Tag Archive for: national debt

Budget Office’s 10-Year Forecast: Historic Deficits, Record Debt, Higher Taxes

America’s fiscal future is gloomy, according to the 10-year forecast released Wednesday by the economic meteorologists (accountants, really) at the Congressional Budget Office (CBO). The CBO projected that by 2034 the U.S. federal government will run a $2.6 trillion deficit, equivalent to 6.1% of GDP, while public-held debt would nearly double from $26 trillion to $48 trillion, reaching a record 116% of GDP. These numbers are “mind boggling” and “absolutely astounding,” said Heritage Foundation research fellow Jeffrey Griffith on “Washington Watch.”

Indeed, the historic nature of America’s irresponsible borrowing binge is so unprecedented that it earned multiple mentions in the CBO’s report summary. The CBO noted that a debt equivalent to 116% of GDP represents “an amount greater than at any point in the nation’s history.” That’s more debt — both in absolute terms, and as a percentage of GDP — than the U.S. accumulated during any war, including the Revolutionary War and World War II, during any economic crisis or peacetime spending binge, or even during the century and a half that the government survived without an income tax.

Regarding the deficit reaching 6.1% of GDP (the 50-year average is 3.7%), the report noted that “deficits have exceeded that level” only three times since the Great Depression: “During and shortly after World War II, the 2007-2009 financial crisis, and the coronavirus pandemic.” In other words, soon the U.S. federal government will be running up the credit card as fast as it did during America’s largest international war and the two worst economic crises of this millennium — for no discernable reason at all.

The problem, fundamentally, is too much spending. The CBO estimated government revenues to average 17.8% of GDP over the next 10 years, slightly above the 50-year average of 17.3%. That estimate was based on the assumption that the 2017 tax cuts will be allowed to expire in 2025. By contrast, the CBO estimated that government spending will average 23.5% over the next decade, topping out at 24.1%, far higher than the 50-year average of 21%.

Although the CBO’s statistics might be useful for comparisons over time, they fail to communicate the gravity of America’s current economic peril. Griffith bridged the gap by converting the trillions into numbers that can be brought home to each family. “We owe $400,000 per family in federal debt,” he said. “We’re expected to add another quarter million dollars per family over the next 10 years.” Who’s ready for a third mortgage?

Two types of spending were leading culprits in the CBO’s growing deficit projection: “Growth in spending on programs that benefit elderly people and rising net interest costs” — in other words, mandatory entitlement spending and servicing the debt. The CBO projected that mandatory spending will increase steadily to 15.1% of GDP, net interest payments will increase to 3.9%, while discretionary spending (both military and domestic) will actually decrease to 5.1% by 2034 — if you can believe it.

Forecasters have known for decades about the fiscal turbulence catalyzed by the rising longevity of America’s aging population. The relatively new factors are the recent arrival of a high interest system and its costly interaction with mountains of recently accrued debt.

According to the Committee for Responsible Budget, for the first time, net interest payments exceeded Medicaid spending in 2023 and will exceed defense spending and Medicare spending in 2024. “Starting next year,” wrote CBO, “net interest costs are greater in relation to GDP than at any point since at least 1940, the first year for which the Office of Management and Budget reports such data.”

Griffith translated, “We’re already paying around $10,000 per family per year, just on the interest on the federal debt. And that is going to nearly double to close to $20,000 per family per year.” Sorry, Jimmy, I know you wanted to go to college. But now your Uncle Sam needs that money to pay off his gambling debts.

These factors, combined with sultry stagnation of Bidenomics, are cooking up the perfect fiscal storm. Americans can expect a “Poor Front” to follow. “Such soaring debt would slow economic growth, push up interest payments to foreign holders of U.S. debt, and pose significant risks to the fiscal and economic outlook,” analyzed the CBO. “It could also cause lawmakers to feel more constrained in their policy choices.” Coming from an agency that reports to Congress, that last sentence is the bureaucratic equivalent of, “Don’t say I didn’t warn you, boss.”

Based on historical precedents, Griffith described “multiple ways this can pan out.” Through Door Number One, America could fully embrace European socialism. We already have most of the social programs; now we just need the taxes to match. This solution could avoid the fiscal crisis at the cost of “a long-term relative decline in our prosperity,” said Griffith. Through Door Number Two lies the fate of Portugal, Italy, Greece, and Spain, who nearly went bankrupt during the Great Recession through extreme profligacy. To obtain the foreign loans they needed to stay afloat, they were forced to make deep spending cuts dictated by outside countries — which naturally caused massive social unrest. Through Door Number Three, Griffith described “very extreme examples” of hyperinflation, such as Argentina and Venezuela. “None of the scenarios are good,” he warned.

Predicting the future is notoriously impossible, and CBO budget forecasters are usually no more successful than weather meteorologists. If anything, however, the CBO’s debt estimate is a conservative, even “optimistic” one, as The Wall Street Journal editorial board remarked skeptically. “They assume no recession and that the 2017 individual tax cuts and Inflation Reduction Act’s sweetened ObamaCare subsidies expire in 2025. Oh, and that Congress doesn’t lather on more spending, and more student debt isn’t canceled by executive decree.” That’s four unsafe assumptions that each lower the CBO’s 10-year debt estimate.

Undeterred by the glowering forecast, the Biden administration has planned a weekend cook-out. “Over the past three years, the Biden administration has driven an historic recovery,” Treasury Secretary Janet Yellen declared during Thursday testimony before the Senate Banking Committee, with all the cheeriness of a turnip. She later conceded under questioning that “we need to reduce deficits and to stay on a fiscally sustainable path,” an answer as effective as a clogged culvert. “By suggesting that we need to stay on a sustainable path, she’s saying we’re on one right now,” Griffith responded. “We are already on the path to unsustainability.”

Yellen further argued that America’s current debt burden is nothing to worry about. “Thus far, in real terms, the interest burden of the debt has remained within or below historical norms,” she said. According to the CBO, the 50-year average of net interest expenditures is 2.1% of GDP; the U.S. government spent 2.4% of GDP servicing the debt in 2023 and will spend 3.1% of GDP servicing the debt in 2024. Coming from a current Treasury Secretary and former Federal Reserve chair, Yellen’s remark is akin to an air traffic controller arguing, “Thus far, in real terms, that jet airliner accelerating down the runway has not yet become airborne.”

In response to a question from Senator Mike Rounds (R-S.D.), Yellen said she had “seen no sign” of waning foreign interest in U.S. debt, an “absolutely ludicrous” remark in Griffith’s estimation. “Over the last two and a half years, foreign investors have only been willing to purchase about one penny of every new dollar of federal debt that we’ve taken on. In years past, foreign investors bought about one third of our federal debt,” Griffith explained. “With investor demand drying up for that debt, that means that the federal government has to pay more to those who will lend us money. … That trickles down directly to us as consumers.”

While the Biden administration may be unconcerned about the debt, at least some members of Congress have sought to restore sanity and accountability to the budgeting process. Thus far, their achievements have been flimsy at best. As a result of the spending cuts Republicans negotiated in the debt limit deal last summer, the CBO reduced their estimated deficit for 2024 by $0.1 trillion (4%) and their estimated cumulative deficit for 2024-2033 by $1.4 trillion (7%). You could as easily dig a trench with a teaspoon, or stop a locomotive’s momentum with a Q-tip, as resolve America’s budgetary crisis with such puny half-measures.

This situation illustrates the truth that elections have consequences. The reason why congressional budget hawks can’t achieve any significant savings is that there are too few of them, compared to their colleagues who want to keep spending money. At root, this is a problem that can only be solved when voters and candidates get serious about demanding and delivering fiscal sanity in Washington. America is barreling straight toward a fiscal cliff. Will anyone care enough to stop her?

AUTHOR

Joshua Arnold

Joshua Arnold is a senior writer 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.

The Congressional Uni-Party Continues to Bury America, like Venezuela, Deeper and Deeper into Debt

The Constitutional Republic of the United States is currently being run like a Communist Venezuelan “Democracy.”

The interest alone on the out of control U.S. national debt is approaching the annual appropriations price tag for our military and national security defense expenditures.

Megan Henney  from FOX Business reported,

The U.S. national debt is climbing at an astronomical pace and has shown no signs of slowing down despite the heightened scrutiny on government spending.

