Budget and Finance Archives

House Oversight Investigates John Kerry’s Secret Communist China Deals That Undermined U.S. Economy and National Security

February 4, 2023/in Budget and Finance, Courts & Law, DrRichSwier.com, Elections, Featured, Politics, Taxes /by DrRichSwier.com

By The Geller Report

This parasitic scumbag has made a career out of selling out this country, undermining our economy and national while acquiring enormous wealth. Climate is a euphemism for corruption. Imaginable corruption.

Kerry’s activities, conducted ‘under the guise of climate advocacy,’ could undermine American interests, top Republican says

By Thomas Catenacci | Fox News

House Oversight and Accountability Committee Chairman James Comer, R-Ky., is probing Special Presidential Envoy for Climate (SPEC) John Kerry’s secretive negotiations with his Chinese counterparts.

Comer informed Kerry in a letter sent Thursday afternoon that the committee, under his leadership, has opened an investigation into Kerry’s role in the Biden administration and, in particular, his high-level climate negotiations with the Chinese Communist Party (CCP). To date, Kerry has ignored information and document requests from Comer and other committee Republicans sent when they were in the minority.

“To date, you have failed to respond to any of our requests,” Comer wrote to Kerry. “Yet, you continue to engage in activities that could undermine our economic health, skirt congressional authority, and threaten foreign policy under the guise of climate advocacy.”

“The Committee requests documents and information to understand your role and provide necessary transparency over the SPEC and its activities,” he continued. “As a member of the President’s cabinet, you should be representing the United States’ interests. Your statements, however, consistently show disregard for American national security and taxpayer dollars.”

[….]

Letter to Kerry Re SPEC 118… by Jim Hoft

Despite the high-level role leading the Biden administration’s global climate strategy, Kerry’s office has been tight-lipped about its internal operations and staff members, sparking criticism from Republicans, including Comer, who have demanded transparency for such an important office.

“We are left with an insufficient understanding of your office’s activities, spending, and staffing,” Comer continued. “To enable long overdue oversight of your office, please provide the following documents and information.”

The Oversight Committee chairman added that Kerry has been too soft on China’s human rights violations “while promoting climate negotiations that the CCP does not even appear interested in entering.”

Kerry has been blasted for various comments that have appeared to downplay vast human rights abuses tied to China’s green energy supply chain. After he was asked in November 2021 about how slave labor was reportedly employed by solar panel firms in China, Kerry said he had to stay in his “lane” when negotiating with Chinese officials.

“Well, we’re honest about the differences,” Kerry said at the time. “We certainly know what they are, and we’ve articulated them, but that’s not my lane here… My job is to be the climate guy and stay focused on trying to move the climate agenda forward.”

Since assuming the SPEC position, Kerry has engaged in various private talks with Chinese counterparts, including two 2021 meetings that took place in China. Following a regional climate summit in April 2021, Kerry told CNBC that solving climate change was “not about China.”

“This is not about China. This is not a counter to China,” he told the outlet. “This is about China, the United States, India, Russia… a bunch of countries that are emitting a pretty sizable amount.”

China accounts for about 27% of total global emissions — nearly tripling the total in the U.S., the world’s second-largest emitter, according to Rhodium Group — and continues to approve and construct a large amount of coal power plants.

Why There Are No ‘Fair’ Solutions Out of the Federal Government’s Spending Quagmire

February 3, 2023/in Budget and Finance, DrRichSwier.com, Elections, Featured, Politics, Taxes /by DrRichSwier.com

By Foundation for Economic Education (FEE)

The federal government is facing very serious budget issues, dramatically worsened by the past few years’ expansion in profligate spending. But while that gets most of the fiscal headlines at the moment because of the national debt limit discussion, the Social Security and Medicare Trust Funds have far more unfunded liabilities than the official federal deficit. And those huge problems are well past the “something should be done” stage and getting very close to the “something must be done” stage. That has led some to reconsider reforming Social Security, the famous “third rail” of politics.

The mere possibility of that has energized those who fear that a change from the status quo might give them less, even though the huge financial holes involved cannot be sustained for long, meaning that “doing nothing” for now guarantees a worse deal for many soon. So such opponents are gearing up to prevent any move toward improved fiscal responsibility and sustainability that might involve reducing anyone’s benefits now or in the future by asserting that it would be unfair.

Unfortunately, however, if we rule out all options that might “unfairly” reduce benefits for current or future beneficiaries, we must be unfair to others. The reason is that the federal government has promised trillions of dollars more in benefits than taxes to fund them through Social Security (and even more so for Medicare), and those overpromises leave no fair way out.

Consider the option of reducing Social Security retirement benefits in one way or another. That is not fair, because government promises of ongoing retirement support have led people to believe in continued funding at the promised levels, and to adapt their behavior to those promises. Having done so (e.g., saving less privately for their retirement), it is unfair to cut that funding, because many who relied on benefit promises have become dependent on the government living up to them.

But there is a good reason for considering this possibility—if we continue to do nothing to change things, the trust funds will soon run out and benefits will have to fall substantially from then on, which would also be unfair, and potentially even more so.

Despite that, if history is any guide, any serious proposal of potential benefit reductions will not lead to rational discussion, but fights to make sure someone named “not us” will bear as much of the burdens as possible. We will witness a “guilt parade” of the most obviously pitiful and destitute beneficiaries, none of whom should be forced to “do without,” to remind us of its unfairness (just as we see struggling family farmers when agricultural or water subsidies are under fire; the most seriously ill when medical benefit cuts are proposed; poor, inner-city children when cuts to education funding are considered; etc).

Now, this fairness argument is partly correct. But only partly, because it does not consider the fairness of the alternatives. While benefit cutbacks can be considered unfair to those now and soon-to-be dependent on them, every alternative is unfair as well. Rather than choosing between fair and unfair options, we must choose between unfair ones.

Say we look to maintain benefit promises through substantially higher Social Security taxes. The problem is that people have also adapted their behavior to the promised extent of those taxes (already greater than income taxes for the majority of Americans), and some now depend on not losing any more take-home pay just as many recipients depend on not losing anticipated benefits.

Proposing that we just tax “the rich” more, as by increasing or even eliminating the income limits on Social Security “contributions,” would especially increase its unfairness to higher income earners, who are already paying far more in Social Security taxes than they will ever get back in benefits, and who also pay a sharply disproportionate share of income and other taxes as well (not to mention being in the crosshairs for further increases in those taxes).

Benefits could be maintained without increasing Social Security taxes by federal borrowing. But borrowing is just deferred taxation, so that would unfairly burden whichever taxpayers will be left holding the bag for those taxes. It would also increase the tax uncertainty faced by all Americans, who face a harder task of guessing how, where, when, and on who those future taxes will be assessed.

What about some sort of privatization? That could potentially increase the rate of return earned on retirement savings relative to what Social Security offers, improving the system from this point in time forward. However, such a move cannot magically eliminate its current multi-trillion dollar unfunded liabilities. And if future benefits are to be more closely based on private contributions than the current system, as privatization would require, treating those savers more fairly would unfairly take funds now used to subsidize the retirement of current workers, even though many of them paid far less in taxes than they will receive in benefits under the current structure.

Even doing nothing about Social Security to avoid treating people unfairly is unfair, since the status quo is unsustainable, requiring future commitments to be broken in a major way. Even Social Security statements now communicate that there will soon be too little money to meet their benefit promises.

It is time we realized that there is no fair way out from government Social Security commitments that exceed the funds available. Current overpromises mean that everyone has a plausible fairness claim on their side, yet something must give. The closest we can come to being fair is to avoid making any new over-commitments, to search for ways to make the program more sustainable (to reduce future unfairness problems), and to look seriously at the contentious issue of which of the options will minimize the adverse impacts of unfairness that cannot be avoided altogether. Demonizing any real consideration of the various options, as some have already started doing, only increases the likelihood that there will ultimately be more unfairness than necessary.

