their wider use would result in fewer fatalities and injuries.

“What the Trump administration has done is stunning,” Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute, said during another panel examining the administration’s progress on energy policy.

“They have kicked California out of setting the CAFE standard,” Ebell said. “They have done everything right, and it is great for consumer choice.”

COLUMN BY

Kevin Mooney

Kevin Mooney is an investigative reporter for The Daily Signal. Send an email to Kevin. Twitter: @KevinMooneyDC.

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EDITORS NOTE: The featured image is of A woman pumping gas at a station in Falls Church, Virginia December 16, 2014. Photo by REUTERS/Kevin Lamarque.

The Earliest Signing of the NDAA in 40 Years Is a Giant Step in Rebuilding the Military

August 14, 2018/0 Comments/in Budget and Finance, National Security, Policy, Taxes /by The Daily Signal

With President Donald Trump’s signature Monday at Fort Drum, New York, the John S. McCain National Defense Authorization Act for fiscal 2019 will be the earliest a defense authorization bill has become law since 1978.

Forty years ago, the bill was 16 pages long and was called the “Department of Defense Appropriation Authorization Act, 1978.” This year’s NDAA is close to 800 pages. The early date is even more impressive considering that the last time that the NDAA was signed into law before the beginning of the fiscal year on Oct. 1 was in 1997.

The early passage of the 2019 NDAA represents a level of stability and predictability uncommon in the recent history of the Department of Defense, and it should be very helpful in the efforts to rebuild our military.

There are two important factors worth noting that contributed to the early timing of the 2019 NDAA: the Bipartisan Budget Act of 2018 and the shadow projected by the absence of Sen. John McCain, chairman of the Senate Armed Services Committee.

The Bipartisan Budget Act has its flaws and represented the capitulation of substantial budgetary controls for 2018 and 2019; nonetheless, it brought a much-needed defense budget increase for both years. The 2019 defense base budget was set at $647 billion, of which a little over $639 billion was under the auspices of the NDAA.

The increased and certain budgetary number removed the biggest point of contention that lawmakers usually have with the NDAA. It enabled both the House and Senate to start working from a common top line and all but eliminated the debates on how to balance defense with other priorities in the budget.

Since late December, McCain has been in Arizona dealing with the effects of the treatment for his brain cancer. In his absence, Sen. James Inhofe, the second-ranking Republican on the committee, has been performing the duties of Armed Services Committee chairman. Still, Inhofe has expressed multiple times that the NDAA and the work of the committee were shaped by McCain.

Naming the NDAA after the absent chairman is a fitting recognition for the senator’s influence and role played in many consecutive bills. It recognizes the importance of his work, not only on the 2019 version of the bill, but in the defense community in general.

Despite all the positive signs that the Fort Drum signing ceremony brings, it is important to highlight that it does not mark the end of the effort to rebuild the military.

It took the military many years to get in a state of deteriorated readiness described by The Heritage Foundation’s Index of U.S. Military Strength. By the same token, it will take time to rebuild it. It is not a two-year effort.

When Secretary of Defense James Mattis was discussing the rebuilding efforts, he mentioned the need for sustained and increased funding at least until 2023 to be able to fully rebuild military capabilities.

The defense budget will require more resources if we are to build out those capabilities to face the threats described by the national defense strategy.

The Budget Control Act caps that limit how much the country can invest in its defense will return in 2020 and 2021. If the country were to observe those caps, it would represent a decrease of $71 billion over the 2019 base budget.

That will require sustained engagement with Congress and the American people to explain and make the case for the defense budget and the military rebuild.

Despite the successes in 2018 and 2019, the American people cannot and should not think that the job is done. It will still take time and resources to rebuild the military that America requires.

COMMENTARY BY

Frederico Bartels

Frederico Bartels is a policy analyst for defense budgeting at The Heritage Foundation’s Davis Institute for National Security and Foreign Policy. Twitter: @FredericoBF.

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EDITORS NOTE: The featured image is of President Donald Trump talking with U.S. Army Maj. Gen. Walter “Walt” Piatt, the commanding general of the Army’s 10th Mountain Division and Fort Drum, as the president observes a demonstration with U.S. Army 10th Mountain Division troops and helicopters at Fort Drum, New York, on Aug. 13. (Photo: Carlos Barria/Reuters/Newscom)

5 of the Worst Economic Predictions in History

August 13, 2018/0 Comments/in Budget and Finance, Economy, Policy, Politics, Waste, Fraud and Abuse /by Foundation for Economic Education (FEE)

Uncertainty makes human beings uncomfortable. Not knowing what’s going to happen in the future creates a sense of unrest in many people. That’s why we sometimes draw on predictions made by leading experts in their respective fields to make decisions in our daily lives. Unfortunately, history has shown that experts aren’t often much better than the average person when it comes to forecasting the future. And economists aren’t an exception. Here are five economic predictions that never came true.

1. Irving Fisher Predicting a Stock Market Boom—Right Before the Crash of 1929

Irving Fisher was one of the great economists of the first half of the 20th century. His contributions to economic science are varied: the relationship between inflation and interest rates, the use of price indexes or the restatement of the quantity theory of money are some of them. Yet he is sometimes remembered by an unfortunate statement he made in the days prior to the Crash of 1929. Fisher said that “stock prices have reached what looks like a permanently high plateau (…) I expect to see the stock market a good deal higher within a few months.” A few days later, the stock market crashed with devastating consequences. After all, even geniuses aren’t exempt from making mistakes.

2. Paul Ehrlich on the Looming “Population Bomb”

In 1968, biologist Paul Ehrlich published a book where he argued that hundreds of millions of people would starve to death in the following decades as a result of overpopulation. He went as far as far as to say that “the battle to feed all of humanity is over (…) nothing can prevent a substantial increase in the world death rate.” Of course, Ehrlich’s predictions never came true. Since the publication of the book, the death rate has moved from 12.44 permille in 1968 to 7.65 permille in 2016, and undernourishment has declined dramatically even though the population has doubled since 1950. Seldom in history has someone been so wrong about the future of humankind.

3. The 1990s Great Depression that Never Happened

Economist Ravi Batra reached the number one on The New York Times Best Seller List in 1987 thanks to his book The Great Depression of 1990. From the title, one can easily infer what was the main thesis of the book, namely: An economic crisis is imminent, and it will be a tough one. Fortunately, his prediction failed to come true. In fact, the 1990s was a period of relative stability and strong economic growth, with the US stock market growing at an 18 percent annualized rate. Not so bad for an economic depression, right?

4. Alan Greenspan on Interest Rates

In September 2007, former Fed Chairman Alan Greenspan released a memoir called The Age of Turbulence: Adventures in a New World. In the book, he claimed that the economy was heading towards two-digit interest rates due to expected inflationary pressures. According to Greenspan, the Fed would be compelled to drastically raise its target interest rate to fulfill the 2 percent inflation mandate. One year later, the Fed Funds rate was at historical lows, reaching the zero-lower bound shortly after.

5. Peter Schiff and the End of the World

Financial commentator Peter Schiff became famous in the aftermath of the 2007-2008 Financial Crisis for having foreseen the housing crash back in 2006 (even a broken clock is right twice a day). Since then, he has been predicting economic catastrophes every other day, with very limited success. There are many examples of failed predictions from which to draw upon. For instance, in a 2010 video (see below), Schiff foretold that Quantitative Easing (the unconventional monetary policy undertaken by the Fed between 2008 and 2014) would result in hyperinflation and the eventual destruction of the Dollar. Unfortunately for Schiff, the average inflation rate per year since the onset of QE has been 1.68%, slightly below the 2% target of the Fed.

Reprinted from Intellectual Takeout.

COLUMN BY

Luis Pablo de la Horra

Luis Pablo De La Horra holds a Bachelor’s in English and a Master’s in Finance. He writes for FEE, the Institute of Economic Affairs and Speakfreely.today.

The Unsung Hero Who Financed the American Revolution, and His Lesson for Today

August 11, 2018/1 Comment/in Budget and Finance, Commentary, Policy, Politics /by The Daily Signal

The name that King George III is said to have called the “most damning name of all” on the Declaration of Independence was not that of Benjamin Franklin, John or Samuel Adams, or even John Hancock. Instead, it was businessman Robert Morris.

As the “financier of the revolution,” Morris deserves to be duly recognized for his role in the American founding.

Morris came from humble beginnings as an orphaned immigrant from England and served as an apprentice for a shipper-banker in Philadelphia. By age 24, Morris had already opened the London Coffee House while also leading a shipping and banking firm of his own. Through these endeavors, he quickly garnered wealth, influential connections, and renown in his community.

Excessive British interference in the corporate affairs of the American Colonies stirred Morris’ desire for liberty. The Stamp Act of 1765 was a particularly egregious infringement for businessmen like Morris, prompting him to assemble his fellow colonists and take to the streets in protest.

By inspiring those around him to defend their freedom, Morris’ efforts held the overreaches of the monarchy in check.

Encouraged by this success, Morris began discovering new methods to utilize his resources and connections to secure liberty. Working his way up through local governmental bodies, he found himself in the Second Continental Congress, for which he managed organizational capital and even began procuring war supplies from Europe in preparation for prospective large-scale conflict with England.