The national debt — which measures what the U.S. owes its creditors — fell to $34,088,375,076,993.31 trillion as of Wednesday afternoon, according to the latest numbers published by the Treasury Department. That is down about $21 billion from the $34,109,378,375,744.03 figure reported the previous day.

By comparison, just four decades ago, the national debt hovered around $907 billion.

The Congressional House Republican and Democrat Communist ran Uni-Party control all expenditures from the Treasury Department.

So the buck stops with those individuals in the Uni-Party congress approving the appropriations currently burying our nation in debt. Instead of a balanced budget they continue to fund useless back door Continuing Resolutions.

Our fractured political system Is ran by two incompetent political parties with massive corruption and the rampant tax and spend fleecing of the American tax payer will probably eventually collapse our economy.

The fake news media continues to blame former President Trump for adding 2 trillion plus to the deficit for his tax cuts instead of blaming the congress for failing to stop the insane spending.

This intentional internal attack on our republic by the Uni-Party Communists will eventually lead to another civil war in my opinion.

Our founding fathers did make sure to include a 2nd amendment in our Bill of Rights to prepare for and approve of this eventuality.

Right now we also have political prisoners incarcerated for trying to bring attention to a massive fraud election via a peaceful (for the most part) constitutionally protected 1st Amendment protest on the Capital on January 6th 2021.

Now in February 2024, Instead of securing our borders with walls and razor wire the Communists are trying to decide how much money to borrow from Communist China to build walls and put razor wire around judicial buildings in the swamp filled Washington, D.C.

This tax payer expense is for Trumps upcoming banana republic trial initiated by Biden’s Marxist weaponized Justice Dept.

Apparently the Biden Administration is afraid of we the people initiating action to protect Trump from their illegal fraud prosecution of our former President vice securing our borders.

As an example, over 7.7 million Venezuelans have left Venezuela, a nation that the United States Congress and Biden economic policies are emulating.

Where can Americans flee now to escape political persecution and the economic turmoil headed our way if our nation collapses like Venezuela?

My Venezuelan wife was granted asylum in the republic of Colombia for 10 years before relocating to Florida to be with me via the “legal” immigration process.

Let’s not destroy our republic with the Biden Uni-Party Marxist agenda as there is no place else left to go.

The majority of the 800,000 Venezuelans and two million plus Cubans living legally in the USA support Trump.

Those who have been granted U.S. citizenship will no doubt be voting for him. They have no place else to go for freedom.

So take a stand and vote in November 2024 to return Trump back to the White House. Our children and grandchildren are depending on us and Trump to keep them free.

©2024. Geoff Ross. All rights reserved.

RELATED ARTICLE: U.S. National Debt of $34,088,375,076,993.31 Trillion is a Ticking Time Bomb

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Inflation Under Biden Hiked The Massive National Debt In A New Way In 2023, Experts Say

Interest rate hikes to combat sky-high inflation under President Joe Biden have led the Federal Reserve to run over a hundred billion dollar deficit, adding to the national debt, experts told the Daily Caller News Foundation.

The Federal Reserve in past years has operated a net surplus, remitting those excess earnings to the Treasury to pay off the national debt, according to a press release from the Fed. In 2023, following an inflation-driven increase to the federal funds rate, the interest rate that the central bank has to pay to commercial banks that are holding excess cash overnight, the Fed began losing money, which the Treasury has to issue debt to pay, according to experts who spoke to the DCNF.

“The Fed’s losses do contribute to the deficit,” George Selgin, director emeritus of the Center for Monetary and Financial Alternatives at the Cato Institute, told the DCNF. “Normally, the Fed saves the government money by sending most of the interest it earns on its securities back to the U.S. Treasury. But because the Fed now pays interest on banks’ reserves, when the rate it pays goes up, its remittances to the Treasury go down, and lately the rate it pays has risen so much that this past year alone it owed banks more than $100 billion more than it earned. Until it makes up for this loss and also for losses from the previous few years, which could take a long time, it won’t be sending anything to the Treasury.”

The Fed was able to remit around $79 billion to the Treasury in 2022 before having to take out $16.6 billion in debt by the end of the year as rising interest rates took hold, later losing $114.3 billion in 2023, according to the Fed press release. The Treasury received $109 billion, $86 billion, $54.9 billion and $62.1 billion from the Fed in 2021, 2020, 2019 and 2018, respectively.

The rates that the Federal Reserve pays on the overnight reserve balances held by commercial banks have risen in accordance with hikes in the federal funds rate, which the Fed has put in a range of 5.25% and 5.50%, the highest rate in 22 years, in response to high inflation that peaked at 9.1% in June 2022 under Biden. Inflation has since moderated to 3.4% as of December — still not at the Fed’s 2% target, but enough to prompt a median of Fed governors to predict three rate cuts before the end of 2024.

“The Fed’s rate hikes are supposed to counter inflation by raising the cost of borrowing, which is supposed in turn to cause people to borrow and spend less,” Selgin told the DCNF. “But the same hikes add to the government’s deficit, by reducing the Fed’s Treasury remittances, but mainly by raising the interest the Treasury has to pay on its shorter-term obligations. So unless the government cuts spending, the rate hikes can fail to counter inflation, and might even aggravate it, and the public bears the double burden of higher rates and high, if not higher inflation.”

Many economists point to high-spending policies for a portion of the inflation that has plagued Americans under Biden. Biden signed the American Rescue Plan in March 2021 and the Inflation Reduction Act in August 2022, authorizing $1.9 trillion and $750 billion in new spending, respectively.

The U.S. national debt exceeded $34 trillion for the first time in the country’s history on Dec. 29, 2023, with around $27 trillion being held by the public and the other more than $7 trillion being intergovernmentally held. For Fiscal Year 2023, the federal government ran a budget deficit of around $2 trillion when the president’s failed student loan forgiveness plan is properly accounted for, compared to $1 trillion in the previous fiscal year.

“The reason it has losses is that the Fed printed money to buy federal debt,” Richard Stern, director of the Grover M. Hermann Center for the Federal Budget at the Heritage Foundation, told the DCNF. “Then, when it stopped printing money to buy more debt, new federal deficits fell onto the private money markets. This triggered crowding out and the ensuing interest rate surges we’ve seen. Then the interest rate spike reduced the market value of the existing debt that the Fed is holding — that’s what the losses are.”

Net interest payments on the national debt have also increased rapidly as rates have risen, with any new Treasury debt issued having to be at a much higher interest rate, costing more to maintain and hold. In the first quarter of 2021, when Biden first took office, interest payments totaled around $535 billion, which has grown to more than $980 billion as of the third quarter of 2023, according to the Federal Reserve Bank of St. Louis.

“I’d say that the losses are indicative of the inflationary money printing used to cover Biden’s spending and just one more example of where the government is using inflation and interest rate manipulation to cheat bondholders and steal from hard-working Americans,” Stern told the DCNF.

The White House did not respond to a request to comment from the DCNF.

AUTHOR

WILL KESSLER

Contributor.

RELATED ARTICLE: Dem Demands On Automakers Could Backfire On Their Own Climate Agenda And Americans’ Wallets, Experts Say

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

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.

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

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.

McCarthy Proves What He’s Made Of with Gritty Budget Win

House Speaker Kevin McCarthy (R-Calif.) hasn’t had an easy path. After painstakingly working through conservatives’ gripes with House leadership this January, he finally squeaked out the votes he needed to assume the third most powerful job in Washington. But even after that chaos died down, questions loomed. Was he cut out to be speaker? Would he bring the fractious, competing corners of the GOP together? In a staring contest with Democrats, could he win? The answer, Americans learned from a hard-won victory on the budget bill, is a resounding yes.

With just two votes to spare, McCarthy accomplished something that seemed improbable even 48 hours ago: he held his fragile coalition together and passed a bill that all but forces Democrats to the negotiating table. Under the House proposal, America would not default on its loans. But there were strings attached. In exchange for raising the debt ceiling and protecting the country’s credit line, conservatives are demanding a massive overhaul of spending and deep cuts to bloated programs.

