Tag Archive for: economics

Despite $27 Billion Surplus in June, More Fiscal Reforms Are Needed

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The U.S. Treasury Department announced Friday that the federal government ran a surplus of $27 billion in June, raising hopes that Washington may have turned a corner away from debt-bound demise. The month-in-black marked the first June surplus since 2017, the beginning of President Donald Trump’s first term, and it improved substantially upon the $71 billion deficit the government ran in June 2024. However, while the monthly surplus is a positive sign, the U.S. government is not out of the woods just yet.

Administration officials credited Trump’s tariffs for the budget surplus. “Another promise made. Another promise kept,” tweeted Treasury Secretary Scott Bessent. “As President Trump works hard to take back our nation’s economic sovereignty, today’s Monthly Treasury Statement is demonstrating record customs duties — and with no inflation!” Indeed, the U.S. government collected some $27 billion in customs duties in June, a number strikingly close to the surplus.

Does this result signal that tariffs are the solution to America’s excessive federal debt?

The short answer is no, because the reality of government finances is far more complex.

To explain this, it’s helpful to begin with a definition. As many readers will already know, a surplus occurs when total income (receipts) exceeds total expenses (outlays). Last month, the federal government brought in $526 billion (a $60 billion increase, or 13%) and spent $499 billion (a $38 billion decrease, or 7%).

Right away, these figures make it apparent that the total surplus ($27 billion) was less than the decrease in outlays ($38 billion) and less than half the increase in receipts ($60 billion). Even though tariff income roughly equaled the surplus, it was not the largest factor in June’s budget result.

The decrease in outlays was primarily due to “calendar adjustments,” which happen when payments are made a few days earlier or later than normal, the Treasury Department acknowledged. Since June began on a Sunday, any payments due by June 1 would have been paid on the previous business day, Friday, May 30; these payments would therefore count towards May’s total, instead of June’s. Without these calendar adjustments, June would have registered a $70 billion deficit, the Treasury Department noted. (That’s a remarkably high discrepancy of $97 billion, or roughly 20% of all outlays, but there is also a remarkably high percentage of payments due on the first day of the month.)

The increase in receipts was also due primarily to non-tariff-related factors. While customs duties in June totaled $27 billion, they also brought in $23 billion in May, resulting in an increase of $4 billion. That means most of the $60 billion increase in revenue was raised from other sources, likely quarterly tax payments. “June is one of Treasury’s biggest revenue months of the year,” wrote The Wall Street Journal editors, “because it’s a month when companies and individuals file their quarterly estimated tax payments.”

This raises another essential point, which is that balancing the budget requires responsible spending across all 12 months of the fiscal year, not just a surplus in certain high-revenue months. Before the June surplus of $27 billion, the U.S. federal government ran a deficit of $316 billion in May, with nearly as much income from tariffs. For the current fiscal year, which began in October, the government has run a deficit of $1.34 trillion. In comparison, June’s surplus is little more than a rounding error (technically, $0.027 trillion).

“June was the highest monthly level so far [for customs duties],” the WSJ editors allowed, “but even on an annual basis that’s about $300 billion a year. That’s not nothing, but it won’t balance a $7 trillion spending budget.”

However, the effort to relate tariff revenue to the budget surplus does underscore one obvious point: the path to balancing the budget requires both more taxes and less spending. (Tariffs are a tax on imported goods.) Politicians don’t like to talk about this reality because both items are unpopular, but there’s no way around it, just like a family may be forced to both cut expenses and produce extra income (perhaps through a side hustle) to make ends meet.

Unfortunately, taxes have other ill effects. In economic terms, all taxes reduce efficiency by driving prices way above the supply-demand equilibrium, resulting in lost productivity known as “Dead Weight Loss.” Of course, taxes are necessary to support government, which God instituted as a means of common grace, and Scripture instructs Christians to pay their taxes (Matt 22:15-22; Romans 13:7). Nevertheless, taxes siphon off economic resources, making it beneficial to keep them as low as possible.

Already, the effect of tariffs may be slipping into U.S. inflation statistics. The Consumer Price Index (CPI) increased 0.3% in June, after increasing 0.1% in May, for a 2.7% increase over the past 12 months, reported the Bureau of Labor Statistics (BLS) on Tuesday. Subtracting the volatile categories of food and energy, the “core” CPI increased 0.2% in June and 2.9% over the past 12 months.

While overall inflation numbers were only slightly higher than average, prices increased sharply in categories that are heavily dependent on foreign imports. For instance, apparel prices increased 0.4% in June, while household furnishings and appliances increased a whole 1.0% in a single month. Even pro-Trump Breitbart News attributed these increases to tariff pressures.

(In fairness to the administration, Trump’s tariffs have caused far less inflation than some critics have predicted, as Bessent recently pointed out. However, this is partly due to the fact that the higher tariff rates have yet to take effect for many countries.)

In addition to fueling inflation, tariffs (like all taxes) will also reduce economic activity. Even when taxes are beneficial, such economic downsides are inevitable. Thus, the simplest solution is for the government to avoid spending money it doesn’t have in the first place.

Alas, such warnings have gone unheeded for decades. Given the depth of the fiscal hole the U.S. government has dug for itself, there are no easy ways out — not tariffs, not DOGE cuts, not rescissions. Only hard, deep, and painful cuts — such as serious entitlement reform — can set the nation on the path to fiscal sustainability. And that is unlikely to happen until voters, like they did in Argentina, are willing to listen to real solutions.

AUTHOR

Joshua Arnold

Joshua Arnold is a senior writer at The Washington Stand.

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EDITORS NOTE: This Washington Stand column is republished with permission. ©All rights reserved. ©2025 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

8 Policies to Help Young People Marry and Have Babies

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The number of babies born in the United States falls every year to new lows, imposing costs that experts warn could stretch into “quadrillions of dollars.” Now, analysts from two continents have proposed policies to help families get married and raise children — and help governments reverse the societal impact of the global demographic time bomb.

Governments should analyze how policies impact families, address inflation, lower housing costs, end the marriage penalty, make deadbeat dads support their children, and destigmatize marriage and family, say experts. The recommendations come from two reports, one in the U.S. and the second from an organization comprised of 56 nations stretching from the United States and Europe to central Asia.

“Demographic change is a defining megatrend with far-reaching implications for societies, economies, and governance structures which impact labour markets, pension systems, healthcare services, and social stability,” Gudrun Kugler, a member of Austria’s parliament and author of the transatlantic study, told The Washington Stand. “I am very concerned about the long-term consequences of an aging workforce, population decline, and the increasing burden on healthcare and pension systems, which, if left unaddressed, could undermine social stability, economic growth and even regional security.”

To arrest this trend, Kugler authored an in-depth study largely focused on the cost of depopulation, in her capacity as vice president of the Organization for Security and Co-operation in Europe Parliamentary Assembly (OSCE PA). Meanwhile, the American Enterprise Institute (AEI) produced a detailed series of policy recommendations, edited by Timothy Carney, a columnist at the Washington Examiner and senior fellow at AEI, who was joined by numerous distinguished public intellectuals.

AEI recommended:

1. Require a Family-Formation Review of New Federal Actions. Federal law already requires the government to perform an environmental impact statement analyzing how rules will impact the planet every time it proposes a new rule. The Paperwork Reduction Act tries to address the amount of time each new rule will force business owners to spend in regulatory compliance. Why not treat the American family as well as the delta smelt? “Congress should require federal agencies to examine how their actions affect family formation,” writes Carney. “Does a new regulation create a marriage penalty? Does it make homeownership more difficult? Does it discriminate against larger families?” Good policy begins by minding how government policy impacts the family unit.

2. Remove Roadblocks to Starter Homes. Young families cite the high cost of raising a family, especially the rising cost of housing, as a disincentive to have children. The government should reduce the portion of bloated home costs due to federal regulations.

“The Federal Emergency Management Agency and Environmental Protection Agency develop national model building codes, which states and localities use to draft their regulations. The Clean Water Act and Occupational Safety and Health Administration directly affect builders. The National Association of Home Builders estimates that the cost of regulatory compliance constitutes nearly a quarter of the cost of a single-family home,” noted Carney.

He advised the federal government to measure which regulations most inflate the cost of housing and find ways to “mitigate the added costs.”

President Donald Trump is already curbing the national regulatory burden through his January 31 executive order “Unleashing Prosperity Through Deregulation,” which forces regulators to cut 10 rules from the federal code for every new federal rule, regulation, or guidance.

3 and 4. Reform the Child Tax Credit for inflation and incentivize work. The report contains two recommendations to improve the impact of the Child Tax Credit (CTC).

First, the government should inflation-proof the CTC. President Donald Trump’s 2017 Tax Cuts and Jobs Act doubled the Child Tax Credit to $2,000 beginning in 2018. But rampant inflation under his successor, Joe Biden, reduced the credit’s real value today by $500,” or 25%, wrote Kevin Corinth. “The simple solution is to extend the TCJA while increasing the CTC to $2,500 and indexing it for inflation.”

Second, the CTC should encourage recipients to find gainful employment. The 2021 CTC “made the mistake of offering unconditional cash payments to nonworking families, which can undermine the connections among work, marriage, and family life,” wrote Brad Wilcox. “Congress should pass a CTC that requires a modest income threshold of $20,000 before the full $2,000-per-child credit kicks in.” Wilcox recommends a CTC increase 10-times as large as Corinth’s, writing, “That credit should increase to $5,000 annually for each child under age five and $3,000 for each school-age child under 18.”

5. Use the Child Support Payments to Bring Low-Income Men into the Workforce. Single women find it difficult to raise children if low-income, absentee fathers refuse to pay child support. One in eight (13%) U.S. families lacks a working father: 8% of American homes have no working parents, and mothers support 5% of all families, according to the Bureau of Labor Statistics.