It’s also important to recognize that the inherent unfairness we must soon address is not limited to Social Security. That problem comes in the wake of any ongoing government program that offers benefits in excess of costs to beneficiaries at the start, because in a world without free lunches, that requires future Americans to be saddled with the burden of paying for those excess benefits.

So “not fair” also applies not only to the introduction and past expansions of Social Security, but also to current attempts to sweeten the Social Security pot, as with the Social Security 2100 Act. It also applies to Medicare, Social Security’s 1965 offspring, which faces an even larger financing hole, since early recipients got far more benefits than they paid for (both because benefits have increased and because early recipients paid for at most a few years at lower tax rates than now, but got benefits for the rest of their lives).

The same unfairness applies to any government trust fund with unfunded liabilities, such as for the Highway Trust Fund, due to be fully depleted within the next dozen years. (Since benefits from the road work began long before much of the associated costs came due, the program leaves more costs than benefits for succeeding Americans.)

The national debt reflects similar benefits that have not been paid for, unfairly leaving the tab for a huge pile of not-even-remotely-justified government spending projects and policies to later generations (not to mention providing the leverage for further expanding not-yet-paid-for benefits every time the debt limit expansion provides a must-pass piece of legislation).

It is worth remembering that in many areas that have been put under government control, the word “unfair” is correct. But that is because unfairness is baked in from the beginning of such government programs.

We can now only choose among unfair options which will be unavoidably difficult and unpleasant, with a government that has shown very little interest in facing those sorts of problems. And the way to prevent further inherent unfairness problems is not by embracing policies that attempt to buy votes today by creating policies where people are disproportionately treated (debt forgiveness, anyone?). Unfortunately, there is an ever-present pile of policy proposals whose political attraction is just such disproportionate treatment, which justifies little optimism for solutions arising out of the beltway anytime soon.

AUTHOR

Gary M. Galles

Gary M. Galles is a Professor of Economics at Pepperdine University and a member of the Foundation for Economic Education faculty network. In addition to his new book, Pathways to Policy Failures (2020), his books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).

The Crossroads of Collectivism: Trump Tax Plan, Laffer Curve and Reagan & Thatcher Prosperity in the US & UK

November 15, 2022/in Budget and Finance, DrRichSwier.com, Economy, Elections, Politics, Taxes /by DrRichSwier.com

By Phil Brooks

Collectivist States seek Total State Power by Force, Political Action & Economic Means. Once a State controls the Means of Production & Distribution it quickly controls the Wealth of the People. Under Compulsion, Liberty evaporates & horrid enormities occur as the State purges Citizens refusing surrender. These ill effects are the same regardless of which sector in the political spectrum Collectivism arises from.

The United States has reached a Tipping Point beyond which the Aggregation of Total State Power into the hands of a Cabal of Rulers of vetted Legislators & private Central Bankers will be fully consummated – unless a political course change for the Ship of State is made in the present election cycle.

With the reasonable premise we do not need to be taxed more – here are some thoughts about taxation policy & economic circumstances underlying the present, or any, political circumstance.

To start, it is always far more serious if taxes are too high for effective compliance – than if an increment of revenue is lost by tax reduction. Lowering tax rates actually increases revenue – as careful consideration of the following information shall illuminate.

Consider President Ronald Reagan’s experience.

Reagan made tax cuts with a cooperative Legislative Branch. Presidential Candidate Donald Trump can do the same – should Republicans hold control in the House & Senate in the general election of November, 2016.

Taxation advisor Arthur Laffer was a member of Reagan’s Economic Policy Advisory Board from (1981-1989).

Laffer also advised Prime Minister Margaret Thatcher on fiscal policy in the UK during this period.

As you may be aware, simply stated, Laffer’s taxation premise is:

If taxes are low, compliance is high & if taxes are high, compliance is low.

Dubbed the Laffer Curve (LC), it is a quantification of human nature known for centuries.

The chart below expresses the LC axially.

The Laffer Curve

It also happens to demonstrate the realization European monarchs arrived at several centuries ago, assisted by the Rothschild family banking franchises. When you tax people around 50% of their earnings, they begin to lose incentive to participate. For a monarch this could mean losing everything – including one’s head in a revolt.

Enter the concept of Fiat Currency – printing money to bridge the gap between a monarch’s cultural limitation in tax receipts & the additional cost of Imperial Designs. This is the camel whose nose is presently under the US fiscal tent.

A Monarch (or Government) has only to print more currency to reach further into the purses of Subjects (or Citizens) because each unit of currency in their pockets is devalued by the addition of newly created units arriving in circulation, printed out of thin air, in the act of Monarchical (or Legislative) Fiat.

After all, a nation’s currency in its entirety, reflects the sum total of a nation’s Debt – which can be divided into an infinite number of parts or units.

This is the same Central Banking trick known today as ‘Inflation’ – so named because prices of goods & services become necessarily inflated to reflect the intentional devaluation of each unit of the currency.

In this way, Legislators escape culpability for grossly over-spending the People’s Treasure – inflating away its value in an unending game of self-interested appropriation – under cover of Central Bank ‘monetary policy’, over which politicians purposefully have no statutory control.

In return for this political cover, Central Banks accrue interest on Debt Notes they issue from thin air – paid by a government with the power to coerce its people through taxation enforcement up to & including penalty of imprisonment or corruption of blood.

Thus Inflation is onerous, unseen, unbridled & unlegislated Taxation.

By the way, the Monarch (or Government) does not suffer the effect of Inflation, because as much fiat currency as necessary can be printed without limitation – to pay for the original purchase supporting imperial (or state) designs.

The totality of this scheme is quite divisive in governments of popular form.

A few examples illustrate the point.

If government employees receive ‘inflation-adjusted’ compensation, they have a compelling personal stake in perpetrating the unlegislated tax of inflation upon their fellow citizens. This self-interest becomes manifest in several unhealthy expressions for a Republic.

For example, citizens who take government pensions or benefits become wholly compromised in any consideration of the merits of government monetary or other policy & should honorably absent themselves from political advocacy – unless willing to demonstrate complete renunciation of those benefits.

Similarly, the until recently, unheard of practice of active duty US Military Officers engaging in political advocacy – previously forbidden by Service traditions & the Uniform Code of Military Justice (UCMJ) – is now commonplace.

Witness recent Obama campaign signs in the front yards of active duty Military Officers in Washington, DC area communities. Something compelled these officers to do this. This is dangerous precedent for the preservation of Liberty, under a latent threat of military coercion in US politics.

Thus governments become entrenched in folly & inequity that ultimately leads to their dissolution in revolution.

To conclude the point on taxation policy, the following from the Laffer Center’s website is succinct:

“Importantly, the Laffer Curve does not say whether a tax cut will raise or lower revenues, nor does it predict that any and all tax rate reductions would necessarily bring in more total revenues. Instead it says that tax rate reductions will always result in a smaller loss in revenues than one would have expected when relying only on the static estimates of the previous tax base. This also means the higher the starting tax rate, the more dramatic the supply-side stimulus will be from cutting the tax rate. It is possible this economic effect will swamp the arithmetic effect, causing an actual increase in tax revenue.”

Reagan tax cuts combined with cuts in Federal spending produced the real, positive economic effects Laffer described.

Mrs. Thatcher achieved similar results in the UK.

Prosperity resulted.

How much?

For a cogent discussion of the remarkable results achieved with tax reductions by Reagan see: Revisiting Reagan Tax Cuts.

Then politics crept in and the advances were incrementally squandered by forces of what President George Washington called ‘Interest’ – meaning political Self-Interest. In our discussion, we can call this effect ‘Entitlements’.