For starters, Republicans would set a $1.47 trillion limit on discretionary spending — with a 1% increase built in for each year. In a blow to the Democratic messaging machine, even the AP admits that the legislation poses no threat to Social Security and Medicare, which has been Joe Biden’s favorite scare tactic about the bill. To the cheers of most conservatives, the proposal also scoops up all of the unused COVID relief money from the series of bills passed between 2020-2022. Another way the GOP carved out savings was to roll back the $71 billion boost in IRS funding.

According to the Congressional Budget Office (CBO), all of this would make a huge difference in the country’s bleak financial picture, slashing the deficit by a whopping $4.8 trillion in a 10-year span.

Fueled by coffee and power naps, Republicans worked past 4 a.m. Wednesday to hammer out the deal. That all-nighter paid off. The bill eked through by a 217-215 margin that afternoon, putting Republicans in an unusual place — the driver’s seat.

In a triumphant press conference after the vote, McCarthy threw down the gauntlet. “We have lifted the debt ceiling, so nobody could worry about whether the debt ceiling is going to get lifted. We did it. The Democrats have not. [If] the president wants to make sure the debt ceiling is going to be lifted, sign this bill.”

Although Rules Chairman Tom Cole (R-Okla.) made it clear that it’s “not the end of the road,” he insisted that “it’s a great personal and political victory for the speaker who got it done. He got a lot of people to vote for a debt ceiling increase who’ve never done that before.”

House Freedom Caucus Chair Scott Perry (R-Pa.) was equally complimentary, telling Family Research Council President Tony Perkins on “Washington Watch” that the vote was “quite honestly, another historic moment in modern times here in Congress.” “For most people, this is just another day in the saga of Washington. But … as far as I know in modern times, this has never happened before.” And one of the reasons it was possible, he said, is because conservatives put specific conditions on the speaker in January — things like single-subject bills. More debate. Free-flowing amendments. In other words, Congress is back to operating how the Founders intended, not as a graveyard of ideas where decisions were predetermined by a powerful few.

Even if you go back to the 2011 days of Cut, Cap, and Balance, Republicans never insisted on “real cuts in that first year.” But this isn’t your 2011 GOP. And while the prevailing wisdom in Washington may be that the House has to cave to Joe Biden and Senate Democrats without demanding concessions like meaningful spending reform, Perry insists, “We’re not going to cave.”

“We have a narrow majority,” he conceded, but “we have worked for months — right up until about 4:00 in the morning last night to get this to where we can pass it. And, it is the beginning of the conversation, but what it does is … it shows [Biden] that we can pass something and he has no choice except to negotiate.”

For Republicans, who only control one part of the legislature, this is a “landmark occasion,” Perry says. “We’re supposed to be in a completely defensive posture. [But] we are on offense. And I will also take some pride in this: 90% of this bill has been written by the House Freedom Caucus — and we are driving and pulling our entire conferences … to the Right, to the side of principles that [say] we cannot keep spending and bankrupting our country.”

In a movement that’s watched Republicans snatch defeat from the jaws of victory, Wednesday’s developments were groundbreaking. “I’ve watched this process for 20 years,” Perkins said. “I’ve even watched the Republicans when they were in the majority and they had the numbers. … But the reality is, even when Republicans had a large margin to work with, they never ever drove a stake in the ground and stood on principle. That is a sea change here in Washington, D.C.”

And McCarthy’s week-long speaker drama is a big reason why. Even then, FRC believed Republicans — and the speaker in particular — would emerge stronger from that emotional debate. It was there that the California leader proved he was willing to listen, to compromise, and to pursue the tough changes voters demanded. Now, Perkins insisted, we’ve had time to see that McCarthy was sincere. “We’ve seen a succession of decisions that the speaker has made. He’s stuck to his word. … And Republicans have [also] kept their word and done exactly what they said they were going to do when they elected this speaker.” So Democrats need to realize, he warned, “you guys aren’t going to cave.”

Already, that message seems to be sinking in. Far-left senators like Amy Klobuchar (D-Minn.) are calling on Biden to negotiate — and negotiate now. Moderate Joe Manchin (D-W.Va.) agreed, pointing out, McCarthy’s bill is the “only bill actually moving through Congress that would prevent default.”

As NRO’s Noah Rothman explains, “The White House and Senate Democrats have so far operated on the assumption that Republicans were too disunited to be worth negotiating with.” Now, the script has flipped. “And with the Republican position strengthening and Democrats’ eroding, it seems like it’s only a matter of time before the White House consents to good-faith negotiations with their Republican counterparts. The sooner, the better.”

In the meantime, Perry has a message for those “weak-kneed senators over there that always work with the Democrats: … You need to stick with your Republican colleagues [and] do the work of the American people. … There’s a fighting spirit in this House of Representatives,” he insisted, “but … we do expect our senators to stand up and stand for us.”

AUTHOR

Suzanne Bowdey

Suzanne Bowdey serves as editorial director and senior writer at The Washington Stand.

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.

CBO: Interest on Debt to Triple by 2033, Surpass Defense Spending by 2028

Here’s one ballooning problem the military can’t simply knock out of the sky: net interest payments on the U.S. government’s debt are projected to triple over the next 10 years, totaling 300% of 2022 outlays in 2033, according to a new report published this week by the Congressional Budget Office (CBO).

According to CBO projections, interest on the debt (which claimed 7.5% of federal government spending in 2022) will rise sharply to 10.3% of spending in 2023 and then continue rising steadily, surpassing defense spending (11.9% of spending in 2022) in 2028 and reaching 14.4% of spending by 2033.

This bad news on rising interest costs comes amid another, short-term crisis regarding the debt ceiling. The U.S. government hit its statutory debt limit of $31.4 trillion on January 19 of this year. Treasury Secretary Janet Yellen has resorted to “extraordinary measures” to “borrow additional funds without breaching the debt ceiling,” the CBO explained, but they estimate that “the Treasury would exhaust those measures and run out of cash sometime between July and September of this year” unless Congress acts to raise the debt ceiling. For every penny Congress raises the debt ceiling, it will only aggravate the interest problem more.

The increase in net interest payments has two primary causes: interest rates and deficit spending.

First, the Federal Reserve’s interest rate hikes to fight inflation contribute to higher interest rates the U.S. must pay on preexisting debt, with a small lag in time. The Federal Reserve has raised the federal funds interest rate eight times in the past 12 months, from a targetrange between 0.25%-0.00% in January 2022 to a range between 4.50%-4.25% today.

“Net outlays for interest, which rose by 35 percent last year, are projected to increase by 35 percent again this year,” said the CBO. “The projected increase in 2023 occurs primarily because the average interest rate that the Treasury pays on its debt has risen sharply this year and is expected to rise further as maturing securities are refinanced at rates that are higher than those that prevailed when they were initially issued. For example, the interest rate on 10-year Treasury notes averaged 1.3 percent in 2021 and 2.4 percent in 2022; that rate averages 3.8 percent in 2023 in CBO’s current economic forecast.”

Second, continued deficit spending increases the volume of debt on which the U.S. government must pay interest. (To clarify, “debt” is the total, cumulative amount owed, while “deficit” is the difference between expenditures and revenues over a given period of time.) “Debt held by the public (in nominal terms) is on track to increase by 6 percent from 2022 to 2023,” said the CBO, which “projects a federal budget deficit of $1.4 trillion for 2023.”

In fact, the CBO projects the federal government will run an annual deficit of $1.4 trillion-$2.8 trillion (amounting to 5.4%-7.3% of estimated Gross Domestic Product [GDP]) for every year, 2023-2033. In their February report, the CBO added 20% to their projected deficit over the next 10 years, due to changing economic and legislative factors.

Assuming that “current laws governing taxes and spending generally remained unchanged,” CBO projects that “federal debt held by the public is projected to increase in each year of the projection period and to reach 118 percent of GDP in 2033 — higher than it has ever been.”

Rising interest payments will only exacerbate the U.S. government’s budget shortfalls. According to the CBO project, the percentage of the budget devoted to paying interest will nearly double from 2022-2033. Other slices of the pie must get smaller as a result. But, as Figure 1 shows, the decreases won’t come from mandatory spending (it’s mandatory, after all), which is already a majority of federal spending. Instead, the increasing interest payments mean a smaller slice of the pie is left over for discretionary spending — including a vital subset, defense spending. The CBO estimates that defense spending will decline from 13.2% of federal expenditures in 2024 to 11.1% in 2033 (with nondefense spending declining proportionally), as interest payments increase from 11.5% to 14.4% over the same period.