“Congress could adopt a work requirement for low-income men who owe child support payments” before they can receive Temporary Assistance for Needy Families (TANF) — as it currently does for women, wrote Howard Husock. Specifically, the Department of Health and Human Services should withhold federal grants to assist states with child support enforcement unless those states implement work requirements for TANF.

Furthermore, there should be penalties for men who choose to remain deadbeat dads: “[N]oncustodial parents who fail to gain employment or participate in a state employment training program should face imprisonment,” advised Hucock.

6. Reform the Department of Housing and Urban Development’s Rules on Subsidized Housing. HUD policy tends to increase government dependence, particularly for single parents. The average person living in public housing has been there for 10 years, according to HUD statistics. “Two-parent families with children occupy just 3 percent of subsidized housing,” wrote Husock. Congress should impose a five-year time limit for federal housing benefits, similar to that of TANF, which “would incentivize households to increase their earnings and move up and out.”

7. Schools Craft Better Cell Phone Policies. Last December, the outgoing Biden-Harris administration issued a report on cell phone usage in schools, titled “Planning Together: A Playbook for Student Personal Device Policies.” Then-Education Secretary Miguel Cardona suggested states explore how cell phones and other smart devices affect learning. Christopher Scalia suggests Congress pass the Focus on Learning Act, which would mandate a national study on the impact of cellphone use on schoolchildren’s education, behavior, and overall mental health. The bill “would still help states and school districts understand, explain, and implement the best policies to overcome the challenges posed by cell phones in school,” wrote Scalia. “It’s a modest but realistic measure that respects federalism.”

8. Re-enchant marriage, motherhood, and religious faith. In her report, Kugler called for a social and religious reformation supporting marriage, child-rearing, and the religious faith that inspires and sustains family formation.

“A broad cultural transformation is needed to create an environment that supports family formation and its stability over time, child-rearing, and work-life balance,” including efforts to “restore societal prestige” for parents including “family and child-friendly TV content” and “family-friendly curricula in schools.” She asked social leaders to raise awareness about the dangers of delaying pregnancy until later in life, including “higher risks of infertility, complicated pregnancies, and increased rates of miscarriage.” Culture should aim to increase marital stability, “avoid stigmatizing stay-at-home parents,” and “facilitating adoption.”

A faith-filled environment benefits families as well, wrote Kugler. “Religion plays a significant role in family values, and research shows that people with faith adherences tend to have higher birth rates. A balanced approach that respects religious beliefs and supports family life can help create a more inclusive society. Governments must recognize the positive impact that religious institutions can have on family stability and uphold freedom of religion,” wrote Kugler.

Everyone agrees the costs of inaction are high. Unless Americans reverse the nation’s low birthrate, “the U.S. will face an existential economic crisis” which “could have an impact measured in the quadrillions of dollars,” wrote Jesús Fernández-Villaverde in The American Enterprise, AEI’s monthly publication.

“Aging populations, declining birth rates, and increasing unplanned childlessness, lead to a concerning worker-retiree dependency ratio that necessitate[s] urgent and coordinated political action. It is therefore crucial, to adopt policies that support families, parents, and having children, and to promote intergenerational solidarity,” Kugler told TWS. “At the same time, we will have to intensify urban and rural development policies that ensure adequate infrastructure and services while undergoing demographic changes.”

The West’s way of life cannot continue “without major adjustments,” her report concluded.

AUTHOR

Ben Johnson

Ben Johnson is senior reporter and editor at The Washington Stand.

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2025 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

Having Fewer Babies Will Cost U.S. Economy ‘Quadrillions of Dollars’: Study

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The West’s growing epidemic of childlessness and depopulation will “fundamentally alter our societies” and impose “an existential economic crisis” on the United States that will cost the U.S. alone “quadrillions of dollars,” according to two new reports.

Despite decades of warnings about overpopulation, the United States and Europe have long had fertility rates below the replacement level of 2.1 children per family. The global population bust will lead to nations with lower GDP, higher welfare spending, fewer workers, less economic power — and, possibly, a shift away from a global order led by the once-Christian West to one overwhelmed by a growing Muslim population.

“If we are unable to address our fertility crisis, the U.S. will face an existential economic crisis driven by a steep decline in fertility rates — one that could have an impact measured in the quadrillions of dollars,” wrote Jesús Fernández-Villaverde in The American Enterprise, the monthly publication of the American Enterprise Institute (AEI). “[Y]es, tackling fertility has an impact measured in discounted terms of quadrillions of dollars, not just small change like a miserly trillion dollars here or there.”

“Seems bad,” quipped Brad Wilcox, professor of sociology at the University of Virginia and a fellow at the Institute for Family Studies (IFS).

If anything, the economic concerns minimize the full extent of the social revolution soon to be ushered in through low fertility, say experts in Europe.

The world’s impending underpopulation “should be treated as a primary political issue: We will be witnessing the reshaping of our region’s social, economic, and political landscape, impacting social structure, infrastructure, labour force, retirement, old age and health, state finances, and security — almost every aspect of life. It will break the system,” wrote Gudrun Kugler of Austria.

Global Population Bust

No one questions the fact that nearly every corner of the globe is producing fewer babies. Global fertility has plunged from five children per woman in 1950 to around 2.25 children per woman in 2023, according to the United Nations Development Programme (UNDP)’s “World Population Prospects” report. “Globally, the total fertility rate is likely already below replacement — that is, below the level needed to sustain the population in the long run, approximately 2.18 children per woman. In the U.S., it’s around 1.6,” wrote Fernández-Villaverde.

The birthrate in every society on nearly every continent is below replacement level, except sub-Saharan Africa and Central Asia, noted Kugler — who is vice president of the Organization for Security and Co-operation in Europe Parliamentary Assembly (OSCE PA).

Of OSCE region’s 56 member nations, only the primarily Muslim nations of Uzbekistan, Tajikistan, Kazakhstan, Kyrgyzstan, and Turkmenistan currently have replacement-level birthrates. Roman Catholic Malta had the lowest birthrate at 1.08. “Even in India birth rates have fallen below replacement levels: Only five out of thirty-six states are now above replacement level,” noted the OSCE report. After decades of a brutally enforced one-child policy, “China could lose as many as 600 million inhabitants by the end of the century,” added Fernández-Villaverde.

“This trend is evident in both wealthy and poor nations, in religious and secular states, in countries with right-wing governments, as well as those with left-wing governments, and in nations with free abortion access and those with restrictive abortion laws,” wrote Fernández-Villaverde.

However, abortion impacts the global fertility replacement level in one way: “[T]he global replacement rate of 2.18 is slightly higher than that of the U.S. due to selective abortion of girls in Asia and higher female mortality in Africa.”

To make matters worse, the full extent of the problem is hidden by a phenomenon known as “population momentum”: Women in the Millennial and Gen Z cohorts continue to have babies while their parents are alive, coasting on previous fertility rates. “All of today’s global population growth is solely a result of this momentum,” stated the AEI report.

The largest driver of the West’s demographic decline is unplanned childlessness. While those who become parents have roughly the same amount of children as usual, the rates of those who never have children has increased as much as 10-fold in Italy. Most were not childless by choice: Only 32% of childless Europeans did not want children, compared with 38% who desired children but never had them, noted Kugler in her report, “Demographic Change in the OSCE Region: Analysis, Impact and Possible Solutions of a Mega Trend Reshaping Society.”

These changes will have a profound impact on the entire world.

Economic Catastrophe

With fewer children, the U.S. economic engine will soon run out of fuel. It’s simple math: “Since the Civil War, the long-term average growth rate of output per worker in the U.S. has been approximately 1.9% annually,” according to Fernández-Villaverde. Economic growth is the output per worker plus the size of the labor pool. With fewer children, American GDP will grow at a slower rate, and “in downturns, the economy will contract, not just grow more slowly.”

The population advantage can be measured by comparing the U.S. to one of the nations at the forefront of demographic decline: Japan. From 1991 to 2019, the U.S. averaged 2.53% average economic growth, while the Japanese economy grew by only 0.83%. For all but seven of those years, the Japanese worker’s productivity exceeded that of his American counterpart. The difference? The U.S. labor force increased by 0.91% annually, while the Japanese population contracted by 0.54% a year.

“Once we begin to contemplate the fiscal implications of a declining population, it becomes difficult to focus on anything else,” concluded Fernández-Villaverde.

Dire Consequences

The consequences of the West’s birthrate falling below replacement level will be profound, according to the studies. Fewer workers will create labor shortages, leading to lower innovation, a sluggish economy, and rising dependency. A less productive society will decimate the tax base, lowering the amount of revenue the government collects and, in the process, straining pension systems and welfare programs.

This is particularly true of government transfer payments such as Social Security, Medicare, and Medicaid. In Austria, by 2042, “there will be only two working people for every pensioner, compared to today’s ratio of three to one,” noted Kugler.

An aging population exponentially increases a society’s health care costs. In Austria, those over the age of 60 make twice as many doctor visits as those under that age. “In Spain, in 2011, 80% of all pharmaceutical expenses were made by people aged 65 or more, who were 17% of the population then,” Kugler wrote.

Fewer babies being born also transforms societies in more profound ways beyond those that can be measured on a spreadsheet. One is growing social isolation and hopelessness. In 2023, then-U.S. Surgeon General Vivek Murthy issued the first-ever report on America’s “epidemic of loneliness.” In the U.K., 7.1% of the population — or 3.83 million Britons — report experiencing “chronic loneliness.” Smaller families and a shrinking social circle, worsened by decreasing church attendance, breed depression.

Depopulation hits rural areas the hardest. A smaller national population increases urbanization, even as most Americans say they would rather live in a small town or rural area. Those in rural areas may see vital resources such as hospitals and grocery stores close.