Mrs. Thatcher codified it another way, calling it socialism: “The problem with socialism is that you eventually run out of other people’s money.”

How did this happen? For an excellent summation see these two links:

Some further observations about how this happened are worth emphasizing. They highlight structural flaws which must be corrected by the People using further Constitutional Amendments.

First, in the smoke & mirrors world of Congressional appropriation of funds & extra-governmental management of monetary policy by the Central Bank Cartel known as the Federal Reserve (Fed), there exists a Deliberate Disconnect in Accountability to the People – because federally elected Legislators cannot be held accountable for monetary policy actions of the private entity Fed. This crippling slight of hand supports vast transfers of the People’s Wealth to the Fed over time – the very root of income disparity in our society today.

All this results from the Federal Reserve Act of 1913 – which established US Central Banking for the fourth time – and from the purported ratification of the 16th Amendment to the US Constitution in 1913, which created Income Tax.

It’s no accident they occurred simultaneously – a one-two punch for the Rothschild Model in a popular government.

“AMENDMENT XVI The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

We’ll deal further with rectifying the problem of the Fed below, but there’s an obvious solution to the inequities & inefficiency arising from Income Tax.

Income Tax must be abolished by a 27th Constitutional Amendment repealing the 16th Amendment. Income Tax can then be replaced by a Consumption Tax in a 28th Amendment. The Consumption Tax (CT) is a very, very low automated percentage of each transaction (no more than 1%). CT obviates the need for an Internal Revenue Service

(IRS), which can be largely retired & eliminated. The aggregate volume of transactions occurring in the US economy ensures more than enough revenue to conduct the nation’s business. Happily, the Laffer Effect of tax reduction boosting an economy, will ensure the US economy reaches the most robust dimensions ever enjoyed.

Understanding the elegant simplicity & unimpeachable fairness of the Consumption Tax is subject for another discussion. Suffice to say here, CT is real, effective & has been successfully used before in the United States.

Additionally in 1971, the Nixon Administration repudiation of the ‘Gold Standard’ backing US currency opened ‘Pandora’s Box’ to the ills of fiat currency because Legislators, in collusion with Central Bankers, could print untethered currency to their heart’s content – and have! It took Federal Legislators & Presidents a few years to fully realize they were no longer accountable to the People for ‘Sound Money’, but they caught on quickly enough – in an era of Legislative Bill ‘Riders’ – to do serious damage to the national Treasury. Federal Debt has spiraled uncontrollably upward ever since. A return to backing US currency with Gold & other precious metals will help quickly dispatch this Inflation Racket. President Richard Nixon’s Executive Order of 15 August 1971 – the policy instrument authorizing fiat money – can be cancelled to commence the process of returning to Sound Money.

The following chart will water the eyes of any thinking American – the more so because it’s already out of date – the US Federal Debt now stands at nearly $20,000,000,000,000 (trillions):

US Federal Debt $20 Trillion

The American Public is paying a staggering $440 Billion in annual interest – just to service the US National Debt.

Who receives this interest? The few members of the Federal Reserve – a private entity. See chart below.

$440 Billion Annual Interest Paid On US $20 Trillion Debt (Aggregated Monthly Over Fiscal Year)

US Entitlements & Debt Interest in the next 15 years, completely crowd out the primary function of the Federal government – Defense of the Nation. Repeat, there will be no money for Defense.

Why would a nation do that to itself?

On the chart below – at the intersection of Revenue & Debt – lay the next American Revolution.

US Entitlements & Interest On Debt Consumes Entire Federal Budget

U.S. Adds Fewest Jobs This Year As Labor Market Cools

October 7, 2022/in Budget and Finance, DrRichSwier.com, Economy, Elections, Taxes /by DrRichSwier.com

By The Daily Caller

The U.S. labor market cooled once again in September, adding the fewest jobs this calendar year, according to a Friday morning report from the Bureau of Labor Statistics (BLS), fueling investor hopes that the Federal Reserve might reduce the intensity of its anti-inflation campaign.

The U.S. added 263,000 jobs in August, slightly higher than investor expectations, a meaningful drop from August’s addition of 315,000, and half the 528,000 added in July, according to the BLS. The unemployment rate edged down to 3.5% in September, from 3.7% in August, with 5.8 million Americans currently unemployed, beating investor expectations.

The decline in job growth is another sign that the red-hot labor market is beginning to cool after job openings plunged 10% to 10 million in September from 11.1 million in August, according to a Tuesday BLS report. This slowdown is likely to be welcomed by investors, who hope that loosening labor conditions might prompt the Federal Reserve to reduce the intensity of its anti-inflation campaign, according to CNBC.

BofA: Clients are asking if we foresee an imminent shift from the Fed “given other central banks’ actions and the sharp risk asset moves. We think these concerns are misplaced and that the Fed’s job is still far from over. The Fed will keep hiking until the labor market cracks.”

— Nick Timiraos (@NickTimiraos) October 6, 2022

Members of the Federal Open Market Committee, the Fed group that sets its policy on interest rates, have been consistent in their messaging that high interest rates and elevated levels of inflation are expected to last at least another several months. The battle against inflation is still “in the early days,” said President Raphael Bostic of the Federal Reserve Bank of Atlanta, according to CNBC.

Wages grew by 5% over the past 12 months in September without accounting for inflation, according to the BLS. In August, wages were up 5.2% over the previous 12 months, without accounting for inflation, but once inflation and a reduction in the average hours worked were considered, earnings actually decreased by 2.8% in August, according to the Bureau of Labor Statistics.

“Despite the stronger wage growth due to the tightness of the labor market, a majority of workers are finding their wages falling even further behind inflation,” Fed researchers wrote in a Tuesday report on wage growth published by the Federal Reserve Bank of Dallas on Tuesday.

A small minority of workers saw significant real wage growth, while the proportion of workers who saw wages decline fell slightly from pandemic-era highs to 53.4%, the highest rate since 2011, the Fed researchers reported. Amongst those that saw wages decline, the median decline was 8.6%, far greater than the typical range of a 5.7% to 6.8% decline seen in the past 25 years.

Earnings data for September is due on Sept. 13, alongside inflation data in the Consumer Price Index (CPI), a measure of the inflation faced by typical urban households in the U.S.

AUTHOR

JOHN HUGH DEMASTRI

Contributor.

RELATED ARTICLE: Wages Took Their Worst Hit In 25 Years: REPORT

RELATED TWEET:

Remember when the U.S. was energy independent, the border was secure, gas was $2 a gallon, and the world wasn’t on the brink of nuclear armageddon?

— Michael Seifert (@realmichaelseif) October 7, 2022

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

U.S. State GDPs Compared to Entire Countries

October 7, 2022/in Budget and Finance, DrRichSwier.com, Economy, Elections, Politics /by DrRichSwier.com

By Foundation for Economic Education (FEE)

It’s pretty difficult to even comprehend how ridiculously large the US economy is.

Click here to view the U.S. State GDPs Compared to Entire Countries map.

The map above (click to view and enlarge) matches the economic output (Gross Domestic Product) for each US state (and the District of Columbia) in 2018 to a foreign country with a comparable nominal GDP last year, using data from the BEA for GDP by US state (average of Q2 and Q3 state GDP, since Q4 data aren’t yet available) and data for GDP by country from the International Monetary Fund. Like in past years, for each US state (and the District of Columbia), I’ve identified the country closest in economic size in 2018 (measured by nominal GDP) and those matching countries are displayed in the map above and in the table below. Obviously, in some cases, the closest match was a country that produced slightly more, or slightly less, economic output in 2018 than a given US state.