VIEW: Figure 1: CBO Projection – Spending by Category (in Pct.)

Of course, one often overlooked feature of the spending “pie” analogy is that the pie can grow in size — through either expanding revenues or assuming additional debt. As Figure 2 makes clear, the CBO doesn’t predict that discretionary spending — either for defense or nondefense purposes will shrink in absolute terms. Rather, it will grow more slowly than interest payments, mandatory spending (mostly Social Security, Medicaid, and Medicare), and by implication, the whole economy as well.

VIEW: Figure 2: CBO Projection – Spending by Category (in $Billions)

One major asterisk to CBO estimates is their assumption that “current laws governing taxes and spending generally remained unchanged.” There’s nothing wrong with projecting from that assumption — it’s their job at the Congressional Budget Office, actually. But a lot can change over 10 years. For one thing, “forecasting interest rates is particularly challenging,” the CBO admitted in 2020. Three presidential elections and two midterm elections give plenty of time for political coalitions to change “current laws.”

It’s not implausible that America might experience a recession, or even two, over a 10-year period; this, too, could radically alter taxation and spending priorities. Foreign events may also interject themselves; a foreign conflict with, say, China could substantially increase military spending. All these plausible variables could dramatically alter the shape of actual government spending, 10 years down the road.

What the CBO projection can tell us is that our current policies are needlessly backing us into a corner. Just paying the interest on our current national debt will cost more and more, and the government continues to overspend its revenues to the tune of trillions (with a “T”) per year. Meanwhile, the CBO predicts mandatory spending will increase by 60% from 2023 to 2033, primarily due to the population aging into Social Security benefits. The combined pressure of these factors will reduce the federal government’s freedom to spend discretionary funds (on everything else), trimming them from 26.5% of total spending in 2022 (and somehow 29.1% in 2024) to 23.9% of total spending in 2033.

If the CBO’s projection is accurate, when Congress gets around to allocating funds in 2033, they will have less than a quarter to work with out of every dollar that they spend. That quarter must cover all discretionary spending, including defense spending.

Net interest payments are far from the most expensive category of federal spending, as Figures 1 and 2 illustrate, so why do they matter so much? One reason is that they perpetuate the deficit spiral. The CBO called the “net interest outlays increase … a major contributor to the growth of total deficits.” These deficits add to the debt, which then increases the interest the U.S. government must pay even further.

Another reason is the irresponsible folly it implies. The U.S. government is in the situation of a person who has gotten up to their eyeballs in credit card debt. Yet the government not only continues to finance purchases with credit, but only ever pays the interest that comes due, and never pays down the ever-growing principal. Sooner or later, those chickens will come home to roost, and, when they do, everything will smell like chicken houses.

A third reason to worry about the growing interest payments is that it complicates the math for any plan to reach a balanced budget. “Opportunities to trim costs are limited, with only about one-third of federal spending labeled as discretionary,” wrote analysts at The Wall Street Journal. Those opportunities shrink further as discretionary spending is crowded out by interest payments.

A fourth, and related, reason is it leaves us less prepared for any crisis. Apart from possible military crises, the CBO forecasted last month that Social Security will become insolvent in 2033, 10 years away. Analysists have recognized for decades that the entitlements time bomb is most likely to kill us when it finally detonates, but America lacks the political will to address that issue yet.

Still, the U.S. government can be better or worse prepared when that time comes. Our best escape route is to free up some funds to deal with the ultimate insolvency of Social Security. Instead, we continue to spend money we don’t have. It’s as if we are trapped in a corral with a deadly bull lying fast asleep. We could choose to flee before the bull awakes. Yet America has not only remained in the ring, but we have backed ourselves into a corner, limiting our chances to dodge its gory horns. And, on top of that, we occupy ourselves by stringing barbed wire across our best escape route. When the bull finally awakes, we will deserve all the consequences of our folly.

If America’s fiscal situation is dangerous, even desperate, why haven’t we confronted our fiscal irresponsibility yet? One reason is that historically depressed interest rates kept legislators from feeling the consequences of their actions. For 11 out 14 years from 2008-2020, the federal funds effective rate lay under 1% (and most of that time it was under 0.2%). In 2015, the interest rate on a three-month Treasury bill, which averaged almost 5% in 2007, had dropped to 0.03%. This created an era of cheap debt, where Congress could overspend with hardly any consequences. Now, as interest rates rise, as we always knew they would, the U.S. government not only has to shoulder an interest burden to which it is unaccustomed, but it has also lost the habit — or even the façade — of fiscal restraint.

According to the latest CBO report, 2028 represents a shocking threshold: the year when the U.S. government will have to spend more paying the interest on our $31.4 trillion of debt than it will spend on national defense. Whether we reach this landmark a few years early or late, the point is that our profligate legislature is spending our country into a pointless crisis.

Just as no one wants to be the team down by three touchdowns at the two-minute warning, no country should willingly bury itself under so much debt that it’s mathematically impossible to escape. Alas, the only similarity between wisdom and Washington is that both begin with “W.”

AUTHOR

Joshua Arnold

Joshua Arnold is a staff writer at The Washington Stand.

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


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.

Report: True National Debt Exceeds $123 Trillion, or Nearly $800,000 per Taxpayer

The Democrat-CCP continues to impose more crushing debt on the American people, kill businesses, lockdown whole cities throw millions of out work.

China is taking over. Note what’s important and prioritized in their strategy for world domination – debt and spending. Balanced against the value of its commercial assets, the federal government had a combined total of $103.7 trillion in debts, liabilities, and unfunded obligations.

COVID was an act of war  by China– launched during a US presidential election exploited and weaponized by the party of treason.

True National Debt Exceeds $123 Trillion, or Nearly $800,000 per Taxpayer, Report

By Mark Tapscott, The Epoch Times, April 19, 2021:

America’s national debt now exceeds $123 trillion, according to a new report, or more than four times the official figure of $28 trillion, as calculated by the U.S. Treasury Department at the end of March.

Federal spending related to the CCP virus pandemic and economic lockdown added nearly $10 trillion to the total in 2020, according to the latest edition of the “Financial State of the Union 2021” report, compiled and published annually by Chicago-based nonprofit Truth in Accounting (TIA).

But spending amid the pandemic represents only a small portion of the total difference between the official government figure and TIA’s calculation.

“Our measure of the government’s financial condition includes reported federal assets and liabilities, as well as promised, but not funded, Social Security and Medicare benefits,” the report stated.

“Elected and non-elected officials have made repeated financial decisions that have left the federal government with a debt burden of $123.11 trillion, including unfunded Social Security and Medicare promises.”

The TIA report includes in its total debt calculation $55.12 trillion in unfunded Medicare benefits and $41.20 trillion in unfunded Social Security benefits.

Treasury officials don’t include unfunded benefits because they claim recipients have no right to future payments, only to those under current entitlement laws.

The total debt, according to the report, “equates to a $796,000 burden for every federal taxpayer. Because the federal government would need such a vast amount of money from taxpayers to cover this debt, it received an ‘F’ grade for its financial condition.”

Unlike many state governments, the federal government doesn’t maintain a cash reserve to deal with spending necessitated by unexpected crises such as a virus pandemic.

“The coronavirus pandemic and related stimulus packages have caused some of the deterioration because the government had to borrow money to weather the pandemic. If the federal government was properly prepared for a crisis with a true rainy-day fund, it would not have had to borrow money,” TIA stated.

Defense and veterans’ benefits accounted for the largest share of federal spending in 2020 at 23 percent, followed by health and human services with 19 percent, Social Security with 16 percent, interest on the debt at 5 percent, and 2 percent on education. Fully a third (35 percent) of the spending went to what TIA described as “Other.”

Responses

Spokesmen for Sen. Bernie Sanders (I-Vt.) and Sen. Lindsey Graham (R-S.C.), respectively the chairman and ranking minority member of the Senate Budget Committee, didn’t respond to The Epoch Times request for comment.

Similarly, a spokesman for House Budget Committee Chairman Rep. John Yarmuth (D-Ky.), didn’t respond.

Mondays are typically “travel days” for senators returning from their states and representatives from the districts.