His network of distributors in the commercial shipping industry allowed him to identify and involve supporters—even those back in Europe—who were sympathetic to the budding revolution.

Despite Morris’ desire to rein in governmental overreach, he thought that talk of revolution was premature, and questioned whether the Colonies were yet in a position to govern themselves.

When the time came to vote on independence, Morris surprisingly dissented, because he thought the Colonies were not prepared for self-governance. Yet, witnessing the desire of the people to be set free, he abstained from voting for the sake of having the motion for American independence pass.

In a letter to Gen. Horatio Gates in 1776, Morris revealed that he was willing to set aside his personal thoughts on revolt because of how earnestly his fellow colonists desired it. “I am not one of those politicians that run testy when my own plans are not adopted; for I think it the duty of a good citizen to follow when he cannot lead,” he wrote.

He later gladly signed the Declaration of Independence.

George Washington liked Morris’ character and fundraising abilities so much that he maintained regular communication with him, penning more than 130 letters from 1776 to 1798.

One of Washington’s most pressing requests to Morris came as his army awaited the crossing of the Delaware for the famous Battle of Trenton. In this gloomy hour of the American Revolution, with his troops exhausted and downtrodden, Washington wrote to Morris asking for $10,000 to provide much-needed provisions for his troops.

Morris selflessly answered the call, donating $10,000 of his own funds. This provided the boost Washington needed for a decisive victory in Trenton, one that would inspire more troops to join his ranks.

Later in the revolution, during the Yorktown campaign of 1781, Morris would rise to the challenge again. The fledgling nation was fiscally faltering, so Morris decided to issue $1.4 million in notes backed by his own credit to keep the nation afloat.

As he noted in a letter to Benjamin Harrison, “My personal credit, which thank heaven I have preserved through all the tempests of the war, has been substituted for that which the country has lost … I am now striving to transfer that credit to the public.”

In fact, Morris was so highly respected that he secured many loans on behalf of the government with nothing but his integrity as collateral.

No other man single-handedly contributed more to funding the Revolutionary War. Morris truly lived out the words written in the declaration he signed, pledging his “life, fortune, and sacred honor” for the sake of his country.

His faithfulness in doing so should cement Morris as a hero in the minds of all Americans, but especially conservatives.

Our nation is once again at a crossroads between liberty and tyranny, with the ideals of the Founders challenged by the liberal left.

As Morris asserted in a letter to Col. Joseph Reed, “[I]t is the duty of every individual to act his part in whatever station his country may call him to in times of difficulty, danger, and distress.”

More than ever, we need generous conservatives to take up the mantle of Robert Morris and employ whatever skills and passions they have toward reclaiming America.

COMMENTARY BY

Calvin Blaylock

Calvin Blaylock is a member of the Young Leaders Program at The Heritage Foundation.

Andrew P. McIndoe

Andrew P. McIndoe is director of donor relations at The Heritage Foundation. Twitter: @andrewpmcindoe.

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EDITORS NOTE: The featured image is a painting of Robert Morris standing behind Major John Ross as Betsy Ross sews the first American flag. George Washington sits to the left. (Photo: akg-images/Newscom)

Environmental Activists Ignore The Strong Case For Offshore Oil Drilling

August 8, 2018/0 Comments/in Budget and Finance, Energy, Environment, Policy, Politics, Regulation, Science /by Rod Thomson

By David Mica

While environmental activists continue to push the same weak claims for opposing offshore energy exploration and production despite successful operations elsewhere in the Gulf of Mexico, there are 56,000 reasons why Florida should open its waters to exploration.

That’s the number of high-paying Florida jobs Florida could see by 2035 if it embraces its offshore opportunities. And the benefits don’t stop there. In addition to jobs, additional offshore oil and gas production could positively impact:

National security: Why depend on foreign, often hostile, sources of energy when we have the potential to secure our own resources here at home?

Exports: With abundant domestic energy resources, the U.S. can be the world’s energy leader, creating jobs at home and enhancing security for our allies abroad. Win-win.

Increased Safety: Offshore operations today are safer than ever before. Since 2010, more than 100 standards have been created or strengthened, including for improved safety and environmental management, well design, blowout prevention, and spill response.

Price at the pump: Every barrel of oil we produce domestically adds stability to the global oil supply, putting downward pressure on prices. As the third largest consumer of motor fuels in the U.S., Florida benefits from greater domestic energy production and has the potential to significantly contribute to it as well.

Environmental Protection: Florida has received more than $908 million in federal funding over the past five decades to conserve our precious natural and historic treasures. That funding comes from oil and natural gas revenues. We can safely produce energy and use the revenues for important environmental conservation throughout the state. Another win-win.

Hurricane disruptions: Everyone in Florida knows the potential damage hurricanes can have on daily life and livelihoods. Further diversification of the nationwide energy infrastructure network would help prevent disruptions to gasoline supply after storms.

Energy conservation: Greater use of natural gas for electricity generation has helped drive U.S. carbon emissions to 25-year lows. Florida is on the front lines of this exciting trend, generating more than 60 percent of its electricity from clean, affordable natural gas and demonstrating that energy production and environmental progress are not mutually exclusive.

Florida’s Tourism Economy: Decades of experience in the Gulf of Mexico confirm that energy development can safely coexist with fishing and tourism, as state officials with firsthand experience enthusiastically attest.

The facts support taking advantage of Florida’s offshore energy resources. Florida families and businesses already benefit from offshore energy exploration — from the sidelines. By getting in the game, we can grow our economy and be part of making the nation more energy secure.

ABOUT DAVID MICA

David Mica is the Executive Director of the Florida American Petroleum Institute.

RELATED ARTICLES:

The Benefits of U.S. Offshore Oil and Natural Gas Development in the Eastern Gulf

How Do You Tell If The Earth’s Climate System “Is Warming”?

EDITORS NOTE: This column originally appeared on The Revolutionary Act. The Revolutionary Act has no financial or other affiliation with API.

The Good Intentions Fallacy Is Driving Support for Democratic Socialism

August 7, 2018/0 Comments/in Budget and Finance, Economy, Elections, Featured, Policy, Politics, Waste, Fraud and Abuse /by Foundation for Economic Education (FEE)

“Concentrated power is not rendered harmless by the good intentions of those who create it.” – Milton Friedman

hile Venezuela continues to collapse into a living hell for all but Nicolás Maduro and ruling elites, support in America for democratic socialism continues to rise.

Photo: New York Times.

Graphic reports such as the recent New York Times photo essay about starvation in Venezuela abound:

Kenyerber Aquino Merchán was 17 months old when he starved to death.

His father left before dawn to bring him home from the hospital morgue. He carried Kenyerber’s skeletal frame into the kitchen and handed it to a mortuary worker who makes house calls for Venezuelan families with no money for funerals.

Kenyerber’s spine and rib cage protruded as the embalming chemicals were injected… relatives cut out a pair of cardboard wings from one of the empty white ration boxes that families increasingly depend on amid the food shortages and soaring food prices throttling the nation. They gently placed the tiny wings on top of Kenyerber’s coffin to help his soul reach heaven—a tradition when a baby dies in Venezuela…

[H]is father, Carlos Aquino, a 37-year-old construction worker, began to weep uncontrollably. “How can this be?” he cried, hugging the coffin and speaking softly, as if to comfort his son in death. “Your papá will never see you again.”

If you are inclined to believe this is an isolated incident, reporters Meridith Kohut and Isayen Herrera disabuse you of your ignorance: “Hunger has stalked Venezuela for years. Now, it is killing the nation’s children at an alarming rate, doctors in the country’s public hospitals say.”

With reports like these, one wonders how support for socialism in America can be growing?

If some Americans are economically illiterate and ahistorical that would explain their support. If they have mistakenly identified Scandinavian countries as socialist, that would also offer an explanation.

Perhaps people are seeking more meaning in their lives and being part of a mass movement fills a void.

Some students have admitted to me they value being able to exercise power over others. Perhaps they see socialism as a means to acquire power?

These may be some of the explanations for increasing support for democratic socialism; and yet, there is another factor at work. Americans are increasingly allowing their thinking to be influenced by logical fallacies.

The Good Intentions Fallacy

Charlie Munger is vice chairman of Berkshire Hathaway, the legendary conglomerate he controls with Warren Buffett. In a speech at Harvard University about human misjudgment, Munger tells of a surgeon who removed “bushel baskets full of normal gallbladders” and continued maiming patients for five years past the point he should have been removed.

Munger was curious. Was the doctor motivated by greed? Munger was surprised to learn that the maiming doctor “loved” his patients and was motivated by good intentions. Munger sought insight from a doctor who had been involved in the surgeon’s removal:

I said, “Tell me, did he think, here’s a way for me to exercise my talents,” this guy was very skilled technically, “And make a high living by doing a few maimings and murders every year, along with some frauds?” And he said, “Hell no, Charlie. He thought that the gallbladder was the source of all medical evil, and if you really love your patients, you couldn’t get that organ out rapidly enough.”

For the surgeon’s patients, his good intentions were of little comfort.

When doctors of the ailing George Washington bled him, they were motivated by good intentions; and their unscientific medical practice arguably hastened Washington’s death.