It’s pretty difficult to even comprehend how ridiculously large the US economy is, and the map above helps put America’s Gross Domestic Product (GDP) of $20.5 trillion ($20,500,000,000,000) in 2018 into perspective by comparing the economic size (GDP) of individual US states to other country’s entire national output. For example:

America’s largest state economy is California, which produced nearly $3 trillion of economic output in 2018, more than the United Kingdom’s GDP last year of $2.8 trillion. Consider this: California has a labor force of 19.6 million compared to the labor force in the UK of 34 million (World Bank data here). Amazingly, it required a labor force 75% larger (and 14.5 million more people) in the UK to produce the same economic output last year as California! That’s a testament to the superior, world-class productivity of the American worker. Further, California as a separate country would have been the 5th largest economy in the world last year, ahead of the UK ($2.81 trillion), France ($2.79 trillion) and India ($2.61 trillion).
America’s second largest state economy—Texas—produced nearly $1.8 trillion of economic output in 2018, which would have ranked the Lone Star State as the world’s 10th largest economy last year. GDP in Texas was slightly higher than Canada’s GDP last year of $1.73 trillion. However, to produce about the same amount of economic output as Texas required a labor force in Canada (20.1 million) that was nearly 50% larger than the labor force in the state of Texas (13.9 million). That is, it required a labor force of 6.2 million more workers in Canada to produce roughly the same output as Texas last year. Another example of the world-class productivity of the American workforce.
America’s third largest state economy—New York with a GDP in 2018 of $1.68 trillion—produced slightly more economic output last year than South Korea ($1.65 trillion). As a separate country, New York would have ranked as the world’s 11th largest economy last year, ahead of No. 12 South Korea, No. 13 Russia ($1.57 trillion) and No. 14 Spain ($1.43 trillion). Amazingly, it required a labor force in South Korea of 28 million that was nearly three times larger than New York’s (9.7 million) to produce roughly the same amount of economic output last year! More evidence of the world-class productivity of American workers.
Other comparisons: Florida (about $1 trillion) produced almost the same amount of GDP in 2018 as Mexico ($1.19 trillion), even though Florida’s labor force of 10.2 million less than 20% of the size of Mexico’s workforce of 59 million.
Even with all of its oil wealth, Saudi Arabia’s GDP in 2018 at $683 billion was below the GDP of US states like Pennsylvania ($793 billion) and Illinois ($863 billion).

Overall, the US produced 24.3% of world GDP in 2017, with only about 4.3% of the world’s population. Four of America’s states (California, Texas, New York and Florida) produced more than $1 trillion in output and as separate countries would have ranked in the world’s top 16 largest economies last year. Together, those four US states produced nearly $7.5 trillion in economic output last year, and as a separate country would have ranked as the world’s third-largest economy.

Adjusted for the size of the workforce, there might not be any country in the world that produces as much output per worker as the US, thanks to the world-class productivity of the American workforce. The map above and the statistics summarized here help remind us of the enormity of the economic powerhouse we live and work in.

So let’s not lose sight of how ridiculously large and powerful the US economy is, and how much wealth, output, and prosperity is being created every day in the largest economic engine there has ever been in human history. This comparison is also a reminder that it was largely free markets, free trade, and capitalism that propelled the US from a minor British colony in the 1700s into a global economic superpower and the world’s largest economy, with individual US states producing the equivalent economic output of entire countries.

This article is reprinted with permission from The American Enterprise Institute.

AUTHOR

Mark J. Perry

Mark J. Perry is a scholar at the American Enterprise Institute and a professor of economics and finance at the University of Michigan’s Flint campus.

The Biden Administration Just [Quietly] Scaled Back Student Loan ‘Cancellation’

October 4, 2022/in Budget and Finance, DrRichSwier.com, Education, Elections, Politics, Taxes /by DrRichSwier.com

By Foundation for Economic Education (FEE)

Student debt forgiveness is unjust, highly regressive, and inflationary. It should be scrapped, not scaled back.

In August, the White House announced that most federal student loan borrowers would be eligible for forgiveness. Most borrowers who didn’t receive a Pell Grant would be eligible for up to $10,000 of forgiveness, while borrowers who did receive a Pell Grant—a type of financial aid for low-income undergrads—would be eligible for up to $20,000.

In what NPR describes as a “remarkable reversal,” the US Department of Education last week “quietly changed its guidance around who qualifies” for student debt forgiveness under President Biden’s controversial executive order.

“At the center of the change are borrowers who took out federal student loans many years ago, both Perkins loans and Federal Family Education Loans. FFEL loans, issued and managed by private banks but guaranteed by the federal government, were once the mainstay of the federal student loan program until the FFEL program ended in 2010.

Today, according to federal data, more than 4 million borrowers still have commercially-held FFEL loans. Until Thursday, the department’s own website advised these borrowers that they could consolidate these loans into federal Direct Loans and thereby qualify for relief under Biden’s debt cancellation program.

On Thursday, though, the department quietly changed that language. The guidance now says, ‘As of Sept. 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans.’”

NPR adds that the change could affect as many 1.5 million borrowers, noting that it’s “unclear why the department reversed” course.

While the Department of Education is mum on the sudden change, National Review suggests it may be a legal maneuver to strengthen the constitutionality of Biden’s executive order, which was recently challenged by attorneys general in Iowa, Kansas, Nebraska, Missouri, South Carolina, and Arkansas, which filed a federal lawsuit alleging that Biden’s unilateral order was unconstitutional.

The Pacific Legal Foundation has also filed suit, contending “that student-loan borrowers in states like Indiana, Wisconsin, Minnesota, Arkansas, and North Carolina would be unfairly taxed for the student-loan ‘forgiveness’ under President Joe Biden’s program.”

‘Sometimes the Law Defends Plunder’

Few people, I suspect, could explain the difference between an FFEL loan or a Perkins Loan (I certainly couldn’t). But many rightfully question the constitutionality of the president of the United States unilaterally “canceling” with the stroke of a pen hundreds of billions of dollars in student loans, all of which will have to be paid by taxpayers who did not take out the loan or receive the service.

While I’ll leave the constitutional question to legal scholars, it’s clear student debt forgiveness is unjust, highly regressive, and inflationary.

1. Inflationary

Lawrence Summers, an economist who served in both the Clinton and Obama administrations, made it clear that Biden’s order would have inflationary consequences.

“Student loan debt relief is spending that raises demand and increases inflation,” Summers argued. “It consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college. It will also tend to be inflationary by raising tuitions.”

While many will point out that government shouldn’t be “helping” those who didn’t attend college anymore than those who did, his observation that forgiveness will cause tuition prices to rise is spot on.

2. Regressive

Second, even the Washington Post concedes that Biden’s plan is “a regressive, expensive mistake.” How regressive?

As Politico points out, a recent study by economists Constantine Yannelis and Sylvain Catherine “concludes that blanket forgiveness of $10,000 in debt would offer $3.60 to the highest-earning 10 percent of households for every $1 it gave to the bottom 10 percent and that three quarters of the benefits would flow to households with above-median incomes.”

3. Unjust

Finally, some may argue that student debt forgiveness is unjust because it’s regressive. While they have a point, debt forgiveness would be unjust even if it was not regressive. As Brad Polumo recently wrote for FEE, loan forgiveness is a textbook example of what the nineteenth century economist Frédéric Bastiat described as “legal plunder.”

Polumbo explained that it’s no coincidence that Biden’s loan bailout was rolled out right before midterm elections in November, describing it as a “calculated attempt” to reward his voting base at the expense of the public treasury. This, Bastiat explained, is legal plunder.

“See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong,” Bastiat wrote in The Law. “See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”

Bastiat warned that “sometimes the law defends plunder and participates in it.” Looting might be legal when the government does it; but it’s never moral, regardless of how many votes it buys or who the beneficiaries are.

Why the Biden administration is “scaling back” its student loan forgiveness order is anyone’s guess. What’s clear is that it should not just be scaled back; it should be scrapped.