A smaller population also has the potential to alter the global balance of power. Fewer people also impact the government’s ability to pay the national debt and maintain an adequate armed force deterrent. Overall noted Kugler, a smaller population in the West “could lead to a shift in geopolitical dynamics, as Europe’s demographic decline may reduce its strategic importance in global affairs.”

Increased Immigration Cannot Solve the Problem

The U.S. population has only grown due to immigration, which brings its own challenges to social cohesion. Yet increasing immigration levels cannot even solve the economic problems posed by a shrinking populace, because, wrote Fernández-Villaverde, most legal immigrants are a net economic drain. “[O]nly at the top 10th percentiles are [immigrants] net contributors” to the economy. “In other words, all immigrants that come to the US are below the 90th percentile and won’t help solve the fiscal woes created by low fertility.”

Furthermore, the children of immigrants pose similar issues. “European countries that have the detailed databases required to compute these numbers carefully have found that not even the second-generation (i.e., the sons of immigrants born in the country) is a net contributor to the welfare state,” he noted.

Perhaps with this in mind, President Donald Trump has proposed creating a $5 million “Gold Card” visa, granting those who purchase it legal residency and a path to U.S. citizenship.

All told, wrote Kugler, the West’s way of life cannot continue “without major adjustments.”

AUTHOR

Ben Johnson

Ben Johnson is senior reporter and editor at The Washington Stand.

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2025 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

Harris Campaign Leader Admits VP Plans to ‘Keep a Lot’ of Biden’s Economic Policies

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According to the co-chairman of the Harris-Walz campaign, incumbent Vice President Kamala Harris has a plan to fix the American economy — and that plan is almost identical to what she and President Joe Biden are already doing with their White House tenure. Senator Chris Coons (D-Del.), one of the chairmen of Harris’s presidential campaign, addressed Americans’ financial worries in an interview on Tuesday, claiming that Harris has a plan to “open up the door to economic opportunity.”

CNBC’s Andrew Ross Sorkin asked Coons, “Do you think that the American public … deserve to know specific details about her economic plan?” In other words, “Should you know what your tax rate is going to be or at least what she believes your tax rate should be before you go to the polls? Should you know what the regulatory sort of regime in her perfected world would look like?”

Coons replied that Harris has “laid out a broad vision for what are her priorities” in terms of the economy. After suggesting that Americans “look at the chaos, the unpredictability, the sort of careening around the field of the former president,” the Delaware Democrat did admit that Harris intends “to keep a lot of the same policies and agendas” put in place by the Biden-Harris administration.

But those same economic policies and agendas have proven wildly unpopular. For years now, Americans have been worrying about skyrocketing inflation and sharply-increasing housing prices while going into debt just to fund day-to-day necessities like school supplies for children. Noting these concerns, CNBC’s Joe Kernen said, “Americans still don’t feel like it’s a great economy and they prefer Trump — maybe it’s narrowing a little, but they prefer Trump and the way he managed the economy more than the current administration.”

Coons responded, “Part of it is that Americans — when you ask the question, ‘Are you better off today than you were four years ago?’ — many Americans misremember just how bad the economy was four years ago and how strong our economic recovery from the pandemic has been.”

But Americans do remember being able to afford gas and groceries. Immediately following the presidential debate earlier this month between Harris and her rival, former President Donald Trump, undecided and Independent voters overwhelmingly aligned with Trump, largely citing the strength of the U.S. economy under his administration. One voter told The New York Times, “When Trump was in office — not going to lie — I was living way better. I’ve never been so down as in the past four years. It’s been so hard for me.”

In fact, according to voter analysis from Fox News, even Democrats preferred Trump’s vision and plan for the economy, jobs, and inflation over Harris’s. A CNN poll found that Trump maintains a 20-point lead over Harris on economic issues, which have been consistently ranked the most pressing concern for voters ahead of November. He also holds a 23-point lead over Harris on immigration, which voters rank as a close second for crucial issues.

A number of voters also expressed dissatisfaction with Harris’s failure to clarify her plan for the economy. Many said that the vice president was too vague and offered few details. Those complaints have persisted in the succeeding weeks, as Harris has failed to offer specifics in interviews. Even when asked point blank, Harris has opted to reminisce about her “middle class” childhood rather than detail her vision for the economy.

Coons was confronted on this point on Tuesday. Sorkin said that he could only name five specific policies Harris has mentioned over the past months and noted that most voters would prefer to hear of 10 or 15 proposals. Coons grinned and, instead of offering answers, simply asked, “And what do you know about Donald Trump’s tax and regulatory agenda?”

AUTHOR

S.A. McCarthy

S.A. McCarthy serves as a news writer at The Washington Stand.

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EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2024 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

‘Kamala Harris Is Running a Giveaway Campaign’: Economist

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As presidential hopefuls Donald Trump and Kamala Harris approach their first debate on Tuesday, their campaigns have unveiled economic policies that seem in some ways diametrically opposed — and only one could stimulate “robust economic growth,” a leading economist has warned.

Harris has proposed imposing price controls on food, undoing the Trump tax cuts of 2017 by raising the top tax rate to 39.6%, hiking corporate taxes and capital gains taxes to 28%, giving first-time homebuyers $25,000, and doubling down on Obamacare by raising taxpayer-funded subsidies for those who buy their plans from the exchange.

She also proposed one tax cut to benefit small businesses. “I want to see 25 million new small business applications by the end of my first term,” said Harris last week. “So, part of my plan is we will expand the tax deduction for startups to $50,000.”

In a speech at the Economic Club of New York last Thursday, former President Trump proposed unleashing the power of the free market by maintaining the 2017 tax cuts and further slashing the corporate tax from 21% to 15%, cutting red tape, protecting U.S. manufacturing by raising tariffs on imported goods, clawing back all unspent funds from the Biden-Harris administration’s Inflation Reduction Act, and making more jobs available to U.S. citizens by deporting illegal immigrants who lower wages and compete for jobs.

Both candidates agree on ending federal taxation on tips, a policy first proposed this presidential race by Trump and parroted by Harris.

“Kamala Harris is running a giveaway campaign,” Paul Mueller, a senior research fellow at the American Institute for Economic Research (AIER) told “Washington Watch” guest host Joseph Backholm last Thursday. “Of course, the Biden administration has been trying to cancel various forms of student debt for years now. And her approach, I think, to stimulating the economy is more of what we’ve seen over the past four years, which is extensive government involvement, huge amounts of spending. It’s not really an organic growth within the economy.”

Artificial stimulus raises prices, a major problem over the course of the Biden-Harris administration. “When you subsidize people’s ability to buy things — whether that’s higher education or health care — and we give people money in the form of loans or grants or scholarships to do that, what it does is boosts demand. And so what we see over time in both of those areas is rising costs. The cost of higher education has grown much faster than everything else in the economy. The rate of increase for health care has increased very rapidly,” Mueller stated. “And so this $25,000 credit for first-time home buyers, while it sounds nice, it’s actually going to continue to put upward pressure on the price of housing overall.”

The entire amount of the subsidy is “actually going to be eaten up by rising prices,” Mueller noted.

Even a putatively pro-business tax policy like a small business tax credit could backfire. “There are a lot of small business owners who maybe will close down their existing business and start a new one just to get the tax credit,” Mueller warned.

On the other hand, “President Trump’s agenda” has the potential to spur “robust economic growth” in an organic way, said Mueller. “He has talked about wanting to roll back regulations.”

Mueller noted he opposed Trump’s tariff policy, “and, then, he hasn’t really addressed runaway government spending. And the more money that is spent by the federal government, the less money there is for people in the private sector to spend on their businesses, their houses, their projects.”

Backholm suggested the greatest vacuum in economic dialogue involves America’s $35 trillion national debt. “So far, we are not seeing a lot of politicians raise their hand and say, ‘I’m the guy that’s going to give you less so we can save the future.’ I think that might be what we need. We’re not getting that from anybody at this point.”

AUTHOR

Ben Johnson

Ben Johnson is senior reporter and editor at The Washington Stand.

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EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2024 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

‘My Grammar’s Not Always Correct’: Fact-Checking Harris and Walz’s CNN Interview

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A full 39 days after being anointed the Democratic Party’s presumptive leader, Democratic presidential nominee Kamala Harris sat down for her first in-depth interview. As CNN’s Dana Bash rattled off numerous flip-flops and apparent lies, Harris said her “values have not changed,” that she is “very proud” of her record on inflation and illegal immigration, and that she has no regrets over describing Joe Biden’s mental health as “strong” in late June. Meanwhile, vice presidential candidate Tim Walz blamed his misstatements about serving “in war” on poor grammar and before pivoting to an alleged “national abortion ban.”

Unlike most presidential candidates, who are elected in primaries and vetted by voters, Kamala Harris — who received the nomination through a virtual roll call 27 days ago — has yet to hold an extended in-person interview. To date, she has not held an in-depth interview or press conference on her own, opting to have Walz at her side throughout the process.

Word Salad

The interview got off to a rocky start. When asked what she would do on day one, Harris replied she would “do what we can to support and strengthen the middle class,” to “look at the aspirations, the goals, the ambitions of the American people,” and provide “a new way forward” filled with “hope and optimism.”

“So, what would you do day one?” Bash repeated.

Twice, Harris said she represents “a new way forward” from polarization “dividing our nation,” because “the last decade … I believe has been contrary to where the spirit of our country really lies.” Bash pointed out Harris has served as vice president for 40% of the last decade.

In a question about her apparently evolving views on fracking and climate change (see below), Harris said: “I believe it is very important that we take seriously what we must do to guard against what is a clear crisis in terms of the climate. And to do that, we can do what we have accomplished thus far.”

Harris also received mockery for saying, since “the climate crisis is real, that it is an urgent matter,” the U.S. government “should apply metrics that include holding ourselves to deadlines around time.”

Perhaps the most memorable comments of the interview came, not from Harris, but from Walz, when he tried to explain allegations of stolen valor.