Politicians who trust their seat-of-the-pants good intentions inevitably become authoritarians. They are relying on the limits of their error-prone minds and not on proven principles that promote human flourishing.

Those who rely on their good intentions to guide their actions are arrogant rather than humble. They have little respect or understanding for, as Hayek put it in his essay “Individualism: True or False,” the “spontaneous collaboration of free men [that] often creates things which are greater than their individual minds can ever fully comprehend.”

When Hugo Chavez, the father of Venezuela’s nightmare, passed in 2013, President Carter praised Chavez’s bold leadership saying, “We came to know a man who expressed a vision to bring profound changes to his country to benefit especially those people who had felt neglected and marginalized.”

Carter never doubted Chavez’s good intentions. Indeed, Carter offered those intentions as exculpatory evidence excusing Chavez’s brutality:

Although we have not agreed with all of the methods followed by his government, we have never doubted Hugo Chavez’s commitment to improving the lives of millions of his fellow countrymen.

Professor Owen Williamson of the University of Texas at El Paso might say President Carter had fallen victim to the logical fallacy, The Argument from Motives: “Falsely justifying or excusing evil or vicious actions because of the perpetrator’s apparent purity of motives or lack of malice.”

In his book Capitalism and Freedom, Milton Friedman argued that there were two threats to freedom, external and internal. In 1962, Friedman pointed to the Soviet Union as an external threat. Seeing an internal danger, Friedman argued, is more difficult because it is “far more subtle”:

It is the internal threat coming from men of good intentions and good will who wish to reform us. Impatient with the slowness of persuasion and example to achieve the great social changes they envision, they are anxious to use the power of the state to achieve their ends and confident of their own ability to do so. Yet if they gained the power, they would fail to achieve their immediate aims and, in addition, would produce a collective state from which they would recoil in horror and of which they would be among the first victims.

That “concentrated power is not rendered harmless by the good intentions of those who create it” has become among Friedman’s most famous ideas. His warning is ignored today by those believing the “good intentions” of politicians, such as Bernie Sanders or congressional candidate Alexandria Ocasio-Cortez, will render their destructive policies harmless.

Friedman challenged his readers to consider, “Which if any of the great ‘reforms’ of past decades has achieved its objectives? Have the good intentions of the proponents of these reforms been realized?”

Related to the Good Intentions Fallacy is the Positive Thinking Fallacy. As Professor Williamson puts it, positive thinking is “an immensely popular but deluded modern fallacy of logos, that because we are ‘thinking positively’ that in itself somehow biases external, objective reality in our favor even before we lift a finger to act.”

Let us grant “good intentions” to today’s cadres of democratic socialists. Let us assume they are “thinking positively.” No matter. No good intentions or positive thoughts will overcome how reality works. The destructive outcomes of socialism will follow as history repeats itself.

COLUMN BY

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. To receive Barry’s essays subscribe at Mindset Shifts.

Adam Putnam Lies about the FairTax — Putnam looks more and more like a Charlie Crist republican

July 30, 2018/3 Comments/in Budget and Finance, Economy, Elections, Featured, Policy, Politics, Social Issues, Taxes, Waste, Fraud and Abuse /by Dr. Rich Swier

Adam Putnam launched the below ad titled “23% More” on July 24th, 2018. The ad attacks his Florida gubernatorial opponent Congressman Ron DeSantis for his support of the FairTax.

NewsMax reports in an article titled “New Adam Putnam Ad Hits DeSantis on 23% Sales Tax Plan” that the ad states:

“What would a 23 percent sales tax do to Florida’s economy?” asks the ad now on YouTube, dubbing DeSantis as “D.C. DeSantis.”

“If Congressman DeSantis had his way, everything would cost 23 percent more — groceries, gas, home purchases.”

“Congressman DeSantis sponsored legislation to increase sales taxes by 23 percent, hurting families, destroying jobs, devastating tourism. Washington is full of bad ideas and phony politicians. Ron DeSantis and his huge tax increase fit right in,” the ad continues.

Read more.

The problem is Putnam is lying.

Libertarian radio host Neal Boortz, who co-wrote “The FairTax Book,” responded to Putnam’s ad with a tweet: “If you are having trouble understanding the FairTax, perhaps you ought to comment me. I wrote the book.” He followed up, “The Adam Putnam campaign is LYING THROUGH ITS TEETH … and they know it.”

What Putnam doesn’t tell you is that Floridians will benefit from the FairTax because it will eliminate all federal taxes (income, estate, payroll, gift and business). Florida has no state income tax, which is a reason many people relocate to the Sunshine State. Let’s look at the chart below showing the current income tax brackets and rates to understand why Putnam is lying.

You will notice that individuals making more than $38,000 will actually see a tax decrease. Also note that the FairTax gives those below the federal poverty level (FPL) a quarterly refund of estimated sales taxes paid under the FairTax.

Here is the a table of percentages of the FPL guidelines.

Size of Family Unit	48 Contiguous States and D.C.	Alaska	Hawaii
1	$12,140	$15,180	$13,960

2	16,460	20,580	18,930

3	20,780	25,980	23,900

4	25,100	31,380	28,870

5	29,420	36,780	33,840

6	33,740	42,180	38,810

7	38,060	47,580	43,780

8	42,380	52,980	48,750

For each additional person, add	4,320	5,400	4,970

The FairTax also eliminates all small business and corporate federal taxes. This saves Florida’s individuals, small business and corporations money by neither having to file tax returns nor hiring tax lawyers and accountants. In its annual survey of Tax Return Preparation Fee Averages, the National Society of Accountants reports the following average fees its members charged to prepare 2014 tax returns: 1040 with state return with no itemized deductions: $159. 1040 with Schedule A (itemized deductions) and state return: $273.

Additionally, Congress will lose its power to use taxes to reward and punish individuals and companies. Congress and career politicians will lose their ability to weaponize the IRS.

When your factor in all of these items it appears that the title of “D.C.” belongs to Putnam, not DeSantis. Putnam wants Floridians to continue to pay federal income taxes. Sounds like Putnam is still part of the swamp.

When the FairTax is implemented Florida will truly become an Income Tax Free state.

Trump Administration Takes on Unions Over ‘Skimming’ Medicaid Funds

July 24, 2018/0 Comments/in Budget and Finance, Commentary, Regulation, Taxes, Waste, Fraud and Abuse /by The Daily Signal

Sally Coomer of Seattle, who cares for her disabled adult daughter at home, doesn’t like the fact that union dues are deducted from the Medicaid payment she gets for her services under a Washington state policy.

“The money that is taken out in union dues, if it was not siphoned off, could be used to provide for more care,” Coomer told The Daily Signal about the Medicaid stipend given to home care providers.

“A lot of family members forgo careers to take care of family members and are working in situations where they are really financially struggling,” she said.

Washington is one of 11 states where the state governments work with public-sector unions to automatically deduct a portion of the Medicaid stipend and divert it to unions representing state employee unions.

The other states are California, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, Oregon, and Vermont, according to the State Policy Network, a conservative think tank that focuses on state issues.

Nine states take money from Medicaid home child care workers: Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Washington.

However, the states face pushback from the Trump administration and, potentially, the courts in light of a recent Supreme Court ruling striking down mandatory payments to public employee unions by employees who don’t belong to the union.

The rule proposed by the Centers for Medicare & Medicaid Services would eliminate states’ ability to divert part of Medicaid payments from providers to a third party.

Home caregivers are often relatives or close friends of a family, and they receive the Medicaid stipends for in-home care that varies based on hours required.

Caregivers may pay up to $1,000 per year in union dues, according to the State Policy Network, which says state governments are “dues-skimming” an estimated $200 million per year from home health providers and $50 million from child day care providers to give to unions.

Coomer’s daughter Becky, almost 28, has cerebral palsy and a disorder that causes seizures. She is blind and developmentally disabled.

Coomer, who has become an advocate for other families who don’t want to be forced to pay union dues, said many home care providers are not aware they have a choice in joining a union.

To qualify in Washington state, family members are required to go to an orientation run by the Service Employees International Union, which represents state government employees.

“At the orientation, they would tell people they are required to sign up,” Coomer said. “I don’t know what benefit we get from the dues. The only time I hear from the union is when they inundate me with a political agenda.”

The proposed new Medicaid regulation, announced July 10, is open for public comment.

The Social Security Act generally prohibits states from making payments for Medicaid services to anyone but the provider, according to the Centers for Medicare & Medicaid Services. Exceptions include a court order for wage garnishments or child support.

However, in 2014, under the Obama administration, the CMS revised the regulation to provide for a new exception that primarily includes independent, in-home personal care workers, to allow a state to divert part of the Medicaid payment to third parties such as a union.

Under the Trump administration, the CMS determined that the Obama administration rule is not consistent with the statute. Under the proposed rule, providers still would be free to voluntarily join a union and pay union dues from their own pockets.

“The law provides that Medicaid providers must be paid directly and cannot have part of their payments diverted to third parties outside of a few very specific exceptions,” Tim Hill, acting director for the Center for Medicaid and CHIP Services, said in a public statement. “This proposed rule is intended to ensure that providers receive their complete payment, and any circumstances in which a state does divert part of a provider’s payment must be clearly allowed under the law.”