This article was adapted from an issue of the FEE Daily email newsletter. Click here to sign up and get free-market news and analysis like this in your inbox every weekday.

AUTHOR

Jon Miltimore

Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune. Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times.

IRS Sent Out Over $1 Billion In Child Tax Credit Payments To The Wrong People

September 28, 2022/in Budget and Finance, DrRichSwier.com, Elections, Politics, Taxes /by DrRichSwier.com

By The Daily Caller

The Internal Revenue Service (IRS) sent over $1.1 billion in child tax credit payments to incorrect recipients during the COVID-19 pandemic, according to an audit by the Department of the Treasury’s Inspector General (IG) for Tax Administration on Tuesday.

The IRS sent the payments to 1.5 million people between July and November of 2021 during the pandemic, according to the audit. Additionally, the IG noted that 4.1 million taxpayers did not receive payments they should have, amounting to $3.7 billion withheld.

The incorrect payments were made to recipients whose dependent children, required to claim the credit, did not meet the age requirements (i.e., under 18 years old), were deceased, or had been claimed on another filer’s return. These were a small proportion of the 178.9 million child tax credit payments made during the period, totaling $76.7 billion.

Additionally, the report noted that the IRS incorrectly sent out 6,829 reconciliation letters to taxpayers who received the credit, a document required to prepare their 2021 tax returns. Some taxpayers never received the letter, while others received letters with incorrect amounts.

The report further noted that the IRS erroneously changed 1,610 taxpayers’ bank account information used to receive direct deposits of the credit.

The payments were made under provisions of the American Rescue Plan Act, President Joe Biden’s main legislative response to the pandemic. The Act increased the annual amount of the tax credit by $1,000 to $1,600 per child, while, significantly, making the credit fully refundable and eligible to be claimed in advance by up to 50%.

This week, I met with @RevDrBarber and 50 clergy members and they had a simple point: Congress must keep working to pass voting rights legislation and bring back the expanded child tax credit. pic.twitter.com/ZpOfMNAuam

— Rep. Ro Khanna (@RepRoKhanna) September 24, 2022

Child tax credit payments were just one of Biden’s efforts to give taxpayers cash at a time when precautionary lockdowns were still in place in many states, along with the Paycheck Protection Program for businesses and stimulus checks for individuals. These programs were widely criticized by Republicans, who claimed that they would increase both the federal budget deficit and inflation, resulting in the Act receiving no GOP House support.

Ever since the Act’s passage, Republicans in Congress have used instances of incorrect payments, and amounts unspent, to criticize the Biden administration.

“We have cataloged numerous examples of ridiculous waste of federal tax dollars from the American Rescue Plan,” said Republican Rep. Jason Smith of Missouri, the ranking member of the House Budget Committee, during a hearing in June.

The Daily Caller News Foundation has reached out to the IRS for comment.

AUTHOR

ARJUN SINGH

Contributor.

The On-Going Plot to Reduce Global Population

September 28, 2022/in Budget and Finance, Courts & Law, DrRichSwier.com, Economy, Elections, National Security, Politics, Regulation, Science /by DrRichSwier.com

By J.W. Bryan

According to Kelleigh Nelson’s News with Views article of March 22, 2022, “The Homicidal Killing Fields of America’s Medical System,” her extensive research confirms that what we are currently experiencing has been in the planning stage for at least two decades.

Its purpose was to establish a crisis, through fear, by which the public mindset would accept the existence of a pandemic that would completely endanger our health globally, and provide the excuse for destroying all current law. However, there is much evidence that what was chosen (a virus – COVID-19) to initiate the outset of the “pandemic,” very possibly doesn’t even exist.

The reason I use the word, “possibly” is because I can’t positively confirm all existing intelligence. However, the best I have found is contained in an article by Jon Rappoport, published in the Peoplesvoice.org, on January 29, 2021.

According to Rappoport, “There is no Covid pandemic.” He points out that the whole notion that Covid-19 is one health condition is a lie. COVID is not one thing.

He states that this the most difficult and yet the simplest point to accept and understand and that we shouldn’t reject the existence of the virus and then say, “So what is the cause of people dying?” His response to that is, there is no ONE CAUSE. There is no one illness. There is no “it.”

The article continues…Rappoport states that none of the “COVID deaths” in the entire world require the existence of a new virus. For instance, in Wuhan, where the whole business began, the first COVID cases of pneumonia occurred in a city whose air is heavily polluted. In China, every year, roughly 300,000 people die from pneumonia. That means millions of cases. None of these deaths need to be explained by invoking a new virus.

He continues, “Add to this the fact that the PCR test for the virus is irreparably flawed and useless.” (For a variety of reasons, I have explained in other articles.) The test spits out false positives like a fire hose. Thus, the high case numbers. The authorities have to go to such extremes to paint a picture of a spreading viral epidemic…in order to plant fear and thus compliance in the citizenry. However, there is no evidence that an actual germ is traveling around the world felling people. The ‘evidence’ is invented.

The” pandemic” is invented.

The fraud is promoted.

And, if you think there are other major reasons to explain “why all these people are dying,” keep in mind that “lung” conditions are an expanded category worldwide. For instance, there are about one billion cases of flu-like illnesses every year on planet earth. Repackaging/relabeling just a small percentage of those cases alone would account for all official COVID death numbers.

But we have known for some time that the “Agenda” for world government has been planning, for three or four decades, something comparable to what we are experiencing currently. The so-called “pandemic,” which is fueled by something called COVID-19, very probably doesn’t exist except in propaganda and in the minds of the people.

According to Kelleigh Nelson’s News with Views article of February 8, 2020, “Mass Murder by a medical System that has Lost its Direction and Soul” she states that the AMA, CDC, FDA, NIH protocols for treatment of patients with COVID have saved no patients; they have purposely murdered hundreds of thousands, perhaps millions, who could have been saved. She makes a point, “That the dissident doctors, scientists and healthcare workers know that there are repurposed drugs (inexpensive and available) that could have saved up to 86% of those who perished.”

Following is a list of comments relative to the above.

“People were dying, (yet) all my ideas were getting shouted down. My superiors were showing up (to my clinical meetings) and getting me to stand down, because I was entertaining the idea that we should do this, that and the other thing, and they didn’t want anything to be done.” – Dr. Pierre Kory

“This is a war on cheap repurposed drugs.” – Dr. Paul Marik before testifying on NH bill that would make ivermectin available OTC in NH.

“I never thought I’d see the day where doctors are censored, and patients are kept from care.” – Dr. Peter McCullough.

As we have observed, practically all hospitals are in lockstep with everything that is being carried out by the forces behind this so-called pandemic. We know this is true because of the evidence given by dissident doctors, scientists, healthcare workers and parents or families of patients who failed to survive their hospital stay. The hospital protocols were used to further their goal of diminishing the global population.

Also, the hospitals are given monetary incentives by the government to label all illnesses as Covid. This, of course, results in the enhancement of the number of C-19 cases reported daily across the country and figures into the national mind set of the acceptance of existence of a “pandemic.”

Additionally, the hospitals are given bonuses for deaths from “COVID” or listed as COVID, but nothing for those who survive. So, we can imagine what the incentive leads to, hundreds of thousands of dollars.

A Case in Point

This brings me to an ordeal experienced by Beth, my wife’s niece, whose son Jonathon, was in a hospital with “COVID.” She kept a daily journal of her son’s progress, which to all appearances, even though he was on an ECMO (extracorporeal membrane oxygenation) Machine, was daily improving. He was able to participate in physical therapy and occupational therapy. She had videos confirming this.

All this transpired over a period of about three months. Toward the end, she was told that they might have to remove the ECMO machine to be used with patients who had been vaccinated, which her son had not. Later, when this came about, it resulted in him having trouble breathing, in fact, he was gasping for breath. For this they began giving him shots to stop the gasping.