Walz Blames ‘Stolen Valor’ Claim on Poor Grammar

Tim Walz has stated he carried “weapons of war … in war,” allowed others to say he served in active combat zones during the War on Terror without correction, and claimed for two decades to have retired from the National Guard at a higher rank than he earned. Critics accuse him of stolen valor, which is viewed as perhaps the most shameful activity among veterans. The Harris-Walz campaign claimed the Minnesota governor “misspoke” in his remarks.

In his CNN interview, Walz blamed poor English skills.

“You said that you were in war,” pressed Bash. “Did you misspeak, as the campaign has said?”

“Yeah,” replied Walz. “My wife the English teacher told me my grammar’s not always correct.”

Walz taught English during a stint in the People’s Republic of China, leading to a long series of trips to the communist nation.

Walz’s explanation was “hilarious,” said former collegiate athlete Riley Gaines, scoffing at the notion that falsely “claiming you fought in war is just a silly grammar mistake.”

“I certainly own my mistakes when I make them,” claimed Walz, moments after replying he made counter-factual statements, because “I speak like” the American people.

Bash also asked about Walz’s erroneous remarks that he conceived through IVF. Walz replied his comments cut “quite a contrast [against] folks that are trying to take those rights away from us.” Ultimately, Walz refused to offer any remorse for his statements, saying, “I won’t apologize for speaking passionately, whether it’s guns in schools or protection of reproductive rights.”

Walz then pivoted to a hypothetical “abortion ban.” Most Americans, he said, are not splitting “hairs on IVF or IUI. I think what they’re cutting hairs on is an abortion ban and the ability to be able to deny families the chance to have a beautiful child.”

Donald Trump — who has repeatedly announced he opposes any abortion ban at the federal level during his second term — earlier in the day announced during a rally in Potterville, Michigan, that “under the Trump administration, your government will pay for, or your insurance company will be mandated to pay for, all costs associated with IVF treatment, fertilization for women.” During an unscripted interview, he also implied he would vote for Florida’s Amendment 4 to institute an on-demand abortion regime in Florida before his campaign released a statement walking his remarks back.

‘My Values Have Not Changed’ about Fracking, et. al.

Faced with a series reversals and flip-flops from her previous policy proposals, Harris repeated a variation of the phrase “My values have not changed” three times.

“Let’s be clear. My values have not changed” on “the Green New Deal,” which she supported as a 2020 presidential candidate and co-sponsored as a U.S. senator. “I have always believed and I have worked on it, that the climate crisis is real,” she said. She repeated the phrase on her anti-fracking stance.

Harris forcefully rejected the notion that she had changed her mind on fracking, despite recordings showing her saying there is “no question” fracking should be banned.

“No, and I made that clear on the debate stage in 2020, that I would not ban fracking,” answered Harris. “In 2020 I made very clear where I stand. We are in 2024, and I have not changed that position, nor will I going forward. I kept my word, and I will keep my word.”

Harris appears to be referring to her debate with then-Vice President Mike Pence at the University of Utah in Salt Lake City on October 7, 2020. Yet she did not say she opposed a fracking ban during the debate — commenting only that Pennsylvania native Joe Biden did.

“Joe Biden will not end fracking,” said Harris in 2020. Later, she repeated, “Joe Biden will not ban fracking. That is a fact. That is a fact.”

“Nowhere in there does she make clear that she had abandoned her previous support for a fracking ban,” noted CNN fact-checker Daniel Dale about an hour after the interview. “Rather, she repeated that Joe Biden, the head of the Democratic ticket at the time, would himself not ban fracking.”

During the campaign, Harris had endorsed a fracking ban. At a 2019 town hall meeting, a participant asked Harris, “Will you commit to implementing a federal ban on fracking your first day in office, adding the United States [to] the list of countries [that] have banned this devastating practice.”

“There’s no question I’m in favor of banning fracking. Yes,” replied Harris.

“It makes perfect sense that at the time she was speaking on behalf of Biden, the president, not the vice president,” said Dale. “I certainly did not hear anywhere in there Kamala Harris saying she personally had abandoned her 2019 view rather she was speaking for Joe Biden.”

Did Kamala Harris Reduce Illegal Immigration?

Harris defended her record on illegal immigration, as well.

“Why did the Biden-Harris administration wait three and a half years to implement sweeping asylum restrictions?” asked Bash.

“Thee root causes work that I did as vice president, that I was asked to do by the president has actually resulted in a number of benefits,” replied Harris. “The number of immigrants coming from that region has actually reduced since we’ve began that work.”

It’s not clear that is correct. After being appointed Border Czar by Joe Biden, Harris raced to pare down the job, saying she merely examined the “root causes” of “migration” from the three countries in Central America that had historically provided the largest share of illegal immigrants aside from Mexico: the “Northern Triangle” nations of El Salvador, Guatemala, and Honduras.

The number of apprehensions at the southern border fell from 684,000 in fiscal year 2021 to 447,000 in 2023. But experts say those statistics alone do not tell the full story.

The number of illegal immigrants from the Northern Triangle processed for removal under Title 8 exploded from 177,000 in fiscal year 2022 to more than 309,000 in 2023, and the Border Patrol is “on track to make about 418,600 Title 8 apprehensions by September 30,” reported the Center for Immigration Studies. At the same time, illegal entrants from the region who were denied admission at ports of entry steadily rose from about 17,000 in fiscal year 2021, to 21,000 in the following year, to about 48,000 in fiscal year 2023. “In other words, while total apprehensions FY2022-24 (projected) declined by roughly 20 percent, apprehensions under Title 8 grew by 138 percent over the same time period,” states CIS.

In raw numbers, Title 8 expulsions rose by 241,000 in just one year of the Biden-Harris administration, not including other illegal entries. Nor does this include Biden-Harris programs to expedite the legal entry of putative “refugees” from these and other countries.

There are two additional reasons to question the relevance of the statement: While most illegal immigration has come from Mexico and the Northern Triangle, “in December 2023, 54% of encounters involved citizens of countries other than these four nations,” according to the Pew Research Center. And the number of illegal immigrants has broken historic records each consecutive year since Joe Biden and Kamala Harris took office.

No Regrets about Telling Americans Joe Biden Is ‘Extraordinarily Strong’

“Right after the debate, you insisted that President Biden is extraordinarily strong. Given where we are now, do you have any regrets about what you told the American people?” Bash asked.

“No, not at all,” replied Harris, reiterating, “Not at all.”

A mere 63 days earlier, Harris not only described Joe Biden as the picture of health but placed an onus on those who questioned his acuity. Moments after Biden’s disastrous June 27 debate with former President Donald Trump, Harris told ABC News Biden had “a slow start, but a strong finish.”

“Joe Biden is extraordinarily strong, and that cannot be debated,” she quipped.

The legacy media have revealed it was precisely the threat of a cognitive test that helped force Biden out of the presidential race. The New York Times reported that, according to two attendees of a July 11 meeting between Biden and U.S. senators, Senator Jack Reed (D-R.I.) issued an ultimatum (in the Times’ words): “If Mr. Biden wanted to stay in the race after a disastrous debate performance that underscored concerns about his condition and mental acuity, he should submit to examination by two independent neurologists who were willing to report their findings at a news conference.”

Harris ‘Very Proud’ of Bidenomics

“You have been vice president for three and a half years. The steps that you’re talking about now, why haven’t you done them already?” Bash asked Harris.

“I’m very proud of the work that we have done that has brought inflation down to less than 3%,” the vice president responded.

“So, you maintain Bidenomics is a success?” asked Bash.

After rattling off a list of the administration’s putative accomplishments, Harris concluded, “I’ll say that that’s good work. There’s more to do, but that’s good work.”

Inflation for 2023 stood at 4.1%, a marked increase from the 1.2% the Biden-Harris administration inherited. Wages have barely kept pace with inflation, as groceries, gasoline, and other household staples have increased by double digits — the highest inflation level in 40 years.

Despite pressing for clear answers from the pair, many observers faulted Bash for not following up on key assertions made by both Harris and Walz, as well as her question choice. Megyn Kelly noted Bash asked “not a single Q on the Emotional Support Governor’s radical trans policies.”

CNN also appeared to make a few misstatements about the interview. Although the network prerecorded the interview, the network’s feed claimed it was aired “live.” After the interview, anchor Abby Phillip referred to the closed-doors segment as a “town hall” event.

Despite reports that CNN would not offer a transcript of the interview, CNN has issued its official transcript of the historic interview.

Kamala Harris will debate former President Donald Trump on ABC News September 10 at 9 p.m.

AUTHOR

Ben Johnson

Ben Johnson is senior reporter and editor at The Washington Stand.

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EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2024 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

U.S. Households Continue to Struggle under Nagging Inflation, Sky-High Interest Rates

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Financial reports continue to indicate that in the three and a half years that have elapsed since the Biden-Harris administration came into office, the percentage of American households that have become financially insecure has grown. Experts say that the administration’s economic policies have contributed to the increase in poverty, particularly by exacerbating inflation through massive federal spending increases, which in turn caused interest rates to spike.

Following a sharp increase in federal spending as part of an emergency COVID relief package that former President Donald Trump signed in December 2020, the Biden-Harris administration and congressional Democrats continued the same level of spending in 2021 and 2022 instead of letting the emergency spending expire, spending $5.9 trillion more than what was spent in pre-pandemic 2019. As pointed out by economic expert J.T. Young, this “excessive spending has helped over-weight demand relative to the supply of goods — too much money chasing too few goods,” causing prices to rise.

When Biden took office in January 2021, inflation was at 1.4%. By March, it had risen to 2.6%, and by January 2022, it ballooned to 7.5%. Six months later, it peaked at 9.1%, a 40-year high. But by December 2022, the rate was still at 6.5%. Currently, the rate is at 3%, which Young noted is still well above the Federal Reserve’s acceptable target rate of 2%.