A spokesman for Rep. Jason Smith (R-Mo.), the budget panel’s ranking minority member, referred to a March 31 statement in which Smith criticized news spending proposals from President Joe Biden and congressional Democrats.

“Washington Democrats are embracing an historically disturbing appetite for spending. They just passed a nearly $2 Trillion bailout bill. President Biden is now proposing they turn right back around and cut a check for another $2 trillion to spend on a massive grab bag of policies all tied together with talking points,” Smith wrote.

“All the while, the President reportedly has yet another $2 trillion spending proposal in his back pocket awaiting its own news cycle.”

Consultants Agree

Campaign strategists and nonprofit activists interviewed by The Epoch Times about the TIA report expressed agreement that debt requires serious attention to get it under control.

Jim Manley, former communications director to Senate Majority Leader Harry Reid (D-Nev.), said “at some point, both parties are going to have to have a serious negotiation regarding the need to get our fiscal house in better order, and that includes both taxes and spending, but I don’t see that happening anytime soon because our politics are just too toxic.”

But, Manley said, “in the meantime interest rates are low and the economy is digging itself out of the hole the pandemic caused, but there is no reason for Democrats to be at all concerned about the Republicans’ new-found focus on cutting spending after everything the last administration did.”

He was referring, he said, to 2017 tax reform legislation enacted by Republican majorities in the House and Senate and signed into law by President Donald Trump.

Another Democratic campaign strategist, Kevin B. Chavous, told The Epoch Times: “This has been an issue that both parties have simply failed to address. It will not be fixed, though, by doing the same things.”

Chavous said he expects “the infrastructure bill will create jobs and grow the economy by investing in modern technology and cleaner energy sources. Things like a nationalized electric grid and expanded broadband access will make Americans more productive and more competitive in the years to come. It is an expense we have to make sooner than later.”

Taxpayers Protection Alliance (TPA) President David Williams pointed to the need to cut federal spending. “A debt of $123 trillion should be a wake-up call for the country. The bill is coming due very soon, which could have dire consequences for taxpayers and the country.”

Williams said Biden and congressional leaders “are seemingly oblivious to the stark fiscal crisis happening right under their noses. Worse yet, if they are aware of the deep financial issues, they are clearly not doing anything to fix the problem. Instead of finding ways to spend more money, Congress and the president need to find ways to cut spending.”

Citizens Against Government Waste (CAGW) President Tom Schatz noted that President Thomas Jefferson said the nation’s representatives shouldn’t accumulate debts that can’t be paid in their own time, and while this has been problematic for years, it has never been this significant.

Schatz said he believes “members of Congress have an obligation to attempt to bring spending under control and ensure that present and future taxpayers are not forced to fund any federal program that is duplicative, wasteful, and inefficient.”

When The Epoch Times asked TIA President Sheila Weinberg if it’s reasonable to depend upon future economic growth to solve the debt problem, she said no, and noted that the Treasury Department agrees.

“The authors of the Financial Report of the U.S. Government have deemed that under current law and policy, a massive implied increase in the ratio of reported debt to GDP—e.g. future debt will be growing faster than GDP—is simply unsustainable,” she said.

“In other words, under current law and policy, we can’t grow our way out of this, especially considering Medicare grows faster than inflation.”

RELATED ARTICLES:

Schweizer: China’s Influence on U.S. Government a ‘Massive Problem’

Unlike Hobbled U.S., China Stops COVID Stimulus Spending, CUTS It’s Deficit To 3.2%, Economy Recovers Pre-China Virus Momentum

EDITORS NOTE: This Geller Report column is republished with permission. ©All rights reserved. Quick note: Tech giants are snuffing us out. You know this. Twitter, LinkedIn, Google Adsense permenently banned us. Facebook, Twitter, Google search et al have shadowbanned, suspended and deleted us from your news feeds. They are disappearing us. But we are here. Help us fight. Subscribe to Geller Report newsletter here — it’s free and it’s critical NOW more than ever. Share our posts on social and with your email contacts.

Trump Draining the Economic Swamp

If you go back in time and look at the footage of citizen Trump, you will find that Donald Trump has been on point from day one. From the Oprah interview to the NY supreme court as an expert witness during the S&L crisis and everything in between. As stated by Q, America needed to be resurrected. Our Constitutional Republic needed to be restored. Back in 2014, the plan was set and the rest is history. Trump has come aboard to restore the power to the people as intended by our founding documents. And so, along with many other areas being addressed, draining the economic swamp has now begun.

The global financial reset is underway, albeit mostly behind the scenes. The market meltdown may now have been delayed ensuring a Trump victory in 2020 as Trump now is controlling the Fed. Dangers and opportunities through this reset are evident and I will post on this over the months and short years ahead.

The existing controlled and rigged debt based economic and monetary model is being disassembled. You cannot MAGA without controlling your currency. Trump is now going for the jugular and he, (we), will win once again. Let the force be with you sir.

Now I get it, many say this cannot and will not happen and I for one completely disagree. We have been programmed to believe this. And I too, was in that camp, pre-Trump. Well, my friends it’s a new day dawning. The great awakening is upon us as is the light of God. We are winning and draining the economic swamp will soon be (perhaps within a couple of short years), another item to be filed here, in promises kept.

No Longer

The old model of which Trump and company has begun to seize control, will soon be taken out. No longer will there be a debt based monetary system. Sound money will be restored. No longer will the bankers fund both sides of endless manufactured wars, reaping the profits and the harvest. No longer will our constitution and bill of rights be shredded. No longer will we the people be controlled by debt, debt slaves. Face it. We are debt slaves. No longer will we be taxed on our income. No longer will a private for profit banking cartel control our currency as this is in fact a violation of our constitution. Yes, President Trump will lead us back to sound money. Gold may become the de facto currency, so watch gold (and silver) as Trump restores in due time , sound money and crushes the power of the central banks. No more digital fiat. Over the many months to come, the President will expose the Fed and the central bank debt based monetary system. Watch. You will see. This will take some years, but this too will soon come to light. Now it may be confusing along the way. There will be many mixed signals and signs day by day along the way. So stay truly informed. In order to do this you must change the channeland build an arsenal of truth news versus fake news. Americans are  starving for truth. Seek and ye shall find. This will restore your faith, hope and trust. This will help raise your tone level from apathy, anger, fear etc., to perhaps becoming an informed, empowered and engaged and active citizen. If nothing else, you will at least feel better.

In Closing

I will keep this post short and sweet as this is a subject that is rather complex as Trump takes on the Federal Reserve, IMF and the Central Banking Rothschild dynasty. I will be posting content along the way to play my part in keeping us informed. Put on your seat belts. Be prepared. And get some popcorn and enjoy the show! Visit these supportive and insightful links below. Stay the course. Trust the plan. Pray for and support our President.

Q Plan to Save the World

Q We are the Plan

Q From Dark to Light

Video: Global Reset I

Video: Global Reset II

Global Financial Reset

Weekly Address: Draining the Economic Swamp

EDITORS NOTE: This John Michael Chambers column with images is republished with permission.

A Citizen’s Guide to Fixing The Federal Government

The majority of Americans have lost faith in and distrust the federal government. Currently, just 19% of Americans say they can trust the government always or most of the time, among the lowest levels in the past half-century.

What can citizens do to fix the federal government?

fixing federal government guide book coverJohn H. Ramsey has published “A Citizen’s Common Sense Guide For Fixing The Federal Government.” Ramsey presents the problems but more importantly offers common sense solutions to fix what is broken in Washington, D.C. Ramsey lists the most important problems facing the American people as:

  • 70,000 pages of tax code
  • Rampant Deficit Spending
  • 175,000 pages of regulations, many which are not authorized by law
  • Mismanaged Social Security and Medicare Funds
  • Improper Accounting that masks America’s true liabilities

Ramsey offers the following solutions implemented by “We The People”:

  • Tax Only to fund Government with no social engineering
  • Deficit Spending only in national emergencies
  • Tie regulations to law with fair Administrative Courts
  • Repay Social Security and Medicare. Manage as trust funds.
  • Use generally accepted accounting for government

Ramsey proposes a Constitutional Amendment to reign in the federal government.