She was informed by the staff that this was why the shots were being administered, to which she replied that “she didn’t want him to be gasping for breath,” because she wanted him to at least have the opportunity to try to live. In the response, the doctor said, “If he gets this miracle, it doesn’t matter what I do.” But when the gasping stopped – after the 4^th injection he was dead.

So, now comes the aftermath.

Beth is tough, both mentally and emotionally. But she’s been through a lot recently. She lost both parents in a short period of time, then came the loss of her son. It’s been a lot of heartbreak and stress. At the very outset, upon arriving at the hospital she requested that he be given ivermectin, hydroxychloroquine (HCQ), or other repurposed drugs, but of course, that didn’t happen. Since the repurposed drugs were denied, what do you think he was given instead? It very well could have been Paxlovid which is worthless, or Remdesivir, which, according to reports, is very expensive as well as deadly.

I’ve talked with her three times to prepare to give an account of all this in order to present to others. She is convinced that her son was murdered, even though the hospital staff was only obeying the protocols handed down by the insiders at the top, you know who they are…the AMA, CDC, NIH, FDA etc.

We could say that the hospital staff only takes on the alter ego of the hospital, which also takes on the alter ego of all the powers at the top. They follow what they’re told to do in order to keep their jobs, even if they know what they’re doing is not normal or right. Never mind the fact that the ECMO machine was taken from her son and given to a vaxed patient and would not help the vaxxed patient to survive. It is probable that the reason the other patient was in the hospital was due to the COVID injections. In this case, as in others, the hospital wouldn’t help them survive, even if it was possible, as they receive no monetary benefits for those who survive.

The amount of evidence is endless that the vaccine was designed purposely to either kill or seriously injure. The obvious outcome is the depopulation of America and the entire world.

All this plays into the agenda of the great reset by the invisible government which is the Council on Foreign Relations (CFR). All the components of it, the United Nations, the Democratic Party, The World Economic Forum (WEF), and the socialist sleepers who have infiltrated the Republican Party, and many others are having their day, but it will be short lived. Just when they believe they have everything under complete control and everything nailed down so that nothing can stop them, something is going to play into the Lord’s time-table which will result in their total destruction.

A few years prior to that something will have played into His plans that brought about that blessed day when the Lord himself, will have descended from heaven and with a shout, “With the voice of the archangel, and with the trump of God, and the dead in Christ shall rise first.”

“Then, we who are alive and remain shall be caught up together with them in the clouds, to meet the Lord in the air and so shall we ever be with the Lord.”

And this is the day that Beth will be looking forward to with total assurance that a joyful occasion will transpire when she is reunited with her son, Jonathon.

Conclusion

Beth isn’t the only one who is experiencing this; we know that there are many thousands, maybe even millions, who are going through much heartbreak as a result of the protocols being ordered by the medical authorities and the federal government to continue this façade of a pandemic using fear to control the masses.

And it will get worse. So, we need to prepare for whatever comes, and the only way I know that we can do it is to grow stronger in our faith and dependance upon God to see us through all the travails that are forthcoming.

Please, share this article with as many as possible. The time is close at hand.

Constitutional Crisis: Biden’s Student Loan Handout Could Cost $400 Billion, Congressional Budget Office Reports

September 28, 2022/in Budget and Finance, DrRichSwier.com, Economy, Education, Politics, Taxes /by DrRichSwier.com

By The Geller Report

UPDATE: ‘FLAGRANTLY ILLEGAL’: Lawsuit Filed to Stop Biden’s Student Debt Cancellation

As Americans drown in Democrat incurred debt, they are ramping up more trillion dollar debt. President Biden’s move to cancel up to $10,000 in student loans for privileged borrowers (at the expense of the working class) — and up to $20,000 for others — will cost more than $400 billion, according to the nonpartisan Congressional Budget Office (CBO)

“By suddenly adding so-called student loan “forgiveness” to the November elections, President Joe Biden has used politics to paper over the constitutional crisis he precipitated. Under the Constitution, paying off federally insured student loans would be a presidential usurpation not only of the legislative power but also the appropriations power, the taxing power, and the “debting” power.”

Fox News: President Biden’s move to cancel up to $10,000 in student loans for many borrowers — and up to $20,000 for others — will cost more than $400 billion, according to the nonpartisan Congressional Budget Office (CBO). The CRFB also included in its estimate about $120 billion in costs to taxpayers from another element of the Biden’s executive order on “income-driven repayment,” which the CBO said it excluded. (Fox News). CBS News: The cost of the debt-forgiveness plan has sparked a debate among some Republicans and those without college degrees, who have argued that the plan isn’t fair to people who didn’t go to college but yet whose tax dollars will support the effort. After the report was issued, Republicans decried the plan’s price tag, citing the CBO’s forecast, with Rep. Andy Biggs of Arizona writing on Twitter that it was “even more expensive than we initially thought.” Even so, the CBO’s estimate is lower than an earlier forecast from the University of Pennsylvania’s Penn Wharton Budget Model, which pegged the cost at $519 billion (CBS News). National Review: More than 60 percent of Americans would oppose President Biden’s student loan “forgiveness” if it were to raise taxes, according to a new poll by the Cato Institute (National Review).

AUTHOR

Pamela Geller

RELATED TWEETS:

President Trump on Oct. 20, 2020: If Joe Biden gets elected, ‘the stock market will crash.’

The market has lost $7.6 trillion since Biden took office.

— Lance Gooden (@Lancegooden) September 26, 2022

Biden’s economy:

Market cap of stocks ⬇️ over $7.6 trillion

Household income ⬇️ $7,200

Dow Jones is ⬇️ 20.02% YTD

NASDAQ is ⬇️ 30.95%

S&P 500 is ⬇️ 23.31%

Elections have consequences.

— Charlie Kirk (@charliekirk11) September 26, 2022

RELATED ARTICLES:

Americans Spent More on Taxes in 2021 Than on Food, Clothing and Health Care Combined

Can Congress Sue Biden Over The Student Loan Constitutional Crisis He Created?

Explosions Reported On Nord Stream Pipelines As Massive Gas Leaks into Baltic Sea

2022 Now The Worst Year in the History of U.S. Stock Market

September 27, 2022/in Budget and Finance, DrRichSwier.com, Economy, Elections, Politics, Taxes /by DrRichSwier.com

By The Geller Report

Stock futures are falling. On Friday, U.S. stocks ended in the red, with the Dow Industrials closing down 1.6% and all major indexes posting weekly losses.

On Monday, the British pound hit its lowest-ever level against the U.S. dollar and was sharply lower against the euro. Yields on benchmark U.K. bonds have jumped to fresh multiyear highs.

Fox News: The stock market’s value is down $7.6 trillion since Biden took office. pic.twitter.com/043vh1jVxX

— RNC Research (@RNCResearch) September 26, 2022

AUTHOR

Pamela Geller

A large group of criminals ransacked a WaWa store tonight in Philadelphia pic.twitter.com/bviiexZJR2

— Libs of TikTok (@libsoftiktok) September 25, 2022

RELATED ARTICLES:

‘If He’s Elected, The Stock Market Will Crash’: Trump’s 2020 Warning About Biden Comes True

BIDEN ECONOMY: Housing Market is in a Recession

Russian President Putin Grants Russian citizenship to US Whistleblower Ed Snowden

Economic Freedom Plummets in the U.S. During Biden Rule, New Ranking Shows

September 24, 2022/in Budget and Finance, DrRichSwier.com, Economy, Elections, Politics, Taxes /by DrRichSwier.com

By The Geller Report

Economic freedom in the U.S. drops to its lowest point in four decades.