As Young went on to observe, this was “only half of Americans’ pricing squeeze. The other half comes from the huge jump in interest rates that the Federal Reserve had to implement to cool Biden’s spending-infused inflation inferno. Eleven times the Fed was forced to hike rates, taking them from 0.25-0.50 percent in March 2022 to 5.25-5.50 percent in July 2023,” where it remains currently.

“So, Americans are trapped between inflation’s twin pressures: The prices they pay and the money they borrow,” Young added.

According to data that has recently come to light, the economic situation is continuing to have enormous financial consequences for vast swaths of U.S. households. As reported Wednesday by The Epoch Times, a nonprofit that tracks household budgets called United For ALICE (UFA) has estimated that, according to its most recent available data from 2022, 42% of American households are facing an impossible choice every month: “Pay the rent or put food on the table.”

While the data for 2023 and 2024 has yet been published, recent trends indicate that the struggles have only continued. A Forbes Advisor survey from last year found that 40% of respondents reported living paycheck to paycheck, with 29% saying they could not cover standard expenses. In July of this year, financial services provider LendingTree reported that since 2022, financially insecure households have grown from 34.1% to 36.4%.

“It shouldn’t be terribly surprising,” remarked Matt Schultz, LendingTree’s chief credit analyst. “The perfect storm of record debt, sky-high interest rates, and stubborn inflation have resulted in many Americans’ financial margin of error shrinking to virtually zero.”

Another factor that is hampering millions of households is stagnant growth in wages. Kristen Rotz, president and CEO of United Way of Pennsylvania, told The Epoch Times that 2023 and 2024 have seen virtually no change. “Inflation is slowing, but wages, though increasing somewhat, are still lagging. The cost of the basics outpaced wage growth.”

As a result, food banks from Brooklyn, N.Y. to Michigan are experiencing record demand. A Port Huron, Michigan food bank told the Epoch Times that it recently served a record 38 families in one day. “Groceries are so expensive,” a volunteer observed, stating that the average value of a food pick-up per family is $150. “That amount does not even cover their whole weekly grocery bill. We supplement their food budget so they can pay the rent or car expenses. It’s inflation and the economy that is driving people to us.”

In Brooklyn, about 2,500 people come to the Council of Peoples Organization every week for food, a vast increase from the few dozen that came weekly before the pandemic. According to Chief Executive Officer Mohammad Razvi, many of those coming for the food aid cite sky-high housing costs as a primary reason for not being able to afford groceries. Since the pandemic, home prices have soared 54%.

Republican lawmakers are contending that the financial struggles millions of American households have been experiencing under the Biden-Harris administration are unlikely to change if Vice President Kamala Harris is elected president.

“Every day, the American Dream moves further out of reach, and hardworking Americans are feeling the consequences of the Harris Price Hikes everywhere — from the grocery store, to paying rent, to filling up their cars to get to work,” stated Senator Rick Scott (R-Fla.) last week.

House Ways and Means Committee Chair Jason Smith (R-Mo.) expressed similar sentiments. “One thing Democrats cannot change is the Biden-Harris economic record: 20 percent rise in prices and skyrocketing interest rates preventing families from buying a home and small businesses from growing. Whether it was supporting the trillions of dollars in Democrat spending that overheated the economy or endorsing the absurd claim that inflation was transitory, Kamala Harris has been in lockstep with every one of Joe Biden’s radical economic policies.”

AUTHOR

Dan Hart

Dan Hart is senior editor at The Washington Stand.

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2024 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

Americans’ Inflation Worries Deepen as Biden Claims Economic Victory

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With the November presidential election 24 weeks away, an index measuring consumer sentiment on the economy dropped to a six-month low after its largest decline since 2021. The plummeting confidence comes as President Joe Biden recently shrugged off the concerns while falsely claiming for the second time in less than a week that inflation was at 9% when he took office.

On Sunday, The Washington Post reported that the index of consumer sentiment, which measures the economic perceptions of Americans, dropped sharply amid nagging inflation and rising gas prices. In April, inflation remained well above the Federal Reserve’s target of 2%, hitting 3.4%. While the number is well below the high of 9.1% that was reached in June of 2022, inflation has remained above 3% every month since last summer.

Economic concerns have consistently ranked as the top issue for American voters ever since ever since 2021, when inflation began rising steadily due to a massive uptick in government spending enacted by the Biden administration. A Gallup survey released at the end of March revealed that inflation was the top most worrisome issue for Americans, followed closely by immigration.

The price of consumer goods also continues to rise. Last week, the latest Consumer Price Index summary was released, revealing that the price of all goods rose 0.3% in April, having risen 3.4% over the last 12 months. Overall energy prices rose 2.6% in the last 12 months, while food prices saw an increase of 2.2% in the last year.

Meanwhile, gas prices have also remained consistently high. With a current average price of $3.61 per gallon, gas has shot up 50 cents since the start of the year. Under the Biden administration, the average price of gas has fluctuated wildly, reaching a peak of over $5 a gallon at the start of 2022. The current average price per gallon remains over 60 cents higher than it was when President Donald Trump left office in January 2021.

Popular companies such as McDonald’s, Home Depot, Under Armour, and Starbucks have recently reported underwhelming earnings due to increasingly modest consumer spending with few signs that the economic outlook will improve any time soon. In addition, Walmart, Target, and discount grocer Aldi have recently begun slashing prices of goods in hopes of attracting more business.

“We continue to feel the impact of a more cautious consumer,” said Starbucks CEO Laxman Narasimhan last month. “Many customers are being more exacting about where and how they choose to spend their money, particularly with stimulus savings mostly spent.”

Notably, some Biden administration officials are beginning to acknowledge the financial struggles and low consumer confidence of ordinary Americans after the president appeared to dismiss them earlier this month, claiming that “[w]e’ve already turned [the economy] around.”

“Families are still struggling with prices that are too high,” admitted Jared Bernstein, chair of Biden’s Council of Economic Advisers. “We’ve made a lot of progress in the right direction, and we are going to keep fighting to lower costs for families and make billionaires and corporations pay their fair share.”

A spokeswoman for the Trump campaign remarked that the 45th president would “uplift all Americans” by reducing taxes and increasing wages. “The American people cannot afford four more years of Bidenomics.”

In comments to The Washington Stand, Oliver McPherson-Smith, director of the Center for Energy & Environment at the America First Policy Institute (AFPI), contended that consumers have little reason to be confident in America’s economic outlook under Biden.

“It’s no surprise that consumers across the country are feeling pessimistic about the economy,” he observed. “Bidenomics means overregulation and prolific spending — both of which drive up consumer prices. Under Bidenomics, household energy costs are on average 22% higher than under President Trump’s America First policies. Gas prices are up on average 39.7%.”

McPherson-Smith continued, “The May measurement of the University of Michigan’s index of consumer sentiment is a searing indictment of the Biden administration’s economic mismanagement. Even during the uncertainty of the early pandemic months, at no point during the Trump administration were American consumers this pessimistic about the economy.”

Michael Faulkender, Chief Economist at AFPI, further expanded on the repercussions that rising inflation has incurred on American pocketbooks.

“The Bidens will keep blaming everyone but themselves for the inflation devastating Americans’ budgets,” he told TWS. “As published recently in Bloomberg, if one looks at inflation-adjusted disposable income — how far paychecks go in purchasing power terms — it rose 12% under Trump and is at 3% under Biden. Once you incorporate the effect of interest rate increases on anyone borrowing money to buy a car, home, or place a purchase on their credit card, Americans are worse off. Those effects are even greater for the most vulnerable in our society.”

“No amount of deflection, demagoguery, or gaslighting will alter the economic harm the American people have suffered under the far-left policies of the Biden administration,” Faulkender concluded.

AUTHOR

Dan Hart

Dan Hart is senior editor at The Washington Stand.

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EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2024 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

5 More Lies in Joe Biden’s 2024 State of the Union Address

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The fallout continues over President Joe Biden’s 2024 State of the Union address, and his errors, lies, and misstatements continue to pile up. Here are five more false claims Biden made on Thursday night.

1. Biden Claims He Has Created 15 Million Jobs and 800,000 New Manufacturing Jobs

In speaking about his economic record, Biden boasted of creating “15 million new jobs in just three years,” including “800,000 new manufacturing jobs in America and counting.”

Most of the jobs Joe Biden has taken credit for “creating” were merely jobs destroyed by the 2020 COVID-19 pandemic lockdowns.

The economy under Joe Biden actually created about one-third that many new jobs: The economy added 5.49 million jobs above pandemic level in three years. President Donald Trump’s economy created 6.7 million jobs in the three years before the pandemic. Similarly, Joe Biden has added 114,000 manufacturing jobs, compared to the pre-pandemic level of February 2020. President Trump created 400,000 manufacturing jobs in the same period.

American workers have enjoyed little of this job growth. The U.S. workforce added 2.9 million foreign-born workers (legal or illegal), while there were 183,000 fewer U.S. citizens in the workforce between the fourth quarter of 2019 and the same period in 2023.

Some of this job growth is illusory, since a total of 8.3 million Americans hold multiple jobs, and 386,000 Americans are working two full-time jobs — a number that reached a 30-year high of 447,000 last September. More than two million people work two (or more) part-time jobs. And the number working-age Americans who are working, the labor force participation rate, remains below pre-pandemic levels.

2. Wages Are Up and Inflation Is Down under Biden?

Joe Biden touted his economy as a boon for middle-class workers, adding, “Wages keep going up. Inflation keeps coming down. Inflation has dropped from 9% to 3% — the lowest in the world and trending lower. … Consumer studies show consumer confidence is soaring.”