Most Americans will agree with Ramsey’s analysis and his solutions for fixing the federal government. Some may not agree with his solutions. Creating a new amendment to the Constitution is fraught with dangers. Ramsey’s Constitutional amendment verbiage would be subject to the whims of Congress, those who are the root cause of the problem.

To the naysayers Ramsey responds:

I think there is enough impetus that a Constitutional Convention is probably going to happen. Our task therefore is to influence the outcome. Clearly, Congress may meddle but they cannot stop it.

My goal is to help to adopt an Omnibus Amendment to The U.S. Constitution requiring that our Federal Government:

Tax only to fund Government, with no social engineering. This could be accomplished either with a flat tax based on income or a Fair Tax on consumption. The key is to eliminate 73,000 pages of exceptions, deductions, and attempted social influences that have nothing to do with funding the government.

Deficit spend only in national emergencies; pay down existing debt. You didn’t comment on this but it is crucial that we enact an amendment that stops runaway deficit spending.

Tie regulations tightly to law with fair and impartial Administrative Courts. This provision would tie regulations more closely to the underlying laws which authorize them and would enable the courts to throw out regulations that exceed the specific authorization in law. Furthermore, currently Administrative Courts are the only recourse for citizens wishing to challenge particular regulations, but such Administrative Courts are staffed entirely by government employees who almost always rule in favor of the government. They are not independent and impartial which my Constitutional Amendment would require.

Repay money misappropriated from Social Security and Medicare and manage them independently as trust funds. Repayment of amounts “borrowed” from these funds would reduce the federal deficit by about $2.8 trillion, almost 15% of the total.

Use generally accepted accounting for the federal government. This requirement is simple but not easy, but it is essential because we simply do not know the extent of federal liabilities because they are accounted for improperly and inconsistently, and so much of the exposure is “off the balance sheet”.

There are other efforts being proposed to fix the broken federal government from eliminating the Sixteenth Amendment as proposed under the Fair Tax (H.R.25), to an Article V Convention and a Constitutional convention to impose term limits on the U.S. Congress recently approved by the Florida legislature.

All of these efforts are dramatic bottom up efforts and each has as its goal to fix an increasingly out of control federal government (legislative, administrative and judicial).

The American people have had enough of top down solutions, they hunger for a bottom up approach.

In that light, Mr. Ramsey’s is one of those solutions worthy of a closer look.

RELATED ARTICLE: Pitfalls to Abbott’s Call for Convention of States

Will America Ever Have A ‘Wise And Frugal Government’ Again

Sometimes it is said that a man cannot be trusted with the government of himself.  Can he then be trusted with the government of others?  Recent history has proven that to be very true.  No one of with any measure of moral conscience will deny the recent history of government being shepherded toward oblivion by proponents of evil.  ­I hate to bring it up, but the Obama administration is perhaps the premier example of a man that cannot be trusted and should not be have been granted the privilege of governing our republic.  But unfortunately therein lies another problem that must be addressed as we engage perhaps the most important election in our nation’s history.

As “We the People” prepare to choose who will lead our republic, perhaps we should take a closer look at ourselves and refine our vision of what kind of America do we want going forward.  To aid in our search let us consider what do we want to leave for our children.  History will answer that question loud and clear with the results of our decisions.  If we do not reconnect with the Christian based values that were the foundational building blocks of our America we shall witness the completion of the destructive mission of the progressive enemies from within our population ranks.  Let us as Americans with courage and confidence pursue our own federal and republican principles.

As part of his 1801 Inaugural address, President Thomas Jefferson stated: Enlightened by a benign religion, professed, indeed, and practiced in various forms, yet all of them inculcating honesty, truth, temperance, gratitude, and the love of man; acknowledging and adoring an overruling Providence, which by all its dispensations proves that it delights in the happiness of man here and his greater happiness hereafter.  With all these blessings, what more is necessary to make us a happy and prosperous people? (I couldn’t help but pause here and ask this question.  Have you noticed how the further Americans are indoctrinated against the principles and beliefs that made the United States the  envy of the world, she is actually both less happy and prosperous?)

Still one thing more, fellow citizens—a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned…You should understand what I deem the essential principles of our government…. Equal and exact justice to all men, of, whatever state or persuasion, religious or political…the arraignment of all abuses at the bar of public reason; freedom of religion; freedom of the press, and freedom of a person under the protection of the habeas corpus and trial by jury impartially selected…

Unfortunately, our nation has succumbed to the lowest common denominator when it comes to morality, government function, individual liberties, as well as the economy and other relevant concerns.

If our republic is to reemerge as a beacon of light and liberty, to the teeming masses that would want to come to America legally to become Americans, our nation will first have to return to being the actual America that good and decent people around the world would want to be a part of.  Think about it, as our nation has become increasingly immoral, she has also degenerated from a land of liberty into a semi big government police state over every aspect of our lives.  In other words, the government takes over a people that don’t use self-control.

Without any effort, immorality replaces under utilized or untaught morality.  That is why the immoral from around the world are the majority of individuals now filing illegally into our nation with the permission of a corrupt government that appeases our enemies who want to come in and wreak havoc at taxpayer expense, just to add insult to injury.  That is why the Obama administration was ready to take Arizona to court and put a hurting on Texas for daring to protect the border with Mexico since the immoral federal government has gone loco.

Despite all of the negative developments over the past several decades that have culminated in the worst administration in our nation’s history and could potentially harm our nation beyond repair.  (After all, Obama did say he wanted to fundamentally change America.)  Obviously, his interpretation of changes could not have even been enacted before the turn of the century.  I believe that I have witnessed the real beginning of renewal in our country.  Many people of faith are finally becoming interested enough to learn about and care what happens to the United States of America.  Remember, it was an active, brave and intelligent church that was an integral part of the fight for independence and later against slavery.

Remembering the wise words of orator, author statesman, and abolitionist Frederick Douglas: The Declaration of Independence is the ringbolt to the chain of your nation’s destiny; so, indeed, I regard it.  The principles contained in that instrument are saving principles.  Stand by them on all occasions, in all places, against all foes, and whatever cost.  I wholeheartedly agree with Mr. Douglas.  America, if you are to be great again, you must first seek to be good, for it is then you shall make better decisions and take right actions that will recalibrate our destiny from utter disaster to undeniable recovery and greatness.

VIDEO: Pastor Jack Martin Running for Congress in Florida’s 11th District

Florida’s 11th Congressional District includes Sumter, Citrus and Hernando counties and most of Marion county. The current representative of the 11th Congressional District is Richard B. Nugent (R). Nugent is retiring at the end of his current term.

Pastor John “Jack” Martin has decided for God and country to run for Nugent’s seat. Here is a video of Jack Martin speaking at a Second Amendment rally:

Guns Across America Florida Rally Pastor Jack Martin from Jack Martin on Vimeo.

Pastor Marin’s history is that of a 33 year pastor. He is a member of the Black Robe Regiment and Preacher from The Pulpit. He has been standing up, speaking out and attending various events throughout the State of Florida to Washington D.C. He has always felt that a position as a statesman, U.S. Congressional Rep. to represent The People was his next calling in life.

Martin on his website lists six major crises Americans face:

  1. The National Debt – Over 18 Trillion Dollars
  2. Our Borders – Unprotected and being flooded daily with those entering illegally from many nations.
  3. Our Military both Veterans and Active Duty treated poorly.
  4. Obamacare – Needing to be repealed and replaced.
  5. Israeli / American Relationships – Need to be restored.
  6. Our Judeo Christian Ethics – under heavy attack.

Jack Martin speaking on the Black Robe Regiment at a Deland, Florida Rally in December 2015:

Pastor Martin has been endorsed by William Finlay, Wild Bill for America, also a Black Robe Regiment member among others.

Supporter Deb Howard states, “Pastor Jack is well known for his candor of Gods word and the application in conjunction with today’s times that we face. His deliveries are captivating. I am attaching one in particular that I believe delivers Jacks beliefs as he does walk the walk. There is no denying that people are pleasantly surprised as the preacher from the small country church is ready willing and able to face the evil in D.C. unafraid to be heard and willing to fight the mass corruption within our Halls!”