Organized labor opposes the proposed change.

The Service Employees International Union, or SEIU, framed the proposal as an effort to prevent home care workers from unionizing. It issued a statement from union member Melody Benjamin, an Illinois home care worker.

“Together, home care workers are making these poverty-wage jobs into a respected profession and we will not allow any special interest group or self-interested politicians to silence our voices or endanger the high quality care we provide,” Benjamin said in the statement.

In 2014, the Supreme Court ruled in Harris v. Quinn that in-home care providers cannot be forced to pay union dues to qualify for Medicaid funds. That didn’t prevent states from collecting dues, this time indirectly, before the money reaches the provider.

In states such as Oregon and California, providers have only a 10-day window to opt out of paying the dues, according to the State Policy Network.

The top beneficiaries of the Medicaid deductions across the country are the Service Employees International Union and the American Federation of State, County and Municipal Employees (AFSCME), the largest unions representing public-sector employees, said Max Nelsen, director of labor policy at the Freedom Foundation, a conservative group in Washington state.

“The Supreme Court ruling [in Harris v. Quinn] helped. Previously, home care providers could be classified as state employees,” Nelsen told The Daily Signal. “What they are doing now is short of requirements, but still coercive. Unions just rewrote the membership forms and SEIU playbook after Harris.”

Last month, the Supreme Court ruled in the case of Janus v. AFSCME Council 31 that public employees can’t be compelled to pay union dues or other fees. The high court ordered the U.S. 7th Circuit Court of Appeals to reconsider its 2017 decision rejecting a case brought by in-home care workers seeking to recoup Medicaid dollars.

It’s likely the ruling could have a significant impact on the Medicaid issue, said Thomas Jipping, a senior legal fellow with The Heritage Foundation.

“Janus was an expansive decision,” Jipping told The Daily Signal. “The Supreme Court has already told the U.S. Court of Appeals for the 7th Circuit to reconsider its decision on the issue you raise.”

Mark Janus, an Illinois state worker, and other plaintiffs filed the case in light of the Harris ruling. While the Janus ruling would be helpful, it likely won’t have an immediate direct impact on the Medicaid rule change, Nelsen said.

“Janus had no direct impact on the unionization/dues collection practices for ‘partial-public employee’ home caregivers,” Nelsen said.

“There are some principles outlined in the Janus decision that may ultimately be helpful in reversing some union practices, but nothing that would categorically stop states from collecting union dues from caregivers’ Medicaid payments.”

COLUMN BY

Fred Lucas

Fred Lucas is the White House correspondent for The Daily Signal and co-host of “The Right Side of History” podcast. Send an email to Fred. Twitter: @FredLucasWH.

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EDITORS NOTE: The featured image of union activists and supporters rally against the Supreme Court’s ruling in the Janus v. AFSCME case, in Foley Square in Lower Manhattan, June 27, 2018 in New York City is by Karla Ann Cote/NurPhoto/Sipa USA.

Trump and Senators Offer Plans to Reorganize Bureaucracy, Drain the Swamp

July 17, 2018/1 Comment/in Budget and Finance, Featured, News, Policy, Politics, Taxes, Waste, Fraud and Abuse /by The Daily Signal

President Donald Trump’s administration released a plan June 21 that, if enacted, would impose some order on the sprawling administrative state—something that is long overdue.

Decades of ceaseless expansion of the size and scope of the federal government have created a bloated and inefficient federal bureaucracy, replete with agencies and offices with overlapping functions.

The Rube Goldberg-esque structure of the federal bureaucracy is not only expensive, it thickens the web of government red tape, makes government services less efficient, and makes mission failure more likely by splintering simple jobs among diffuse agencies.

Trump’s plan would begin the long process of rearranging the overgrown federal bureaucracy by grafting together agencies that do similar work and pruning away offices that have outlived their usefulness.

More on the specifics of the reorganization plan can be found here.

However, while the president directs the executive branch, its structure is largely the product of Congress. Through the legislative process, it creates departments and agencies, establishes their responsibilities, and determines their funding.

While Congress sometimes delegates authority to the president to determine how staff and funds are deployed or even how an agency is organized, major shakeups require congressional action.

Details of the Reforming Government Act

That’s where legislation introduced June 27 by Sens. Ron Johnson, R-Wis., and James Lankford, R-Okla., comes in.

Their bill, the Reforming Government Act of 2018, would give the president the power to draw up a broad plan for reorganization—the specifics of which could go far beyond what his administration has already proposed—to be considered under expedited parliamentary procedures in Congress.

If the legislation passes, the president could draft a plan to create, abolish, or move entire departments of the federal government (or sub-units thereof). Agencies that have overlapping functions—for example, the Department of Agriculture’s Food Safety and Inspection Service and the Food and Drug Administration, which also inspects food—could be merged.

Government services spread across dozens of agencies could be consolidated into the most appropriate agency. Financial education programs, for example, are currently operating across 20 agencies, and job training programs are even more diffuse, spread across 40 agencies.

There are literally hundreds of similar examples of overlap, fragmentation, and duplication that a reorganization plan could address.

The only limitations the Johnson-Lankford bill imposes is that the president’s reorganization plan must be “efficiency-enhancing.” That means that any plan would reduce the number of government agencies and save money, while preventing the merging, abolishing, or moving of independent agencies, such as the Federal Trade Commission and Federal Election Commission.

Once the president formulates a reorganization plan, the proposal would go to Congress for fast-track consideration.

Like other bills, the plan would first go through committees in both the House and Senate. But unlike other bills, those committees would only have 75 days to read it and provide their recommendations to the Congress at large. Once the 75 days lapse, the reorganization plan would leave committees for the floor automatically—with or without the committees’ recommendations.

After moving to the floor of Congress, debate would be limited to 10 hours, and then members would cast an up-or-down vote on final passage of the resolution. At no point along the way would amendments be allowed. Essentially, once a president formulates a reorganization plan, Congress has two choices: Take it or leave it.

Why This Is the Right Approach

Johnson and Lankford are wise to want to empower the executive branch to develop a government reorganization plan, instead of asking Congress to take on such a heavy lift.

Incidentally, they are not the first legislators to suggest such an approach—Sens. Joseph Lieberman, I-Conn., and Mark Warner, D-Va., introduced a similar bill in 2012.

The president, along with his or her White House staff and political appointees in the departments are more deeply embedded in, intimately familiar with, and prepared to diagnose the ailments of the administrative state.

Past Congresses recognized the president’s comparative advantage in proposing and carrying out executive reorganizations, and from 1932 to 1984, the U.S. government enacted 93 separate executive reorganization plans. But, in 1984, Congress let this executive reorganization authority lapse.

Aside from expertise, there is another reason it might be better to leave reorganization largely in the hands of the president. Members of Congress—each of whom serves on a number of committees that oversee one or several departments—often have incentives to fight any reorganization plan that lessens their own influence.

While all members of Congress might agree that something must be done to pare back the sprawling federal bureaucracy in principle, each individual member of Congress is likely to adopt a NIMBY—“not in my backyard”—attitude to any concrete proposal that lessens the size and strength of the agencies under his or her committee’s or subcommittee’s jurisdiction.

The Promise of Reorganization

The Johnson-Lankford bill might be a popular way for members of Congress to meet their constituents’ demands to “drain the swamp.”

To be sure, this Congress has already done much to help the president cut back red tape. Using the Congressional Review Act, which allows Congress to strike down new federal regulations, it kept 16 costly Obama-era rules from going into effect. Prior to the 115th Congress, the Congressional Review Act had been used only once.

Reforming the structure of government is at least as pressing as checking its excesses. After all, the tangled, obscure, and almost impenetrable nature of the administrative state is what makes the swamp analogy such a popular description of Washington.

COMMENTARY BY

John York

John W. York, Ph.D., is a policy analyst in the B. Kenneth Simon Center for Principles and Politics at The Heritage Foundation.

Dear Readers:

With the recent conservative victories related to tax cuts, the Supreme Court, and other major issues, it is easy to become complacent.

However, the liberal Left is not backing down. They are rallying supporters to advance their agenda, moving this nation further from the vision of our founding fathers.

If we are to continue to bring this nation back to our founding principles of limited government and fiscal conservatism, we need to come together as a group of likeminded conservatives.

This is the mission of The Heritage Foundation. We want to continue to develop and present conservative solutions to the nation’s toughest problems. And we cannot do this alone.

We are looking for a select few conservatives to become a Heritage Foundation member. With your membership, you’ll qualify for all associated benefits and you’ll help keep our nation great for future generations.

ACTIVATE YOUR MEMBERSHIP TODAY

EDITORS NOTE: The featured image is of Sen. James Lankford, R-Okla. who has introduced legislation with Sen. Ron Johnson, R-Wis., that would give President Donald Trump wide latitude to restructure executive agencies. (Photo: Jeff Malet Photography/Newscom)

When the Giving Tree Stops Giving

July 15, 2018/0 Comments/in Budget and Finance, Featured, National Security, Policy /by Linda Goudsmit

The United States of America emerged from World War II as the world’s undisputed superpower economically and militarily. The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative to aid Western Europe that gave over $13 billion (nearly $110 billion in 2016 US dollars) in economic assistance to help rebuild Western European communities after the end of the war. The Marshall Plan provided political stability for the world and created a world market for American good.