The Democrats hate you and wish to destroy every good thing, every joy this fine country had to offer. The daily social fabric of our lives is disintegrating at whiplash-inducing speed.

Get out and vote in November. We must overwhelm the tallies to thwart these election fraud criminals.

Economic freedom in the US has declined significantly, new ranking shows

By: Eric Cervone, The Blaze, September 18, 2022:

The United States is significantly less free economically than it was a year ago, according to the Canada-based think tank Fraser Institute.

Each year, the Fraser Institute releases a report entitled “Economic Freedom of the World,” a ranking of countries around the world by economic freedom. This year’s ranking uses data from 2020 to order countries from most free to least free. The ranking is calculated using numerous factors, including size of government, respect for property rights, freedom to trade, monetary policy, and regulation.

“When you talk about economic freedom, you’re talking about people being free to trade with others, compete in markets, and keep what they earn,” said Florida State University economics professor James Gwartney, who co-authored the report. “Economic freedom is about people being free to mold and shape their own lives.”

The United States slots in at 7^th place, down one spot from last year. But the U.S.’s score dropped more significantly, down from 8.25 to 7.97 on the index’s 10-point scale. The reason why America lost only one spot in the rankings is because economic freedom around the world fell in 2020, according to the Fraser Institute. The report shows that the average economic freedom rating fell to 6.84 in 2020, down from 7.00 in 2019, “erasing about a decade’s worth of improvement in economic freedom in the world,” the report states. However, average economic freedom is still up compared to 2000.

Keep reading….

AUTHOR

Pamela Geller

RELATED ARTICLES:

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Fearing Fed, Stocks Tumble And Major Investor Slashes Expectations

September 23, 2022/in Budget and Finance, DrRichSwier.com, Economy, Elections, Politics, Taxes /by DrRichSwier.com

By The Daily Caller

All three major U.S. stock indices fell Friday morning as investors worried that the Federal Reserve’s ongoing campaign of aggressive interest rate hikes would weaken the economy.

With Friday poised to be the fourth day in a row of slumping stocks, the Dow Jones Industrial average fell by 1.36%, the S&P 500 by 1.7% and the Nasdaq Composite fell by 2%, according to CNBC. Investors’ fears followed a late Thursday announcement by Goldman Sachs analysts, who slashed their year-end expectations for the S&P 500 by 16%, according to Reuters.

“Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable and their focus is on the timing, magnitude and duration of a potential recession and investment strategies for that outlook,” David Kostin, an analyst at Goldman, wrote in the note, according to Reuters.

This follows a Goldman Sachs note released earlier this week, which warned that the Fed was unlikely to relent from its pace of interest rate hikes, even in the event of a so-called “soft landing” where inflation is managed without inducing a recession. Fed Chair Jerome Powell has been clear that the agency will continue rate hikes until inflation is brought under control, and is well on its way to the Fed’s target of 2% annually.

Another gap lower on the open and extension lower for the Dow Jones Industrial Average. We may not avoid the technical ‘bear market’ designation (close below 29,562 as a -20% loss from ATH) much longer. Red line is 200-week SMA. #DOW pic.twitter.com/SJ6fggfab2

— John Kicklighter (@JohnKicklighter) September 23, 2022

Goldman’s earlier note predicted that the Fed would continue raising rates at least through the end of the year, with a 0.75% interest rate hike in November and a 0.5% interest rate hike in December. Central banks around the world, even some that previously had negative interest rates, have been aggressively pursuing rate hikes as inflation hammers economies worldwide, according to The Wall Street Journal.

AUTHOR

JOHN HUGH DEMASTRI

Contributor.

RELATED TWEET:

We’re in a recession and the media barely talks about it.

— Rep. Jim Jordan (@Jim_Jordan) September 23, 2022

Key Inflation Indicator Remains Sky-High In Another Worrying Sign For Businesses

September 14, 2022/in Budget and Finance, DrRichSwier.com, Economy, Elections, Politics, Regulation, Taxes /by DrRichSwier.com

By The Daily Caller

The prices faced by producers rose by 8.7% year-on-year in August as inflation continues to challenge businesses, according to the Bureau of Labor Statistics (BLS).

While down from the near-record highs of 11.3% in June, the current price increases were over 4 times the typical rates — between 1 and 3% annually — seen in 2019 and 2020, according to data from the Bureau of Labor Statistics’ Producer Price Index (PPI), which measures the prices suppliers charge businesses and other customers. These elevated rates mirror Tuesday’s Consumer Price Index (CPI), which pegged inflation at 8.3%, according to the BLS.

The progress that comes with the Inflation Reduction Act was declared a failure before it was a success.

But we didn’t give up. We had a vision, a plan, and we stuck to it.

And the result is we’re getting the job done for the American people.

— President Biden (@POTUS) September 13, 2022

A significant component of the decrease was accounted for by a 5.2% decline in energy costs, according to the BLS. Mirroring July’s results, the index for foods and all goods less food and energy rose by 0.1% and 0.2%, respectively.

The index for all products other than foods, energy and trade services rose by 5.6% year-over-year, less than the 5.8% posted in July, according to the BLS. The price for unprocessed goods was still incredibly elevated, at 36.1%, more than July’s value of 30.4%, as a spike in the price of natural gas kept prices up.

The Biden administration has been taking a victory lap on economic conditions, with Treasury Secretary Janet Yellen claiming the economy had undergone one of the fastest recoveries in modern history. President Joe Biden claimed that the passage of the Inflation Reduction Act had helped to combat inflation “at the kitchen table,” in a Tuesday speech at the White House.

Simultaneously, the BLS’ monthly CPI report placed inflation at 8.3%, and found that food prices had increased 13.5% annually. Rent and electricity were also up, 6.7% and 15.8% respectively.

Increased rent prices have put pressure on families in particular, with the average cost of a single family rental home up about 13.4% this year, according to CNBC. At a median cost of $2,495 per month, families who might otherwise save to purchase a house are being priced out of home ownership, CNBC reported.

Gas prices also remained incredibly elevated, despite having fallen 12.2% month-on-month, and were still up 25.6% compared to the same time last year, the BLS reported.

AUTHOR

JOHN HUGH DEMASTRI

Contributor.

8 Ideas That Will Teach You to Think Like an Economist

July 25, 2022/in Budget and Finance, DrRichSwier.com, Economy, Elections, Politics /by DrRichSwier.com

By Foundation for Economic Education (FEE)

Sound economic thinking is vital for a prosperous future.

Economics is the study of human action—the choices people make in a world of scarcity. Scarcity means that people have unlimited wants but we live in a world of limited resources. Because of this fact people have to make choices, and choices imply trade-offs. The choices people make are influenced by the incentives they face and those incentives are shaped by the institutions—rules of the game—under which people live and interact with others.

The Foundation for Economic Education has published some excellent essays on the economic way of thinking and basic concepts (“The Economic Way of Thinking” by Ronald Nash and “Economics for the Citizen” by Walter E. Williams).

In this essay, I will explain eight ideas and give examples of the economic way of thinking.

1. TANSTAAFL: Know the Difference Between Price and Cost

We often hear how wonderful certain countries are because they provide “free healthcare” or “free education.” Many will also say “I got it for free” because they didn’t pay with money.

The error lies in not understanding the difference between price and cost. For example, people usually say, “The Starbucks latte cost me five dollars” or, “The movie ticket cost me fifteen dollars.” Cost in economics means what you give up or sacrifice. In these examples, the prices were $5 and $15. But the cost of the latte was perhaps the sandwich one could have purchased instead with that same $5, and the cost of the movie was perhaps the three lattes one could have purchased instead with that same $15.