“Pastor Jack is also acquainted with Geoff Ross, Senior Chief, U.S. Navy (Ret.), Michael McCallister, Colonel, U.S. Army (Ret.), Ann Murrin, PoliticoChicks, Rodney Conover (writer and radio host), Joe The Plumber and numerous others who are supporting, covering the campaign trail and publishing information about him, ” said Howard.

Howard notes, “Our attempt to make Pastor John Martin a household name not only in District FL-11 but nationwide as he is challenging pastors to step out and off of the pulpit and guide congregations to comprehend the true nature of their work. As Black Robe Regiment Pastors joined in leading with George Washington to fight for our independence in the Revolutionary War, so stands John Martin.”

EDITORS NOTE: Readers wanting more information may visit the Jack Martin for Congress website.

The Slow-Motion Financial Suicide of the Roman Empire by Lawrence W. Reed & Marc Hyden

More than 2,000 years before America’s bailouts and entitlement programs, the ancient Romans experimented with similar schemes. The Roman government rescued failing institutions, canceled personal debts, and spent huge sums on welfare programs. The result wasn’t pretty.

Roman politicians picked winners and losers, generally favoring the politically well connected — a practice that’s central to the welfare state of modern times, too. As numerous writers have noted, these expensive rob-Peter-to-pay-Paul efforts were major factors in bankrupting Roman society. They inevitably led to even more destructive interventions. Rome wasn’t built in a day, as the old saying goes — and it took a while to tear it down as well. Eventually, when the republic faded into an imperial autocracy, the emperors attempted to control the entire economy.

Debt forgiveness in ancient Rome was a contentious issue that was enacted multiple times. One of the earliest Roman populist reformers, the tribune Licinius Stolo, passed a bill that was essentially a moratorium on debt around 367 BC, a time of economic uncertainty. The legislation enabled debtors to subtract the interest paid from the principal owed if the remainder was paid off within a three-year window. By 352 BC, the financial situation in Rome was still bleak, and the state treasury paid many defaulted private debts owed to the unfortunate lenders. It was assumed that the debtors would eventually repay the state, but if you think they did, then you probably think Greece is a good credit risk today.

In 357 BC, the maximum permissible interest rate on loans was roughly 8 percent. Ten years later, this was considered insufficient, so Roman administrators lowered the cap to 4 percent. By 342, the successive reductions apparently failed to mollify the debtors or satisfactorily ease economic tensions, so interest on loans was abolished altogether. To no one’s surprise, creditors began to refuse to loan money. The law banning interest became completely ignored in time.

By 133 BC, the up-and-coming politician Tiberius Gracchus decided that Licinius’s measures were not enough. Tiberius passed a bill granting free tracts of state-owned farmland to the poor. Additionally, the government funded the erection of their new homes and the purchase of their faming tools. It’s been estimated that 75,000 families received free land because of this legislation. This was a government program that provided complimentary land, housing, and even a small business, all likely charged to the taxpayers or plundered from newly conquered nations. However, as soon as it was permissible, many settlers thanklessly sold their farms and returned to the city. Tiberius didn’t live to see these beneficiaries reject Roman generosity, because a group of senators murdered him in 133 BC, but his younger brother Gaius Gracchus took up his populist mantle and furthered his reforms.

Tiberius, incidentally, also passed Rome’s first subsidized food program, which provided discounted grain to many citizens. Initially, Romans dedicated to the ideal of self-reliance were shocked at the concept of mandated welfare, but before long, tens of thousands were receiving subsidized food, and not just the needy. Any Roman citizen who stood in the grain lines was entitled to assistance. One rich consul named Piso, who opposed the grain dole, was spotted waiting for the discounted food. He stated that if his wealth was going to be redistributed, then he intended on getting his share of grain.

By the third century AD, the food program had been amended multiple times. Discounted grain was replaced with entirely free grain, and at its peak, a third of Rome took advantage of the program. It became a hereditary privilege, passed down from parent to child. Other foodstuffs, including olive oil, pork, and salt, were regularly incorporated into the dole. The program ballooned until it was the second-largest expenditure in the imperial budget, behind the military.It failed to serve as a temporary safety net; like many government programs, it became perpetual assistance for a permanent constituency who felt entitled to its benefits.

In 88 BC, Rome was reeling from the Social War, a debilitating conflict with its former allies in the Italian peninsula. One victorious commander was a man named Sulla, who that year became consul (the top political position in the days of the republic) and later ruled as a dictator. To ease the economic catastrophe,Sulla canceled portions of citizens’ private debt, perhaps up to 10 percent,leaving lenders in a difficult position. He also revived and enforced a maximum interest rate on loans, likely similar to the law of 357 BC. The crisis continually worsened, and to address the situation in 86 BC, a measure was passed that reduced private debts by another 75 percent under the consulships of Cinna and Marius.

Less than two decades after Sulla, Catiline, the infamous populist radical and foe of Cicero, campaigned for the consulship on a platform of total debt forgiveness. Somehow, he was defeated, likely with bankers and Romans who actually repaid their debts opposing his candidacy. His life ended shortly thereafter in a failed coup attempt.

In 60 BC, the rising patrician Julius Caesar was elected consul, and he continued the policies of many of his populist predecessors with a few innovations of his own. Once again, Rome was in the midst of a crisis. In this period, private contractors called tax farmers collected taxes owed to the state. These tax collectors would bid on tax-farming contracts and were permitted to keep any surplus over the contract price as payment. In 59 BC, the tax-farmer industry was on the brink of collapse. Caesar forgave as much as one-third of their debt to the state. The bailout of the tax-farming market must have greatly affected Roman budgets and perhaps even taxpayers, but the catalyst for the relief measure was that Caesar and his crony Crassus had heavily invested in the struggling sector.

In 33 AD, half a century after the collapse of the republic, Emperor Tiberius faced a panic in the banking industry. He responded by providing a massive bailout of interest-free loans to bankers in an attempt to stabilize the market. Over 80 years later, Emperor Hadrian unilaterally forgave 225 million denarii in back taxes for many Romans, fostering resentment among others who had painstakingly paid their tax burdens in full.

Emperor Trajan conquered Dacia (modern Romania) early in the second century AD, flooding state coffers with booty. With this treasure trove, he funded a social program, the alimenta, which competed with private banking institutions by providing low-interest loans to landowners while the interest benefited underprivileged children. Trajan’s successors continued this program until the devaluation of the denarius, the Roman currency, rendered the alimenta defunct.

By 301 AD, while Emperor Diocletian was restructuring the government, the military, and the economy, he issued the famous Edict of Maximum Prices. Rome had become a totalitarian state that blamed many of its economic woes on supposed greedy profiteers. The edict defined the maximum prices and wages for goods and services. Failure to obey was punishable by death. Again, to no one’s surprise, many vendors refused to sell their goods at the set prices, and within a few years, Romans were ignoring the edict.

Enormous entitlement programs also became the norm in old Rome. At its height, the largest state expenditure was an army of 300,000–600,000 legionaries. The soldiers realized their role and necessity in Roman politics, and consequently their demands increased. They required exorbitant retirement packages in the form of free tracts of farmland or large bonuses of gold equal to more than a decade’s worth of their salary. They also expected enormous and periodic bonuses in order to prevent uprisings.

The Roman experience teaches important lessons. As the 20th-century economist Howard Kershner put it, “When a self-governing people confer upon their government the power to take from some and give to others, the process will not stop until the last bone of the last taxpayer is picked bare.” Putting one’s livelihood in the hands of vote-buying politicians compromises not just one’s personal independence, but the financial integrity of society as well. The welfare state, once begun, is difficult to reverse and never ends well.

Rome fell to invaders in 476 AD, but who the real barbarians were is an open question. The Roman people who supported the welfare state and the politicians who administered it so weakened society that the Western Roman Empire fell like a ripe plum that year. Maybe the real barbarians were those Romans who had effectively committed a slow-motion financial suicide.

Lawrence W. Reed

Lawrence W. Reed

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s.

Who Is Doing More for Affordable Education: Politicians or Innovators? by Bryan Jinks

With a current outstanding student loan debt of $1.3 trillion, debt-free education is poised to be a major issue leading up to the 2016 presidential election.

Presidential candidate Bernie Sanders has come forth with his plan for tuition-free higher education.

Senator Elizabeth Warren supports debt-free education, which goes even further by guaranteeing that students don’t take on debt to pay other expenses incurred while receiving an education.