United States Secretary of State George Marshall delivered an explanatory speech to the graduating class of Harvard on June 5, 1947:

“The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down. … Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a result of the desperation of the people concerned, the consequences to the economy of the United States should be apparent to all. It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health to the world, without which there can be no political stability and no assured peace. Our policy is not directed against any country, but against hunger, poverty, desperation and chaos. Any government that is willing to assist in recovery will find full co-operation on the part of the USA. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist.

The Marshall Plan, also called the Foreign Assistance Act of 1948, had the descriptive title of:

“An act to promote world peace and the general welfare, national interest, and foreign policy of the United States through economic, financial, and other measures necessary to the maintenance of conditions abroad in which free institutions may survive and consistent with the maintenance of the strength and stability of the United States.”

It was with the best of intentions and the hopefulness of new parents that the United States looked to the future and assumed the temporary responsibilities of nurturing and protecting that are characteristic of parenthood. What happened?

Shel Silverstein’s 1964 classic The Giving Tree provides the answer. The Giving Tree explores the dynamics of giving and taking through the story of a boy and an apple tree. The tree loves the boy and gives him apples, shade, and a place to play. The boy happily takes what the giving tree gladly gives. As the boy gets older he continues to take without regard to the consequences for the giving tree. He takes her apples, her branches, and her trunk until all that is left of the giving tree is just a stump that the boy sits on.

The Giving Tree is a cautionary tale that illustrates how prolonging childhood “taking” and protracting childhood “giving” of unconditional love are destructive to the giver and to the taker.

The Marshall Plan was in operation for four years but created a paternalistic dependency upon the United States that has continued unabated for 70 years until President Donald Trump finally said, “Enough is enough.

” President Trump is determined to end the prolonged dependency by pressuring the countries of the world to become responsible self-supporting entities.

President Trump’s America first policies are designed to decrease the world’s dependence on America and reduce our unsustainable trade deficit. The United States has become the giving tree and President Trump will not allow her to become a stump. Americans need to understand the economics of dependence. This is how it works.

The North Atlantic Treaty Organization (NATO) founded in 1949 is a military alliance between America and 28 predominately European countries. Only five NATO countries currently pay their required share to protect their own countries – the US, Greece, Poland, Estonia, and the UK – America pays the difference. This means that America is subsidizing European socialist economies because the money not spent on their own NATO obligation is available for them to spend elsewhere. This dependent behavior is compounded by the unfair trade practices of the same nations.

When countries levy tariffs on American goods it raises the prices of those goods. Germany tariffs American cars at 10%, the United States tariffs German cars at 2.5% thus creating an unfavorable and unfair market for American products and an escalating unfavorable trade deficit for the United States. The current trade deficit with the EU is approximately 156 billion dollars.

So, the European dependence upon America is draining our own economy as it props up their socialist economies. As Margaret Thatcher famously said, “The trouble with Socialism is that eventually you run out of other people’s money.” President Donald Trump’s America first economic policies are widely criticized and rejected in Europe because for 70 years the Europeans have had the benefit of prolonged dependence on the USA and President Trump is telling them, “Enough is enough!” it is time for the European Union to become financially independent and stop taking from the giving tree!

The drama that is unfolding internationally is well known to parents of adult children who refuse to launch. In a jaw-dropping May 2018 case in upstate New York, 30 year old son Michael Rotondo refused to leave his parents’ home. These parents refused to become stumps – they sued their son in court to stop him from taking what they no longer wished to give. The judge ruled in the parents favor but the case leaves one acutely aware that something is seriously wrong when a grown son insists upon living like a child in his parents’ home. Michael Rotondo is the real life “boy” in The Giving Tree.

Parents who encourage and/or allow prolonged dependence cripple their children emotionally and endanger themselves economically. Dependence that is protracted and extended past childhood creates an inappropriate attitude of entitlement seen in the boy’s selfish lack of concern for the giving tree. President Donald Trump realizes that prolonged dependence is crippling Europe and has created an attitude of entitlement that will bankrupt America. The world is appalled by Michael Rotondo’s refusal to launch and supports the parents. Why should the world be any less appalled by 70 years of European dependence upon America? Enough is enough.

It is not surprising that adult children who have been allowed to live as dependents far past the appropriate time for such an arrangement will get angry when told to grow up and leave. The insulting blimp of an infant President Trump that flew disrespectfully over London is symptomatic of the psychological defense mechanism projection widely used by the President’s emotionally underdeveloped critics here and abroad. Projection is a tactic of reversal in which Person A accuses Person B for what Person A is actually doing. The London millennials who have refused to launch and who are demanding lifelong government support are angry with the giving tree for saying No. The infant blimp is a reflection of themselves.

Similarly, it is not surprising that our NATO allies are angry that President Trump has told them to pay their required share saying we will no longer subsidize their economies. It may not appear “Presidential” to speak so plainly about what makes Europe intensely uncomfortable, but it is precisely what will save America from bankruptcy. There is no legitimate reason for Angela Merkel to balk at paying Germany’s fair share of its NATO responsibility but Merkel keeps demanding more branches from the American giving tree.

Consider these numbers.

NATO members are required to pay 2% of their Gross Domestic Product (GDP) to NATO for defense. GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period. GDP is a measurement of a nation’s overall economic activity and economic health. The GDP of the United States is over 18.35 trillion dollars with a per capita GDP at $31,190. Germany has a national GDP of 3.4 trillion dollars with a per capita GDP at $34,065. Germany has a higher per capita GDP than the United States yet the US continues to pay a disproportionate 3.58% of its GDP supplying 70% of NATO’s indirect spending and Germany pays 1.22%.

According to the NATO website:

“Today, the volume of the US defence expenditure effectively represents some 67 per cent of the defence spending of the Alliance as a whole in real terms¹. This does not mean that the United States covers 67 per cent of the costs involved in the operational running of NATO as an organisation, including its headquarters in Brussels and its subordinate military commands, but it does mean that there is an over-reliance by the Alliance as a whole on the United States for the provision of essential capabilities, including for instance, in regard to intelligence, surveillance and reconnaissance; air-to-air refueling; ballistic missile defence; and airborne electronic warfare.”

An interesting article written by Marc Thiessan appeared in the Washington Post on 7/12/18 titled “Trump Isn’t Attacking NATO. He Is Strengthening It.” The article states that President Trump’s tough stance will strengthen NATO. Allies must pay their share and invest in real usable military capabilities or NATO will become irrelevant. “An alliance that cannot effectively join the fight when one of its members comes under attack or runs out of munitions in the middle of a military intervention is, by definition, irrelevant. NATO needs some tough love, and Trump is delivering it. Thanks to him, the alliance will be stronger as a result.”

President Trump’s America first foreign and domestic economic and military policies will end the prolonged European dependence on America. His protective policies will free America from their inappropriate dependence that continues to weaken our economy. The renegotiation of the North American Free Trade Agreement (NAFTA) is part of President Trump’s America first effort to establish FAIR trade among nations and further reduce our unsustainable trade deficit.

President Trump is doing what Shel Silverstein’s giving tree should have done. Had the giving tree said No to the boy as he grew into adulthood, the boy would have become a man and the tree would not have become a stump. The countries that have been depleting America’s resources for 70 years have been put on notice. The President’s plain language has exposed the inconvenient truth that what was supposed to be temporary American support has morphed into unsustainable, inappropriate, destructive dependence upon America.

President Trump has told the world No! President Donald Trump will not allow the United States of America to become a stump.

EDITORS NOTE: This column originally appeared in the Goudsmit Pundicity. The featured image is of U.S. President Donald Trump looks on as he holds a news conference after participating in the NATO Summit in Brussels, Belgium July 12, 2018. REUTERS/Reinhard Krause

Seven Social Security Myths

July 7, 2018/0 Comments/in Budget and Finance, Commentary, Policy, Politics, Social Issues, Waste, Fraud and Abuse /by Foundation for Economic Education (FEE)

Social Security policy and politics are treacherous enough even when everyone agrees to respect the facts. If we are to see Social Security through to financial safety, we can no longer afford to indulge these seven myths.

by Charles Blahous

Among public policy issues, Social Security is especially beset by myths and urban legends. These myths inhibit the enactment of legislation necessary to close its substantial financing shortfall. Press, public and policy makers alike would do well to disabuse themselves of the following widely circulated canards.

Myth #1: Social Security is not an entitlement.

This is one of the more baffling myths in circulation of late. One encounters it on social media, on op-ed pages, even from members of Congress. Social Security is not only an entitlement program, it is the largest and most prototypical federal entitlement program. Virtually any credible glossary of federal budget terminology will point to Social Security as the leading example of an entitlement (specifically, an entitlement is a program in which payments are obligated to beneficiaries according to eligibility criteria set in law, without requiring annual legislation to appropriate funds). Those who object to Social Security being referred to as an entitlement are in effect trying to change the definition to mean something other than what it always has. Whether a program is an entitlement has nothing to do with whether beneficiaries made previous contributions to it. In fact, in Social Security’s case, it’s precisely the individual entitlement to benefits arising from those contributions that makes it an entitlement program.