Real wages remain lower under Biden, thanks to soaring inflation sparked in part by massive rounds of stimulus-level government spending. Americans under Biden need to earn an extra $11,434 a year to maintain the same level of income they had before he took office. The average American, of course, has not closed the gap.

“Bidenflation” shows up in everyday prices: The cost of dairy products has risen 59 cents since February 2021. A loaf of bread costs more dough — 49 cents a loaf more. Other staples, utilities, and necessities have risen, including chicken (41 cents a pound), a dozen eggs (92 cents), gasoline (72 cents a gallon), home heating gas (29%), and electricity (21%).

Rather than address these concerns, Biden focused on shrinkflation and “junk fees.” Even Biden’s speechwriters felt the need to sell the public on their policy’s relevance, insisting, “It matters. It matters.” Biden’s focus invited withering criticism from his chief rival for the presidency. “Biden talked about the SNICKERS bars, before he talked about the border!” posted former President Donald Trump on Truth Social.

The Biden administration did give some indication of who benefitted from its policies: The White House invited Shawn Fain — president of the United Auto Workers, which had delayed its endorsement of Biden’s reelection — to the State of the Union address.

3. The Myth of Trump’s Muslim Ban

In his section on immigration, Biden attempted to distinguish himself from “my predecessor” by saying, “I will not ban people because of their faith.”

Biden is alluding to President Trump’s so-called “Muslim travel ban.” In December 2015, candidate Trump called for a “total and complete shutdown of Muslims entering the United States until our country’s representatives can figure out what is going on.” Then-President Barack Obama had admitted 12,500 scantly-vetted “refugees” from Syria. Trump also cited widespread, anti-American sentiment and terrorist activity throughout the Islamic world for decades, including a poll of Muslims from the Center for Security Policy which found “25% of those polled agreed that violence against Americans here in the United States is justified as a part of the global jihad.” But he never pursued such a policy in office, using model policies enacted by the Obama-Biden administration.

In his first week in office, Trump signed Executive Order 13769, placing a 90-day moratorium on some immigration from Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen. It also required vetting of people hailing from nations whose background checks do not meet U.S. standards. The move was far from unprecedented. Under the Visa Waiver Program Improvement and Terrorist Travel Prevention Act of 2015, Barack Obama imposed similar restrictions on anyone who was “present, at any time” in Iraq, Sudan, Syria, Libya, Somalia, and Yemen in the past four years. Yet activist courts initially ruled Trump could not impose the same policy, eventually accepting an amended version that barred immigration from Iran, Libya, Somalia, North Korea, Syria, Venezuela, and Yemen.

In 2020, Trump broadened this net of protection by excluding the terror-tied nations of Kyrgyzstan, Myanmar, Eritrea, Nigeria, Sudan, and Tanzania. (Muslims make up a mere 4% of Myanmar’s population, 0.3% of Venezuela’s population, and officially zero percent of North Korea’s.) The Supreme Court upheld the policy, Presidential Proclamation 9645, in Trump v. Hawaii (2017). Biden rescinded the executive order on his first day in office: January 21, 2021.

The threat proved to be anything but illusory. Authorities arrested a Syrian refugee, 21-year-old Mustafa Mousab Alowemer, for plotting to blow up a Christian church in Pittsburgh, Legacy International Worship Center, to support ISIS.

4. Making the Rich ‘Pay Their Fair Share’ of Taxes?

Joe Biden promised to enact “a fair tax code” by “making big corporations and the very wealthy finally begi[n] to pay their fair share. Look, I’m a capitalist. If you want to make, you can make a million or millions of bucks, that’s great. Just pay your fair share in taxes.”

The top 1% of income earners paid 42.3% of U.S. income taxes in 2020, the most recent year available, according to an analysis from the nonpartisan Tax Foundation. The top 10% paid 73.7% of income taxes. All told, the top half of income earners paid 97.7% of all taxes, while the bottom half paid 2.3%.

By contrast, a growing number of Americans paid no income tax. An estimated 57% of Americans paid nothing in federal income taxes in 2021, according to the Tax Policy Center.

By any just reckoning, the wealthiest Americans are paying their fair share of income tax — and a good deal of our share, as well.

5. Biden Has Not Raised Federal Taxes on Anyone Making Less than $400,000?

“Under my plan nobody earning less than $400,000 a year will pay an additional penny in federal taxes,” Biden claimed. “Nobody. Not one penny. And they haven’t yet.”

If Joe Biden has not squeezed more money out of those making less than $400,000, it’s not for lack of trying. Biden and congressional Democrats have endorsed numerous proposals that would have extracted more of the federal budget from those beneath Biden’s alleged income threshold. Those proposals include:

  • Expanding the number of items that must be registered under the National Firearms Act, with a $200 fee for each item
  • Reinstating the Affordable Care Act’s individual mandate and $695-per-person penalty, which President Trump eliminated
  • Imposing a carbon and/or methane tax. One proposal would charge companies $1,800 per ton of methane they handle (not emit), with the cost rising 2% above inflation each year
  • Increasing corporate taxes, which pass on approximately one-third of increased costs to consumers by raising prices (and another third by reducing payroll costs/hours)
  • Hiking cigarette taxes, which fall disproportionately on the working class

The greatest way Biden has funded the federal budget at the expense of the middle class is through inflation. As Henry Hazlitt explained in his classic book “Economics In One Lesson”:

“Inflation is a form of taxation. It is perhaps the worst possible form, which usually bears hardest on those least able to pay. … It discourages all prudence and thrift. It encourages squandering, gambling, reckless waste of all kinds. It often makes it more profitable to speculate than to produce.”

Here is the previous collection of “14 Lies and Myths in Joe Biden’s 2024 State of the Union Address.”

AUTHOR

Ben Johnson

Ben Johnson is senior reporter and editor at The Washington Stand.

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EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2024 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

High Consumer Prices among Top Concerns as Voters Lose Confidence in Biden, Polls Show

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As new polls indicate that American voters remain worried about the persistently high cost of goods and have largely lost confidence in President Joe Biden’s handling of the economy, a leading economist is pointing out that the economies in red states that feature free market policies are outpacing the economies of blue states.

An NBC News poll published Sunday revealed that Biden lagged behind former President Donald Trump by over 20 points on the question of “which candidate would better handle the economy.” Overall, the poll found that Biden’s approval rating has reached the lowest point of his presidency at 37%.

The survey comes as voters say that the economy is among their top concerns going into the November elections. A recent Harvard CAPS-Harris poll found that inflation was the primary worry for 32% of respondents, a close second behind the border crisis at 35%.

While inflation has largely leveled off since reaching a high of 9.1% in June 2022, consumers are still worried about the persistent rising costs of virtually all goods since the 2020 pandemic that have not come back down. As reported by CNN, “More than 90% of the items tracked in the Consumer Price Index are more expensive than they were in February 2020, with most price increases landing north of 20% and some (fuel and margarine) approaching 55%.” Overall, food prices have risen almost 25%.

Stephen Moore, distinguished fellow in Economics at The Heritage Foundation, joined “Washington Watch” last week to discuss the current economic outlook in America.

“What’s happening in America today is you’ve got red states with low taxes, less regulation, [and] right-to-work that are doing extraordinarily well,” he explained. “You know, they’re actually booming [in] Texas, Florida, Tennessee, Utah, Idaho. So many of these states, [like] South Carolina, the southern states are doing amazing. … [B]y the way, the South now is the number one leading region in the economy. It used to be the northeast for 100 years. But the northeast is losing its people, its businesses, its capital. And they’re going to states like Florida and Texas and Arizona … because the taxes are lower [and] there’s a more pro-business atmosphere. They follow free market policies. That’s what American businesses want. That’s what workers want.”

Moore, who also serves as a senior economist at FreedomWorks, went on to argue that the Biden administration’s federal spending policies have negatively affected the economy.

“[T]he question becomes, ‘Why don’t we do, on the national level, what works in the states? Why don’t we cut our taxes, reduce our regulations? Why don’t we get our budget under control?’ We’re running a $1.5 trillion debt. … It’s because we’ve got a president who is spending and printing and borrowing a trillion and a half dollars a year — it’s as obvious [as] the sun ris[ing] in the East and set[ting] in the West when you have that kind of out of control spending. You know what? You’re going to get inflation.”

At an event last week, Biden accused grocery stores of “ripping people off” through “price gouging, junk fees, greedflation [and] shrinkflation.”

“That’s the way all these Democrats are,” Moore responded. “They keep saying, ‘Oh, the profits are too high.’ Why don’t you go out there and show you can make a profit? It ain’t so easy to do it. These are businesses that are providing jobs, providing growth for our economy, putting food on our table. I’m sick of him criticizing American businesses.”

AUTHOR

Dan Hart

Dan Hart is senior editor at The Washington Stand.

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2024 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

Some Facts about Israel You Might Have Missed

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In terms of its natural resources, Saudi Arabia is one of the wealthiest nations on earth. Holding known oil reserves of roughly 265 billion barrels, this nation of 37 million boasts a landmass of 830,000 square miles, and Saudi’s people have a per capita income of about $34,000.

Israel’s total area is about 100 times smaller than Saudi Arabia — 8,600 square miles. The Jewish state has about 14 million barrels worth of proven oil reserves; statistically, this equals to 0% of the total known oil reserves in the world (although Israel is seeking to optimize its oil resources nonetheless). Since its inception as an impoverished nation in the late 1940s, Israel’s per capita income is now better than $53,000 — the highest, by far, in the Middle East.

My point is not to disparage the Arab countries surrounding Israel. Rather, it is to recognize that the people of this tiny nation have taken a historically underdeveloped region and built a thriving country. Writing for Stanford University’s Hoover Institution, scholar Peter Berkowitz notes that since the early years of the 20th century, “Jewish residents of Palestine and then Israeli citizens have planted over 250 million trees, and Israel has become a world leader in desalination and irrigation. A booming wine industry and large offshore gas fields contribute to the diversification of Israel’s economy.”