Democratic Party front-runner Hillary Clinton is expected to propose a plan to reduce student loan debt at some point. And don’t forget President Obama’s proposal to provide two years of community college to all students tuition-free.

While all of these plans would certainly increase access to higher education, they would also be expensive. President Obama’s relatively modest community college plan would cost $60 billion over the next decade. What makes this an even worse idea is that all of that taxpayer money wouldn’t solve the most important problems currently facing higher education.

Shifting the costs completely to taxpayers doesn’t actually reduce the costs. It also doesn’t increase the quality of education in a system that has high drop-out rates and where a lot of graduates end up in low-paying jobs that don’t use their degree. Among first-time college students who enrolled in a community college in the fall of 2008, fewer than 40% earned a credential from either a two-year or four-year institution within six years.

Whatever the other social or spiritual benefits of attending college are, they don’t justify wasting that so much time and money without seeing much improvement in wages or job prospects.

Proponents of debt-free college argue that these programs are worth the cost because a more educated workforce will boost the economy. But these programs would push more marginal students into college without any regard for how prepared they are, how likely they are to graduate, or how interested they are in getting a degree. If even more of these students enter college, keeping the low completion rates from falling even further would be a challenge.

All of these plans would just make sure that everyone would have access to the mediocre product that higher education currently is. Just as the purpose of Obamacare was to make sure that every American had a health insurance card in their wallet, the purpose of debt-free education is to make sure that every American has a student ID card too — whether it means anything or not.

But there are changes coming in higher education that can actually solve some of these problems.

The Internet is making education much cheaper. While Open Online Courses have existed for more than a decade, there are a growing number of places to find educational materials online. Udemy is an online marketplace that allows anyone to create their own course and sell it or give it away. Saylor Academy and University of the People both have online models that offer college credit with free tuition and relatively low examination fees.

Udacity offers nanodegrees that can be completed in 6-12 months. The online curriculum is made in partnership with technology companies to give students exactly the skills that hiring managers are looking for. And there are many more businesses and non-profits offering new ways to learn that are cheaper, faster, and more able to keep up with the ever-changing economy than traditional universities.

All of these innovations are happening in response the rising costs and poor outcomes that have become typical of formal education. New educational models will keep developing that offer solutions that policy makers can’t provide.

Some of these options are free, some aren’t. Each has their own curriculum and some provide more tangible credentials than others. There isn’t one definitive answer as to how someone should go about receiving an education. But each of these innovations provides a small part of the answer to the current problems with higher education.

Change for the better is coming to higher education. Just don’t expect it to come from Washington.

Bryan Jinks

Bryan Jinks is a ?freelance writer based out of Cleveland, Ohio.

“Green Banks” Will Drown in the Red by Jonathan Bydlak

Why does federal spending matter? There are many reasons, but perhaps the most fundamental is that free markets allocate resources better than governments because markets rely on price instead of politics. Many industries show this observation to be true, but the emerging field of “green banks” offers perhaps one of the clearest recent examples.

A green bank is a “public or quasi-public financing institution that provides low-cost, long-term financing support to clean, low-carbon projects by leveraging public funds…to attract private investment.” Right now, only a handful of green banks are scattered across Connecticut, California, New York, Rhode Island, and Hawaii.

Free marketers rightly doubt whether public funds should be used to finance private startups. But regardless of where one stands in that debate, the states’ struggles serve as a valuable testing ground for future investments.

The State of Connecticut operates under a fairly significant budget deficit. California has been calculating its budgets without taking unfunded pension liabilities into account, and it’s gambling with its ability to service its debt. New York continues to live beyond its means. Rhode Island’s newest budget does little to rehabilitate its deficit spending addiction, and, despite having a balanced budget clause in its state constitution, Hawaii has a pattern of operating at a deficit.

In fact, a state solvency report released by the Mercatus Center has each of these five states ranked in the bottom third of the country, with their solvency described as either “low” or “poor.”

This all raises the question of whether these governments are able to find sound investment opportunities in the first place. Rhode Island couldn’t even identify a bad investment when baseball legend Curt Schilling wanted $75 million to make video games about something other than baseball!

Recently, though, there have been calls to extend the struggling green banking system to the federal level. Mark Muro and Reed Hundt at the Brookings Institute argued in favor of federal action in support of green banks. Somewhat paradoxically, they assert that demand for green banking institutions and the types of companies they finance is so strong that the existing state-based green banks cannot muster enough capital to meet demand.

Wherever there is potential for profit and a sound business plan, lending institutions are likely to be found, willing to relinquish a little capital for a consistent and reasonable rate of return. So where are the private lenders and other investment firms who have taken notice and are competing for the opportunity to provide loans to such highly sought-after companies and products?

Even assuming that there is demand for green banking services, recent experience shows that a federally-subsidized system would likely lead to inefficiency, favor trading, and failure. For instance, the Department of Energy Loan Program is designed to facilitate and aid clean energy startup companies. Its portfolio exceeds $30 billion, but following a series of bad investments like Solyndra, Inc., new loan guarantees have been few and far between. The program has already lost over $700 million.

Even the rosiest measurements do not show particularly exciting returns from this system. The Department of Energy itself estimates that over the lifetime of the loans it’s guaranteed, there exists the potential to see $5 billion in profit. However, those estimates also depend on the peculiar accounting methods the DoE itself employs.

This problem is apparent in other government sectors. For instance, determining how much profit the federal government makes off of student loans depends on who is asked. Some say none, while others say it’s in the billions. Gauging the economic impact or solvency of government programs is notoriously difficult, and different methods can yield what look like very different results. Add to that the consistently uncertain nature of the energy market, and profits are hardly guaranteed.

Examples abound of wasteful federal spending, and the growing green technology and renewable energy industry is no exception. The DoE Loan Program has already faced issues that go well beyond Solyndra: Abound Solar, a Colorado-based solar panel manufacturer, was given a $400 million DoE loan guarantee, only to later file for bankruptcy, potentially costing taxpayers $60 million. The Ivanpah Solar Electric Generating System, a 175,000 unit heliostat array in California, received a $1.6 billion federal loan and, because it failed to produce the amount of power estimated, was forced to later request more than$500 million in federal grants from the Treasury Department. A recent Taxpayers Protection Alliance study showed that risky investments in heavily subsidized solar energy could even lead to a bubble similar to the disastrous 2008 housing bubble.

Those who want to expand the government’s role in green banking likely want to see more clean and renewable energy reach the consumer market, and a lot of people probably applaud that goal — but the real question is whether the proposed means can reliably achieve that end. A wise manager with a solid business plan can find investors who will willingly take a chance. Considering the struggles of several states, trusting the federal government to build an even bigger system would exponentially increase that risk.

In contrast, the market offers opportunity to entrepreneurs in the green technology and renewable energy industries. For instance, GreatPoint Energy, a company specializing in clean coal, successfully went the route that other companies do: Design a product or service, find investors, and compete in the marketplace.

SolarCity, a California-based and publicly traded corporation of over 2,500 employees, entered the industry before many government loan programs were established. Thanks to a sound business model and subsequent horizontal and vertical expansion, it has become a leader in the industry. SolarCity’s success, however, cannot be touted by the Department of Energy’s Loan Program, which declined to invest in the company, leading SolarCity to try — and succeed — in finding private investment.

If GreatPoint or SolarCity had failed, only those who willingly participated in the startup would suffer the consequences. The issue with green banking — and indeed government “investments” more generally — is that taxpayers are not party to the negotiations but are the ones ultimately on the hook for failures.

In absolute terms, these billions of dollars are a lot of money. But in the grand scheme of government spending, the amount of money invested in green banks and renewable energy production is relatively small. If Social Security is the Atlantic Ocean, and wasteful defense appropriations are the Mediterranean, then green energy investments fall somewhere in the range of the Y-40 pool: easily measurable but certainly not insignificant.

Your odds of drowning may be smaller in the pool than the ocean, but that doesn’t make the drowning itself any more pleasant. The federal government is already under water; adding new liabilities on the hope that politicians can guess the future of energy is merely a step towards the deep end, not the ladder out.


Jonathan Bydlak

Jonathan Bydlak is the founder and president of the Institute to Reduce Spending and the Coalition to Reduce Spending.