Myth #2: Social Security wouldn’t be in financial trouble if politicians hadn’t stolen and spent its money.

There is actually a small kernel of truth underlying this myth; specifically, Social Security trust fund reserves are by law invested in US Treasury securities, which finance federal government spending. Furthermore, economists who have studied the issue generally conclude that government access to those revenues stimulated more federal spending than would have occurred otherwise. But this phenomenon has nothing do with Social Security’s shortfall. Social Security still owns all that money and earns interest on it. Whenever Social Security tax revenues fall short of its benefit obligations, as they have since 2010, Social Security taps both interest and principal of its trust funds to pay benefits. Social Security’s shortfall exists despite the government’s repaying those funds to Social Security, not because it won’t. The program’s financing problems arise instead from its benefits exceeding the revenue (including interest) that it generates.

Myth #3: Participants have paid for their benefits.

Again, there is a kernel of truth in this myth. Workers covered by Social Security contribute payroll taxes, which establish an entitlement to benefits for themselves and certain dependents. However, this does not mean they have paid for the full amount of their scheduled benefits. Many beneficiaries receive far more in benefits than their own contributions could ever fund, while others receive less. But more importantly, Social Security has a shortfall precisely because in the aggregate, workers have not paid for their benefits: total scheduled benefits well exceed what workers’ tax contributions, plus interest, can finance. So, the existence of benefits has been earned, but the scheduled amounts have not. Benefit schedules would need to be substantially reduced from current law in order to match the benefit amounts workers have actually funded.

Myth #4: Social Security is solvent until the 2030s, so there is still plenty of time to fix it.

One of the most misguided aspects of much press reporting on Social Security finances is the routine citation of its projected insolvency date (2034 in the latest report) as a proxy for its financial condition. How soon Social Security’s trust funds run out, and how soon we must act, are two entirely different things. By the time its trust funds are depleted, annual income and costs will be so far apart that there is no realistic chance of legislation closing the shortfall. For example, even if all new retirees in 2034 were denied benefits, delaying corrective action until then would leave Social Security without enough revenue to continue sending the checks on time to those previously receiving them. When we must act is a function of how long the problem is still soluble, not when the funds finally run out. The window of opportunity for correction is closing now, if it hasn’t closed already.

Myth #5: Because Social Security is self-financing, it doesn’t add to the federal budget deficit.

It is true that Social Security is technically “off budget” and has its own separate tax base and trust fund. But because the trust funds are invested in the federal Treasury, the general government fund plays a substantial role in Social Security financing. In the years before 2010 when Social Security ran a surplus, its operations reduced federal borrowing from the public. Since 2010, as Social Security’s costs have exceeded its tax revenue, the federal government has been running larger deficits to fund the payments it owes to Social Security so that the program can continue to pay full benefits. A personal finance analogy might help. Suppose that during one month, you charge something to your credit card; then in subsequent months, you pay off the credit card debt, plus interest. In a certain sense you simply borrowed money from your bank that first month, then in the following ones you paid it back. But during the months you are paying off that credit card debt, you tangibly experience a new and real financial strain, despite the fact that you were previously on the receiving end of credit. It’s the same with the federal budget. The fact that the federal budget benefited from Social Security surpluses in the past doesn’t make its ongoing deficit-worsening outlays, during the years it pays Social Security back, any less real.

Myth #6: Taxing rich people more by raising the cap on taxable wages will fix the problem.

There’s a statutory cap on each worker’s annual earnings subject to Social Security taxes—$128,400 this year and indexed to grow automatically in most years. Above the cap, workers neither pay additional taxes nor accrue additional benefits, reflecting the program’s design as a floor of income protection rather than an all-encompassing pension benefit. Whenever Social Security’s shortfall is discussed, someone usually suggests raising this cap, to collect more taxes from the rich. That could certainly be done in the context of a solvency plan, but it doesn’t solve much of the problem. Raising the taxable maximum from today’s level all the way to about $350,000 in 2022 would only eliminate about 14% of the structural deficit, in part because a worker’s benefits are linked to his tax contributions and thus the tax increase would generate higher benefits for the well-off. That cost increase could of course be prevented by changing the benefit formula on the high-income end; nevertheless, the point remains that without benefit formula changes, a tax cap increase by itself doesn’t accomplish very much.

Myth #7: Social Security privatization is a live option.

During election seasons there are always some partisans claiming that Social Security is at risk of being “privatized.” That was never true, and the claim is particularly absurd now. Many years ago when Social Security was running surpluses, presidents such as Bill Clinton and George W. Bush suggested that workers be given the option of saving them in personal accounts to shelter that money from being used to finance federal spending (see myth #2). None of those proposals involved privatization, but instead would have allowed for individual saving within a publicly administered system. That opportunity vanished in 2010 when Social Security began running cash deficits. Since then there have been no surplus Social Security contributions to save, and every program tax dollar collected now is immediately sent out the door to pay current benefits. Despite the fact that this has long been a dead issue, occasional “privatization” fear-mongering continues.

The late Senator Daniel Patrick Moynihan was fond of saying, “everyone is entitled to their own opinions, but they are not entitled to their own facts.” Social Security policy and politics are treacherous enough even when everyone agrees to respect the facts. If we are to see Social Security through to financial safety, we can no longer afford to indulge these seven myths.

Reprinted from Economics 21.

Charles Blahous

Charles Blahous is a senior research fellow for the Mercatus Center, a research fellow for the Hoover Institution, a public trustee for Social Security and Medicare, and a contributor to e21.

The United Nations Report on American Poverty Is Just Plain Wrong

July 7, 2018/0 Comments/in Budget and Finance, Economy, Must Read, Policy, Politics /by Foundation for Economic Education (FEE)

The UN insists that the US is mired in poverty, but their report is full of deception and bad data.

by Daniel J. Mitchell

When writing about the statist agenda of international bureaucracies, I generally focus my attention on the International Monetary Fund and the Organization for Economic Cooperation and Development.

Today, let’s give some attention to the United Nations.

Based on this story from the Washington Post, the bureaucrats at the UN have concluded that America is a miserable and awful nation.

…a new United Nations report that examines entrenched poverty in the United States…calls the number of children living in poverty “shockingly high.” …the report, written by U.N. special rapporteur on extreme poverty and human rights Philip Alston, says the United States tops the developed world with the highest rates of youth poverty… The results of the report are not out of line with a number of others…in recent years by different organizations in which the United States has turned up at or near the top on issues such as poverty rates.

But I’ve learned from personal experience (see here and here) that the United Nations is guided by statist ideology, and I should be extremely skeptical of any of its findings.

For instance, when it intervenes in policy (global warming and gun control, for instance, as well as the Internet, the War on Drugs, monetary policy, and taxpayer-financed birth control), the UN inevitably urges more power and control for government.

So, let’s take a jaundiced look at some of the assertions in this new report, starting with that dramatic claim of record child poverty in America.

The United States…has the highest youth poverty rate in the Organization for Economic Cooperation and Development (OECD)… The consequences of neglecting poverty… The United States has one of the highest poverty…levels among the OECD countries… the shockingly high number of children living in poverty in the United States demands urgent attention. …About 20 per cent of children live in relative income poverty, compared to the OECD average of 13 per cent.

So is it true that poverty is very high in the USA and is it also true that America has the highest rate of child poverty among all OECD countries? Even higher than Mexico, Greece, and Turkey? And what is the source of this remarkable assertion?

If you look at footnote #51, you’ll see reference to an OECD publication that contains this supposedly damning chart.

But if you look at the fine print at the bottom, you’ll discover that the chart on child poverty doesn’t actually measure child poverty. Instead, the bureaucrats at the OECD have put together a measure of income distribution and decided that “relative poverty” exists for anyone who has less than 50 percent of the median level of disposable income.

In other words, the United States looks bad only because median income is very high compared to other nations.

Which is the same dishonest data manipulation that the OECD uses when exaggerating America’s overall poverty rate (other groups that have used this deliberately dishonest methodology include the Equal Welfare Association, Germany’s Institute of Labor Economics, and the Obama Administration).

The bottom line is that the key finding of the UN report is based on a bald-faced lie.

By the way, I’m not surprised to see that the UN report also cites the IMF to justify statist policies.

In a 2017 report, the International Monetary Fund (IMF) captured the situation…, stating that the United States economy “is delivering better living standards for only the few”, and that “household incomes are stagnating for a large share of the population, job opportunities are deteriorating, prospects for upward mobility are waning, and economic gains are increasingly accruing to those that are already wealthy” …A much-cited IMF paper concluded that redistribution could be good for growth, stating: “The combined direct and indirect effects of redistribution—including the growth effects of the resulting lower inequality—are on average pro-growth.”

For what it’s worth, the IMF’s research on growth and inequality is embarrassingly bad.

Here’s another big takeaway from the UN report.

The United States…has the highest…infant mortality rates among comparable OECD States. …The infant mortality rate, at 5.8 deaths per 1,000 live births, is almost 50 per cent higher than the OECD average of 3.9.