Additionally, the Bloomberg Innovation Index ranks Israel as having the second-highest level of technological research and development in the world (South Korea is number one). Idan Adler of the consulting and accounting giant Deloitte writes that Israel is “one of the hottest innovation and technology hubs in the world. With over 6,000 active startups and an economy dominated by industrial high-tech and entrepreneurship, Israel certainly [has] earned its nickname ‘The Startup Nation.’”

So far, so good. But what about the 700,000 Palestinian Arabs who, in 1948, either left what is now Israel or were forced to flee? Is it fair of the Jews in Israel not to allow the descendants of those who left, now numbering around six million people, not to return?

First, no one should underestimate the difficulties experienced when people have to flee from their homes, leaving behind what they have known for the uncertainties of exile. At the same time, bear in mind the context of the original flight: Arab military resistance to the new Jewish state was intense. As the U.S. State Department reports, on May 13, 1948 — the day before the State of Israel was formally created — the Jewish people in Israel were attacked by “Arab armies from Lebanon, Syria, Iraq, and Egypt. Saudi Arabia sent a formation that fought under the Egyptian command.” Also, various Arab leaders called on Palestinian Arabs to flee, and many Palestinians left with the defeated Arab armies. And since 1948, Israel has fought several major wars with its Arab neighbors and been under continuous assault from Islamist terrorists on its borders.

So, should Israel allow those who left and their now millions of descendants back in? Consider three essential and generally unacknowledged realities. First, as scholar and journalist Fareed Zakaria has written, “anti-Semitism has spread through the Islamic world like a cancer. … Anti-Semitism is now routine discourse in Muslim populations in the Middle East and also far beyond.” The fact that every Arab nation is virtually Jew-free makes this point vividly. And nowhere was this more evident than in the demonstrations supporting Hamas’s horrific attack on Israel of last month in Lebanon, Iran, Iraq, Turkey, and Yemen, not to mention “people, including children, waving Palestinian and Hamas flags, dancing and singing in the streets” in “major Palestinian cities, including Ramallah, Hebron, Nablus, and Jenin.”

For Israel to invite people possessed by an acute hatred for the Jewish people to enter its territory would be little more than national suicide.

Second, why have the Arab nations all around Israel not thrived as has the Jewish state? Why have the heirs of the Palestinian migration not rebuilt their lives as fully as the Jews of Israel, a ragged and brutalized people who sought only to live in their ancestral homeland after the Holocaust? Could it not be that the Arab cultures in which they live — oppressive, autocratic, religiously constrictive — discourage the kind of personal liberty and economic innovation that have built Israel into the thriving society it now is? Or that erstwhile Palestinian leaders have siphoned-off the billions in aid they have received to line their own pockets?

Finally, the persecuted Jewish people, for centuries driven from pillar to post in many regions of the world, just want a place to call their own. One need not believe in the demonic origin of anti-Semitism, as do I, to simply acknowledge that an irrationally hated people group, the longtime brunt of pathological maltreatment from Germany to Iran, deserve a place where they can breathe easily and live normal lives.

America is such a place — and must always be — but Israel is uniquely and deservedly so. Long may the flags of both nations wave.

AUTHOR

Rob Schwarzwalder

Rob Schwarzwalder, Ph.D., is Senior Lecturer in Regent University’s Honors College.

RELATED ARTICLE: Professor Suspended for Saying “Hamas Are Murderers”

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2023 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

As Homeownership Costs Soar and Inflation Persists, Americans Sour on Biden’s Economy

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President Joe Biden turned 81 years old on Monday, and he was greeted with the lowest approval rating ever recorded by NBC News at 40%. While a large part of the number is due to Democrats’ disapproval of Biden’s handling of the Israel-Hamas conflict, it’s also likely a reflection of an economy that continues to struggle under the weight of persistent inflation, skyrocketing mortgage rates, a decline in full-time jobs, and ever-expanding federal debt.

The president has continued to tout “Bidenomics” in recent weeks, despite stating last week that he acknowledges there is a “disconnect between the numbers and how people feel about their place in the world right now.” Polls show that the American public is indeed not connecting with the White House’s messaging on a massive scale. A Fox News survey taken last week revealed that almost 80% of Americans rate the economy negatively.

As economists are pointing out, the raw economic numbers are a tremendous cause for concern. Joel Griffith, a research fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, joined “Washington Watch” last week to give a snapshot of where things currently stand.

“The typical family has lost more than $4,000 in real inflation, just adjusted income since President Biden took office, and that $4,000 pay cut is not even taking into account the rising home ownership costs,” he observed. “… [A]s [we]’ve seen real income decline, we’ve also seen credit card balances hit an all-time record $1 trillion. That’s about a $3,000 a family increase over the past year and a half, even as savings rates have plunged near all-time lows. Bidenomics has been a disaster for American families.”

Polls show that Americans are continuing to feel economic pain when they compare their income with prices. An Associated Press poll last month found that “three-quarters of respondents described the economy as poor,” with two-thirds saying their expenses have risen and only one quarter saying their income had also gone up. Compounding the problem is that the prices of many of the items that Americans most commonly buy have inflated substantially. Since February of 2020, the average price of a gallon of milk is up 23% ($3.93), a pound of ground beef is up 33% ($5.35), and a gallon of gas is up 53% ($3.78).

As Griffith went on to explain, one of the primary reasons for the decline in real income currently being experienced by Americans is the exploding cost of home ownership.

“If you’re looking to get a mortgage right now on a standard middle class home, that mortgage payment is costing you about $1,000 per month more than it would have cost you just a year and a half ago,” he noted. “… These are the worst economic conditions since the 1970s. … [T]hat was a time when we also had declining real income, and we also had sky high inflation. So arguably, it’s even worse now than it was then because it’s never been less affordable to buy a home. If you look to buy a home, it costs you about half of your income just to make the mortgage payments and the property taxes. It has never been this bad in terms of home ownership.”

Griffith further illustrated how reported job growth numbers are misleading. “[E]very month, the Biden administration loves to tout these jobs growth numbers. But what they fail to tell us is actually that over the last six months, we’ve actually seen a decline in full-time jobs. The only reason why we have seen the top line jobs growth numbers positive is because we’ve seen a surge in part-time jobs, meaning we have a lot more people today working double jobs just to pay the bills.”

As the national debt approaches $34 trillion, Griffith underscored how runaway federal spending is leading to unyielding inflation.

“[S]pending is out of control — it’s been out of control a long time,” he said. “The interest we’re paying right now on the federal debt is $10,000 per family per year. The amount of money that we’ve borrowed over the prior year is $25,000 per family of four. We cannot keep this up. A big part of the reason why families today are suffering from this inflation … is because for the last three years, we have spent wildly beyond our means, and we relied on our central bank to print the dollars to buy that debt.”

“We have to change this trajectory now, and I’m hopeful Congress will actually attempt to do so once they come back from Thanksgiving and Christmas break,” Griffith concluded.

AUTHOR

Dan Hart

Dan Hart is senior editor at The Washington Stand.

RELATED ARTICLE: We Need to Talk about Joe: Dems Show Growing Concern over Aged, Inept Biden

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2023 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

Exiled Cuban Journalist: ‘Socialism Is Institutionalized Envy’

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Approximately 36% of young Americans, ages 18 to 22, hold a positive view of socialism. However, for exiled Cuban journalist Yoe Suárez, this positive view of socialism is not based on reality. On a recent episode of the Outstanding podcast hosted by Joseph Backholm, Suárez and Washington Stand Editor-in-Chief Jared Bridges discuss their firsthand experiences with socialism and its wide-ranging consequences.

“The first time I ate a tangerine in years was here in [the] USA,” Suárez said. “It’s amazing because Cuba is a tropical island, you know? It should have fruits there. That’s an image that can maybe portray what’s happening in Cuba.” Suárez went on to discuss the various crises Cubans endure, including blackouts, inaccessible medicine, and a lack of necessities like food and milk for families. When Backholm asked Suárez what the government’s objective was, he replied, “The principal goal is political control. And then they have to build a narrative of goodness behind that.”

Bridges shared his experience living under a socialist government in Minsk, Belarus. “At the time, the things I ran into was just seeing how that system for that long a time oppressed people,” he said. He discussed his inability to find prescribed medicine after going to seven different pharmacies. “To put it in perspective today, here in America, I’ll go to the drug store and get upset if I have to wait 15 minutes.” Bridges further noted that his experience shed light on how, rather than everyone being equal in their belongings and opportunities under socialism, people are stripped of basic needs including medicine. “What became evident to me was that something is not what it says it is,” Bridges stated.

Backholm wondered how to change the phenomenon happening “here in the United States where you have a growing number of young people who actually seem enthusiastic about socialism,” with Bridges adding how this enthusiasm takes place amongst Christians as well.

“The saddest thing is that socialism takes a lot from envy,” Suárez said. People want what they can’t have, and, for Suárez, socialism feeds the flame of envy toward those who have more. “Socialism is institutionalized envy. It’s that. Socialism is just that.” He went on to observe that the fundamental issue is when too much power is centralized in one place. Sharing is good, but it must come from a place of voluntary charity. As Suárez stated, “If it’s voluntary, it’s charity. And charity is good.” But as Backholm added, “Compelled generosity is not generosity, it is theft. It is totalitarian. It is robbery.”

Backholm further pointed out how our sinful nature, whether living under capitalism or socialism, leads to the exploitation of others and often manifests into greed. “If our hearts are unregulated, we will take advantage of other people to our own benefit,” Backholm stated. “What a biblical worldview argues for is a decentralization of power. … The free marketplace, by nature, decentralizes power.” In response, Bridges reflected on how a free market society also gives us the ability to speak out.