I’m not an expert on infant mortality. Indeed, I’ve never looked at infant mortality data. But given the UN’s reliance on dodgy and dishonest numbers in other areas, I’m skeptical whether these numbers are true.

And, according to Johan Norberg, the numbers about high levels of infant mortality in the United States are false.

The UN report contains many other ideologically motivated attacks on the United States.

For instance, America is a bad country because taxes supposedly are too low.

The United States has the highest rate of income inequality among Western countries. The $1.5 trillion in tax cuts in December 2017 overwhelmingly benefited the wealthy and worsened inequality. …The tax cuts will fuel a global race to the bottom, thus further reducing the revenues needed by Governments to ensure basic social protection and meet their human rights obligations. …There is a real need for the realization to sink in among the majority of the American population that taxes are not only in their interest, but also perfectly reconcilable with a growth agenda.

While the above passage is remarkable for the level of economic illiteracy, I confess that I chortled with glee when I read the part about how the recent tax reform “will fuel a global race to the bottom.”

As I wrote last year and this year, the fact that other governments will face pressure to reduce tax rates is something to celebrate.

Here’s one final excerpt. The UN report also bashes the United States because we don’t view dependency as a human right.

Successive administrations, including the current one, have determinedly rejected the idea that economic and social rights are full-fledged human rights, despite their clear recognition not only in key treaties that the United States has ratified… But denial does not eliminate responsibility, nor does it negate obligations. International human rights law recognizes a right to education, a right to health care, a right to social protection for those in need and a right to an adequate standard of living.

Needless to say, a problem with this vision of “positive rights” is that it assumes there will always be a supply of chumps willing to work hard so the government can tax away their money to finance all the goodies. But Greece shows us that it’s just a matter of time before that game ends with disaster.

In other words, Thomas Sowell is right and Franklin Roosevelt was wrong.

Let’s close with some good news. As the Washington Post just reported, the UN’s dishonest anti-American screed apparently will prove costly to that bloated bureaucracy.

Alston arrived in Washington last fall on a mission from the U.N. Human Rights Council to document poverty in America. …he was told by a senior State Department official that his findings may influence the United States’ membership in the human rights body. …“I think I was being sent a message.” Two other people at the meeting, speaking on the condition of anonymity, confirmed Alston’s account. …Nikki Haley announced this week that the United States would withdraw from the Human Rights Council.

Good for Ambassador Haley.

Her actions stand in stark contrast to some of her predecessors, who apparently believed in taxpayer-financed self-flagellation.

Alston said he was initially invited by the U.S. government under President Barack Obama to study poverty in America. The invitation was extended again by U.S. officials under then-Secretary of State Rex Tillerson in 2017, he said. “We look forward to welcoming Mr. Alston to the United States for a country visit this December,” Flacelia Celsula, part of the U.S. delegation at the United Nations, said in a meeting of the Human Rights Council on June 8, 2017.

It goes without saying that Mr. Alston should have the freedom to write leftist reports. He also should have the freedom to spread lies in those reports. But I don’t want American tax dollars to finance his ideological bilge.

Which brings us to the obvious takeaway. As seems to be the case with all international bureaucracies, the United Nations wastes money at a prodigious pace. With any luck, Alston’s nonsense will convince American policymakers that deep budget cuts for the UN are long overdue.

Reprinted from International Liberty.

Daniel J. Mitchell

Daniel J. Mitchell is a Washington-based economist 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.

Congressional Republicans Unite Behind Conservative Budget

July 5, 2018/0 Comments/in Budget and Finance, Economy, Must Read, Policy, Politics, Social Issues, Taxes, Waste, Fraud and Abuse /by The Daily Signal

The Republican Study Committee, a conservative caucus of 158 Republicans in the U.S. House of Representatives, releases an annual budget called “A Framework for United Conservatism.”

Its aim is to unite conservatives in Congress behind a long-term fiscal plan.

This year’s Framework builds on the RSC’s fiscal year 2018 budget both of which embody conservative principles, sharing many similarities with Heritage’s Blueprint for Balance; 55 percent of Heritage’s proposals are fully included in the 2018 Framework.

The Heritage Blueprint serves as, in the words of Politico’s Sarah Ferris, “a conservative dream budget” for lawmakers who seek to balance the federal budget and put power back into the hands of the American people.

The 2018 RSC budget also takes significant steps towards curbing federal regulation and unleashing economic growth. Recognizing that the U.S. fiscal challenge cannot be effectively addressed without entitlement reform, RSC’s Framework puts forth recommendations to fix Medicare and Social Security.

RSC’s budget also makes significant progress in areas like agriculture, energy, welfare reform, health care, and retirement security.

Both the RSC’s Framework and Heritage’s Blueprint would eliminate or reform programs run by the U.S. Department of Agriculture.

The policy proposals endorsed by both organizations would help to end cronyism, reduce regulation, and promote competition.

One example is a recommendation to eliminate the federal sugar program, which serves as a hidden tax on consumers by raising sugar prices.

Both the Blueprint and the Framework also recommend eliminating the USDA’s Rural Business Cooperative Service, a program which, among other things, unfairly picks winners and losers in the energy sector.

On welfare reform, the Framework and the Blueprint include three major goals: promote work and marriage, pay for outcomes rather than services, and require transparency in welfare spending and benefits.

Restructuring welfare in such a way does two things. It ensures that those who need assistance receive benefits, and it promotes a culture of self-sufficiency.

The RSC budget also makes substantial progress on Medicaid reform.

One significant proposal supported by the RSC and Heritage experts would put the program on a budget. Four categories of enrollees—children and able-bodied adults, the disabled, low-income Medicare beneficiaries, and long-term beneficiaries—should be financed separately subject to an aggregate federal spending cap. Restructuring Medicaid in this way would increase transparency and accountability while also keeping the program on a stable fiscal path.

Moreover, disaggregation of Medicaid funding would help ensure that the program would be more tailored to the specific needs of each group, protecting especially the most vulnerable from seeing their Medicaid allotment being consumed by the Medicaid expansion population.

The RSC budget also incorporates proposals to fix Social Security and Medicare. Harmonizing the age of eligibility for both of those programs, a recommendation in both the Framework and the Blueprint, is a common sense reform that would be a good step toward slowing the growth of Medicare spending.

RSC similarly includes a recommendation to combine Medicare Parts A and B, which would integrate hospital and physician services while saving billions of dollars.

These recommendations, alongside others found in both the RSC budget and the Blueprint, would allow for more focused funding to those who need assistance the most and help to curb the growth of Medicare spending, a major contributor to the national debt.

In the realm of Social Security, the RSC fully endorses Texas Republican Rep. Sam Johnson’s Social Security Reform Act of 2016, which is designed to permanently save Social Security by targeting benefits to those most in need, among other reforms.

Heritage experts identified the policies in the Johnson plan as a reasonable, targeted, and fiscally responsible approach to begin reforming Social Security.

There are some policies not yet addressed by the RSC that would be helpful in reducing the size and scope of government.

The Framework shies away from serious consideration of three major overhauls of the U.S. Department of Veteran’s Affairs mentioned in the Blueprint: ending enrollment in VA medical care for veterans in priority groups 7 and 8, eliminating concurrent receipt of retirement pay and disability compensation, and narrowing eligibility for veterans disability by excluding disabilities unrelated to military duties.

These proposals would focus scarce dollars on veterans with the most severe disabilities and ensure better service to our veterans.

In the education sphere, the RSC ought to consider rescinding “gainful employment” regulations on for-profit higher education institutions, which would allow more flexibility for nontraditional students who seek to learn in vocational or other types of schools.

The RSC’s budget notably includes a significant number of proposals that, if implemented, would move in the right direction to protect individual liberty, enable economic growth, and lift some of the heavy weight of a bloated federal government off of the backs of American families.

Both chambers of Congress should seize 2018 to begin the critical and overdue process of reducing spending, rightsizing the federal bureaucracy, and realigning federal programs with those functions granted to Congress by the Constitution.

Republicans control the House and Senate –it’s on them to follow the law and pursue a joint budget resolution to trigger reconciliation this year. Heritage’s Blueprint and the RSC’s Framework pave the way.

COMMENTARY BY

Dody Eid

Dody Eid is a member of the Young Leaders Program at The Heritage Foundation.

Romina Boccia

Romina Boccia focuses on federal spending and the national debt as the deputy director of Thomas A. Roe Institute for Economic Policy Studies and the Grover M. Hermann fellow in federal budgetary affairs at The Heritage Foundation. Read her research. Twitter: @RominaBoccia.

Dear Readers:

With the recent conservative victories related to tax cuts, the Supreme Court, and other major issues, it is easy to become complacent.

However, the liberal Left is not backing down. They are rallying supporters to advance their agenda, moving this nation further from the vision of our founding fathers.

If we are to continue to bring this nation back to our founding principles of limited government and fiscal conservatism, we need to come together as a group of likeminded conservatives.

This is the mission of The Heritage Foundation. We want to continue to develop and present conservative solutions to the nation’s toughest problems. And we cannot do this alone.

ACTIVATE YOUR MEMBERSHIP TODAY

EDITORS NOTE: The featured image is by Mega/Newscom.