When the discussion turned to equality, it was noted that the desire for ultimate equality does not have an end because nothing will ever be enough to satisfy. Suárez, for instance, was kicked out of his home country for speaking out against socialism. As Bridges pointed out, this socialist view of equality does not lead to actual equality, but rather a totalitarian sense of political control where the government tells you what you can and cannot do with your goods, needs, and opinions.

For Backholm, Suárez, and Bridges, the ability to distinguish between voluntary charity and compelled generosity is the difference between socialism and capitalism. Neither is without flaw, but as Suárez stated, “The solution to a headache is not cancer.”

AUTHOR

Sarah Holliday

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2023 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

No, You Can’t Invoke the 14th Amendment to Raise the Debt Ceiling

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Earlier this month, Treasury Secretary Janet Yellen warned the U.S. could run out of money to pay its bills by June 1 if Congress does not raise the debt ceiling. This has led to a game of chicken between the White House and the Republican-controlled House of Representatives.

President Biden has demanded Congress pass legislation that raises the debt ceiling without any changes to the way the federal government spends money. House Republicans passed a budget bill that would raise the debt ceiling but would also return government spending to 2022 levels. In addition, citing the fact that Social Security is on pace to be insolvent by 2035, the Republican spending plan proposes modifications to Social Security that would increase its chances of long-term sustainability. The White House has opposed all of it.

Instead of compromising with the majority of Republicans in the House, some on the Left have come up with a theory that would allow them to act unilaterally. In fact, Senate Democrats held a press conference encouraging President Biden to “invoke the 14th Amendment” so they can raise the debt ceiling without the involvement of the Congress.

As a matter of habit, the U.S. spends more money than we bring in. As a result, we’re forced to borrow money each month to pay the bills, which means that next month’s bill is always higher than last month’s bill. The U.S. debt is now over $31 trillion dollars, which represents more than $94,000 per citizen. It was only $12 trillion in 2010.

Because of our habitual overspending, Congress routinely considers legislation to raise the debt ceiling. In fact, Congress has raised the debt limit 13 times since 2000. Despite our familiarity with debt limit debates, no one has ever proposed “invoking the 14th Amendment” as a way of raising the debt limit before. The reason no one has ever proposed it before is because it’s nonsense.

The 14th Amendment does many things, but the relevant section for this discussion is Section 4, which says:

“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations, and claims shall be held illegal and void.”

The 14th Amendment was passed right after the Civil War in 1868 and sought to put the issues of the Civil War in the past in several ways. It clarified that all people, regardless of their skin color, would enjoy equal protection under the law. In addition, to avoid any attempts to revive the struggle, it prohibited civil and military officers who had supported the Confederacy from holding any state or federal office again. Most relevant to this discussion, it also said the debts of the Union “shall not be questioned” but the Union was not going to pay the debts of the Confederacy.

Now, you have most Democrats in the U.S. Senate claiming that this language — which was unambiguously a promise to pay Union debt but not Confederate debt — somehow gives President Biden the power to ignore Congress when it comes to debt ceiling legislation in 2023.

While this interpretation is absurd on its face, it’s worth remembering the Supreme Court was recently convinced the word “sex” actually means “gender identity,” and by extension the word “woman” actually means “anyone who wants to be a woman.” Once you’ve accepted the progressive claim that language can mean anything you want it to mean, the only limits to the Constitution are the limits to your creativity.

To be fair, even if there was an attempt to “invoke the 14th Amendment” to unilaterally raise the debt ceiling, legal challenges would follow and the Supreme Court would likely halt the effort as the unconstitutional abuse of power it would be.

The good news is, there are points of agreement in this debate. Both the president and Congress agree a default on U.S. debt would be terrible. But whatever the problem is, consolidating political power into the hands of one man and destroying the checks and balances our system is built upon is not the solution.

If Democrats doubt this, they would do well to remember that once upon a time, they didn’t love the president, and that guy is trying to be president again. If they don’t want to live in a world where a crazy old guy is doing whatever he wants from the White House, they shouldn’t try to create a world in which a crazy old guy is allowed to do whatever he wants in the White House.

AUTHOR

Joseph Backholm

Joseph Backholm is Senior Fellow for Biblical Worldview and Strategic Engagement at Family Research Council.

RELATED ARTICLE: Yellen: 14th Amendment Can’t Appropriately Be Used to Raise Debt Ceiling

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2023 Family Research Council.

The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

What Is Fractional Reserve Banking and Is It Good or Bad?

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After the collapse of Silicon Valley Bank (SVB), I received several questions related to the collapse. One by Dr. Michael Overfield caught my eye. He says:

“The question I have is about fractional reserve banking. This is more in the news following the failure of the Silicon Valley Bank. [Some] feel we should outlaw fractional reserve banking. This policy would assure that our banks would have our funds secure whenever any of the depositors want them. But the depositors would have to pay a fee, or negative interest rate to get this service. Additionally funds would not be available for loans for business, homes, education and other needs. I have not seen the issue of fractional reserve banking addressed in the FEE newsletter which I read daily. Thank you in advance for your consideration.”

Before I highlight what I think about fractional reserve banking (FRB) we should spend some time dissecting what it is.

Ever wondered what happens to your money when it gets deposited at the bank? Or maybe you’ve just always assumed that the bank keeps it all on hand?

Think again. When you go to the bank and put your money in, economists call this money bank deposits. Today in the United States, banks do not typically keep 100% of deposits on hand. Instead, when you deposit your money, some of it is kept in the bank, but the bank lends the rest out to borrowers looking for funds.

Economists call this system fractional reserve banking because only a fraction of total deposits are kept in the bank’s reserves. This is in contrast to full reserve banking, in which 100 percent of deposits are kept in the bank’s reserves.

To give an example of fractional reserve banking, imagine I deposit $100 in FEEBank. FEEBank can decide they want to keep 20% of my money on hand ($20) and lend out 80% ($80) for a year to earn 5% interest from a borrower.

At the end of the year when the loan expires, FEEBank earns $4 from the loan they gave and pays me 1% interest ($1) for my money.

This is a win-win-win. I earn money while my money is idle. The bank earns money on the loan. The borrower is able to borrow money at an acceptable rate.

Despite the upsides, you may have noticed a potential issue with the above example. Let’s scale the bank up a bit to see this issue manifest in a more realistic example.

Imagine FRB on a larger scale. Ten people put in $100 each for a total of $1,000 in FEEBank’s reserves. If the bank wants to keep 20% in reserves, they keep $200 on hand, and they can lend out $800.

Now imagine one customer goes in and wants to take their $100 out. FEEBank has lent out $800 of the $1000 and they have $200 on hand. They give the first customer $100 of the $200 and are left with $100.

But now say a second customer comes in and wants their $100 back too. You probably see where this is going. If the second customer withdraws all funds, the bank is left with $0 on hand.

If any other depositors come in and ask for money, the bank is in trouble. FEEBank has no way of giving depositors the money they request! They can’t simply call back the $800 loan. If this happens, FEEBank goes under. In our modern economy, regulators would come and take over bank operations and FEEBank owners would lose their investments (unless they get bailed out or can borrow the money).

So FEEBank has a decision to make when engaging in FRB. The larger the percent of deposits kept on hand, the smaller the chance that depositors will clean them out. On the other hand, having a larger percentage of deposits means banks can’t make as much money from lending.

Customers experience a trade off too. Banks are able to hold money and offer the customers interest because the bank lends out their deposits. So customers are more at risk when their banks lend out their funds, but they receive a better return.

So, given the risk to customers, should FRB be prohibited? I don’t think so. But I also think that’s the wrong question.

The bank hypothetically not being able to pay back depositors is no big issue. A lot of our financial system is built on risk. When you loan money, you may not get your money back. When you loan money through an intermediary (like a bank), it’s possible they don’t get paid back. And, so long as customers are made aware of the risk that FRBs may run out of money, I don’t see any problem with letting customers take that risk.

If we think people should be able to turn their money into poker chips at casinos, I think it’d be odd to say they shouldn’t be able to turn it into fractional bank deposits.

But, as I said, I think this is at least partly the wrong question. I do think FRBs would exist in a modern competitive system, but I can’t be sure because our banking system is not competitive.

Government facilitated deposit insurance, depositor bailouts, ballooning regulatory codes, and bailouts for banks deemed “too big to fail” make it difficult to know what the banking system would look like in the modern US absent the visible hand of government.

All of this ignores the even bigger government intervention in the world of finance—a monopoly on the production of currency. Economist Lawrence White has written extensively on both the theory and history of banking in a world with competing monies.

In a freer system, I think it would likely be easier to find banks who keep all money on hand and charge a yearly fee, similar to what Dr. Overfield mentions in his question above.

Similarly, economist Robert Murphy has proposed a full reserve system which doesn’t require yearly fees and allows for lending by having depositors agree to lock in their funds for a specific amount of time which matches with the loan maturity.

Of course, this system still runs the risk of companies not being able to pay back their loans therefore making banks unable to pay back depositors. But it is, at least, an alternative option to the somewhat bland world of banking choices available today.

In summary, I don’t find FRB to be illegitimate, ethically or economically. Businesses constantly manage and weigh risks every day that, under certain circumstances, could blow up in the faces of owners or customers.

So long as customers are not defrauded by promises of it being completely risk free, my assumption is some successful entrepreneur will be able to effectively manage the risk of fractional reserves to provide depositors with a relatively high return.

But I am bothered by how standardized the banking industry is today and how few options there are for customers. It seems unlikely to me that in a world free of layers of subsidization, regulation, and monetary monopoly that our banking system would look like it does today.

AUTHOR

Peter Jacobsen

Peter Jacobsen teaches economics and holds the position of Gwartney Professor of Economics. He received his graduate education at George Mason University.

RELATED ARTICLE: A Billionaire Progressive Has Transformed America—by Destroying It

RELATED VIDEO: How to Survive a Bank Collapse

EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.