Trump Budget Embraces Numerous Conservative Reforms

June 26, 2018/0 Comments/in Budget and Finance, Must Read, Policy, Politics, Social Issues, Taxes, Waste, Fraud and Abuse /by The Daily Signal

The Heritage Foundation has released its annual “Blueprint for Balance,” which, if fully adopted, would cut taxes, maintain a strong national defense, and balance the budget in six years.

The blueprint’s proposals are not merely financially responsible; they also limit the federal government to a more proper size and promote individual liberty and a strong civil society. The blueprint would eliminate programs that promote favoritism, diminish entrepreneurial incentives, fall outside the proper scope of the federal government as delineated by the Constitution, and waste taxpayer dollars.

The plan would put power back into the hands of American families and limit growth in government, which should be priorities for any administration that wants to empower people, protect individual liberty, promote economic freedom, and allow its people to prosper.

President Donald Trump’s budget fully or partially includes 53 percent of Heritage’s 142 savings recommendations, which means this administration has taken significant steps toward realizing the promise of limited government.

Some of the main proposals include market-based health care solutions, federal employee compensation reform, economic deregulation, and welfare reform.

One critical blueprint policy recommendation would repeal the Affordable Care Act’s enhanced funding for Medicaid expansion. This would end the inequitable treatment in federal reimbursement which preferences the Medicaid expansion population over other more vulnerable populations such as individuals with disabilities, the elderly, and poor children and parents. This proposal would save $116 billion in the first year.

Food stamp reform is another priority the Trump budget and Heritage plan share. Heritage’s proposal to include work requirements for able-bodied adult food stamp recipients is partially included in the Trump budget. The president’s budget also ends broad-based categorical eligibility for food stamps.

The Heritage and Trump administration proposals, which direct assistance to those most in need and promote self-sufficiency through work, would save taxpayers $11 billion in one year.

Other Heritage proposals included in the Trump budget focus on unleashing the potential of the American economy through deregulation and by promoting competition over corporatism.

For example, both the president’s budget and the “Blueprint for Balance” eliminate the Department of Agriculture Rural Business-Cooperative Service, which operates financial assistance programs for rural businesses instead of letting private competition determine market outcomes. Eliminating similar federal programs would encourage business growth and expand employment opportunities across the American economy.

Heritage and the administration don’t agree on every issue, however. The Trump administration fiscal year 2019 budget rejects 15 percent of the savings proposed in the blueprint.

For example, Heritage education expert Lindsey Burke recommends sunsetting the failed Head Start program to make way for better state, local, and private alternatives. The Trump administration’s budget would slightly increase funding for Head Start.

Many important blueprint recommendations are unaddressed in the president’s budget. Medicare and Social Security, two of the main drivers of the national debt, require substantial reform. The president’s budget takes no action to address these programs.

Heritage calls for transformation of Medicare into a defined contribution program that would expand choice, increase competition, and save $61 billion in a year, but the Trump budget does not mention this. It also fails to include proposals to expand the current threshold for Medicare income-related subsidies, harmonize Medicare’s age of eligibility with Social Security’s age of eligibility, and update Medicare premiums. These three reforms would save approximately $78 billion in one year.

Ensuring Medicare, Medicaid, and Social Security are financially sustainable is critical to keeping taxes low and growing the American economy. Former Trump campaign adviser Corey Lewandowski recently highlighted Heritage’s entitlement reform proposals and called on the president to act. “The solution is for a strong leader to push to reform these programs while restructuring them in a way that still provides a safety net to those in need,” he said.

Nonetheless, the Trump budget for fiscal year 2019 make serious inroads toward beginning to right-size the federal government. The president and Congress must work together to address America’s growing fiscal crisis.

The Heritage “Blueprint for Balance” includes 181 savings and policy rider recommendations to balance the budget, strengthen national defense, protect individual liberty and economic freedom, and strengthen civil society—all without raising taxes. It’s now up to Congress to act.

COMMENTARY BY

Romina Boccia

Dody Eid

Dody Eid is a member of the Young Leaders Program at The Heritage Foundation.

RELATED ARTICLES:

What Congress Can Do to End Suffering at the Border

6 Things to Know About Trump’s Choice to Run the VA

Dear Readers:

With the recent conservative victories related to tax cuts, the Supreme Court, and other major issues, it is easy to become complacent.

However, the liberal Left is not backing down. They are rallying supporters to advance their agenda, moving this nation further from the vision of our founding fathers.

If we are to continue to bring this nation back to our founding principles of limited government and fiscal conservatism, we need to come together as a group of likeminded conservatives.

This is the mission of The Heritage Foundation. We want to continue to develop and present conservative solutions to the nation’s toughest problems. And we cannot do this alone.

ACTIVATE YOUR MEMBERSHIP TODAY

EDITORS NOTE: The featured image of President Donald J. Trump is by Leah Millis/Reuters/Newscom.

Antitrust Matters Matter

June 17, 2018/0 Comments/in Budget and Finance, Courts & Law, Economy, Policy, Politics, Social Issues, Taxes /by Linda Goudsmit

United States antitrust laws regulate the organization and conduct of business corporations on state and national levels to provide fair competition for the benefit of consumers. Why are they necessary?

The Federal Trade Commission (FTC) has the answer.

“Free and open markets are the foundation of a vibrant economy. Aggressive competition among sellers in an open marketplace gives consumers – both individuals and businesses – the benefits of lower prices, higher quality products and services, more choices, and greater innovation. The FTC’s competition mission is to enforce the rules of the competitive marketplace – the antitrust laws. These laws promote vigorous competition and protect consumers from anticompetitive mergers in business practices. The FTC’s Bureau of Competition, working in tandem with the Bureau of Economics, enforces the antitrust laws for the benefit of consumers.”

The Sherman Antitrust Act, passed by Congress in 1890 under President Benjamin Harrison, was the first Federal act that outlawed interstate monopolistic business practices. It is considered a landmark decision because previous laws were limited to intrastate businesses.

In 1890 Utah, Oklahoma, New Mexico, Arizona, Alaska, and Hawaii were not even states. The Transcontinental Railroad that connected the eastern United States with the Pacific coast was in its infancy. That was then, this is now. Today there are 50 states, world travel is commonplace, and antitrust matters matter to every person on Earth.

Why? What do antitrust matters have to do with me? The answer is EVERYTHING.

The protections of antitrust laws focus on the unfairness of business monopolies on consumers. What about the unfairness of political monopolies on citizens? America broke free from the monopolistic centralized power of the British monarchy and won its independence after years of war and death. Why? To create a country based on the principles of individual freedom and liberty.

Every freedom articulated by our Founding Fathers was designed to protect the citizenry by promoting individualism and fairness. The Constitution and Bill of Rights are the greatest antitrust documents ever written providing:

Freedom of religion
Freedom of speech
Freedom of the press
Freedom of assembly
Freedom to petition
Right to keep and bear arms
No quartering of soldiers
Freedom from unreasonable searches and seizures
Right to due process
Right to speedy trial
Freedom from cruel and unusual punishment

The United States Constitution protects citizens from anticompetitive mergers in government practices. The United States of America is the greatest experiment in individual freedom and liberty the world has ever known specifically because of its antitrust antimonopolistic infrastructure. The Constitution defines the checks and balances of power and the individual rights of its citizens.

The current battle for our national sovereignty is an antitrust struggle against global governance. Globalism must not be confused with fair global trade between independent nations. Globalism is the monopolistic anticompetitive political practice of concentrating world power in the hands of a few globalist elite rulers. It is a return to the feudal infrastructure of a paternalistic pyramid with the few elites at the top and the masses of enslaved people at its base.

In 1890 antitrust legislation was necessary to protect consumers from exploitive business practices that focused on goods and services in the interstate marketplace. In 2018 the competition is over the world of ideas. Political systems of national sovereignty supporting individual freedom are battling political systems supporting collectivist globalism.

Globalists are selling planetary governance. They are facilitating the sale by concentrating their power with mergers and acquisitions that limit the information the public is offered. Monopolistic information through censorship and partisan program content on the Internet, television, radio, films, and particularly in academic curricula indoctrinate the unsuspecting public toward collectivism and planetary governance.

Today’s consumers need protection from exploitive political practices to provide fair competition for the benefit of consumers. The American public needs to become aware of how protective antitrust legislation that prevents monopolistic concentration of power affects them. Global governance is a worldwide concentration of power that eliminates individual freedom in the same way global monopolies on goods and services eliminate fair competition. Free and open markets are the foundation of a vibrant economy just like the free and open marketplace of ideas is the foundation of freedom.

The choice that Americans must make is between “free” stuff in a monopolistic collectivist political system of global governance that will enslave them, or freedom in an independent sovereign United States of America. The coordinated effort to delegitimize and overthrow President Donald Trump is the coordinated effort to delegitimize and overthrow our national sovereignty. Antitrust matters matter because monopolistic oppression is never good for the consumer whether they are buying goods, services, or their freedom.

EDITORS NOTE: The featured image is of President Donald Trump arrives for the official welcoming ceremony the G7 Summit in the Charlevoix town of La Malbaie, Quebec, Canada, June 8, 2018. (Christinne Muschi/Reuters) This column originally appeared on the Goudsmit Pundicity.