Labeling healthcare and education “free” is not just wrong—”there’s no such thing as a free lunch”—it’s also misleading. As my former professor Walter E. Williams would say, “Unless you believe in Santa Claus or the Tooth Fairy, the money has to come from somewhere.” You might not get a medical bill in those countries but you have more taken out of your paycheck (i.e., taxes) and you might have to wait much longer to get that test or have that “minor” (from the bureaucrats’ perspective) surgery. You pay with either money or time, but either way, you pay! Taxes are also used to pay for public schools, which is yet another example of how people call something “free” when it is not.

There’s a difference between zero price and zero cost. There could be a zero price ($0), but there’s never a zero cost. Therefore, don’t swear anymore by using the “F” word!

2. Actions Matter More Than Statements

“Actions speak louder than words,” is a well-known idiom. Humans act, and the act of choice tells us something. Consider this example: A person walks into an Apple store and sees the price of the latest iPhone and angrily mumbles, “What a rip off” but still proceeds to purchase that phone.

When one does something voluntarily, it demonstrates their true preference at the time. Assuming that individuals are self-interested and will ex ante (looking forward in time) subjectively weigh the cost and benefit of an action, and, also assuming it’s not a right to have the private property of another (i.e., Apple’s iPhone), then when a person walks into an Apple store and buys the new iPhone, the individual obviously expects to be better off in some way at that moment. To say that Apple “took advantage” of the willing customer would be nonsense since Apple, or any private business, cannot force people to buy their product. It’s one thing to say something, but the proof is in the act of choice.

3. Sunk Cost Fallacy: Don’t Cry Over Spilt Milk

“Don’t cry over spilt milk” means what’s done is done. The only costs that should come into our decision-making are future opportunity costs. Past costs are “sunk.” The typical example to explain the sunk cost fallacy is the movie example. You spend $15 to see a movie and an hour into this three-hour movie you realize that it’s horrible and will only get worse. However, your feeling is that you should stay and get your money’s worth. That is bad economic thinking. The $15 is gone so don’t lose the next two hours of your valuable time—get up and leave.

Most of us know people who were (are) in a horrible relationship or dating the wrong type of person (perhaps this applies to you). But the feeling of “I’ve already spent two years of my life with this person” can lead to a bad decision. Many end up marrying the person in order to justify the investment of time.

No offense to Beyoncé, but if you like yourself, then perhaps don’t let that person “put a ring on it”! Don’t lose the next two years of precious time. It’s better to be single than in a bad relationship (but that’s for another essay).

4. Tradeoffs: Learn to Think at the Margin

The optimal or efficient level of pollution is not zero. The optimal number of traffic deaths or sports injuries also is probably not zero. The optimal number of people getting a virus is not zero. The optimal level of safety is not perfect safety. Does this sound strange or harsh? Well, if you want to do a cross country road trip and not walk or ride a bike, or if you want to enjoy playing or watching sports, and if you want to physically interact with others, then it is clear that the optimal level of pollution, deaths, injuries, and people getting a virus is actually greater than zero. The optimal level of safety is less than perfect safety. Nothing is free including more safety—trade-offs are always involved because there is always an opportunity cost when we do something, even things like travel, play sports, or interact with others.

Incremental decision-making is what economists call thinking at the margin. Marginal means the one additional or extra unit. Every time we make a decision it’s as if we are calculating the marginal benefit (the benefit of one more unit) and the marginal cost (what would be given up to acquire one more unit) of the action. The economic way of thinking says something should be done until the marginal benefit (MB) equals the marginal cost (MC). There’s also a concept known as the law of diminishing marginal utility—each additional unit gives less and less utility or benefit.

We want clean air so that our eyes aren’t irritated when we go outside and our lungs don’t burn when we take a breath. However, if the desire is perfectly clean air this would mean no more cars, no planes, no boats or ships, and no trains (some would actually desire this situation, at least theoretically). This would impose tremendous costs on society.

Let’s look at it another way. If I snapped my fingers and made the Pacific Ocean perfectly clean but then put one drop of oil somewhere in the ocean unbeknownst to everyone else, would it be worth it to spend money, time and other resources to hunt down that one drop of oil? The marginal benefit of finding and removing one drop of oil in the quintillions of gallons of water would be less than the marginal cost. In plain English, it’s not worth it. Again, the optimal level of pollution is some, not zero.

When it comes to studying, practicing a sport or musical instrument, or dating someone before marrying them, you might think, “The more time, the better.” I am a literal person so if I told my students, “The more you study the better,” this would mean they would never eat, drink, sleep, or spend time with family and friends. But common sense says that after studying for a certain amount of time most students will say, “I get it” or simply “time to move on.” Why waste more time studying?

Also, if you are in a place in your life where you are considering marriage, then the point of dating is to acquire information about the other person so that you can make a good decision. Ultimately, you come to a point where you have enough information to propose, accept a proposal, or break up with this person. When I proposed to my wife, I did not have perfect information about her, but my information was good enough. Sure, one more month of dating would have given me some marginal benefit in terms of additional information about her, but I came to a point where I had enough information—where MB=MC.

“Good enough is good enough” is what economists mean by doing something until the marginal benefit equals the marginal cost. The MB=MC rule implies that the “more is better” thinking is not optimal. One aspirin from the bottle can help your headache but it’s dangerous to think, “Well, if one is good, the whole bottle is better.” Yes, your headache will be gone but so will you.

5. Comparative Advantage: Ability to Do Something Does Not Mean One Should

In a standard economics class, students are taught absolute advantage and comparative advantage. The former means being able to produce more than another with the same amount of resources or using fewer resources to produce an output. The latter means being able to do something at a lower opportunity cost than another.

Because there’s always an opportunity cost when doing something, sometimes it is advantageous to pay someone else to do something even if we have the knowledge and skills to do it ourselves. This also has applications to trade policy. Just because the United States (actually individuals in the United States) can produce certain products does not mean we should. It’s ok if not everything we buy says “Made in USA” because if the government tries to “protect American jobs” and begins imposing tariffs and quotas, we are not actually saving American jobs. It’s more correct to say we are saving particular jobs at the expense of other American jobs. Of course, good politics and good economics often go in different directions.

6. Supply and Demand: Understand How Prices Work

The complaint that businesses can charge “whatever they want” is nonsense. For example, why is it that movie theaters only charge $8 for popcorn and not $8,000 or $8,000,000 if they can supposedly charge whatever they want? There are two sides to a market transaction, and it’s this interaction of sellers and buyers that determines the price. What’s interesting is that many times the same people complaining are the ones making noise eating that popcorn during the movie.

7. Fixed Pie Fallacy: Voluntary Exchange Is Win-Win That Creates a Bigger Pie

Entrepreneurs become wealthy if they create a product or service that provides value for a large number of people. Unless the entrepreneurs received special privileges from the government, they didn’t forcibly take money from their customers.

The anger directed at “the rich” is based on the fallacy of thinking the economy is a fixed-size pie. In other words, those who criticize the “filthy rich” believe that they took a piece that was too big, leaving less pie for the rest of us regular folks. The reality is that these entrepreneurs baked a bigger pie. They benefited, but so did we!

In a business transaction, exchanges are voluntary, and voluntary trade is a win-win situation. The entrepreneur wins (as well as the employees he or she hires) and the customers win.

8. Good Intentions Fallacy: Don’t Forget about Unseen Costs

Intentions and results are not always the same thing. The economic way of thinking teaches us to consider possible unintended consequences of our own actions or the actions of politicians. Just because something sounds good or feels right does not mean a certain goal will be achieved. In fact, the very problem that is being addressed can become worse.

Sound economic thinking also removes one’s blinders. The effects of a policy on all groups are considered, not just one group. This helps individuals to see through politicians’ claims that a policy will save American jobs when in reality only some special-interest group will benefit at the expense of other Americans. When politicians confiscate money (i.e., taxes) to build sports stadiums using the “it will create jobs” argument, the mistake is to focus on the jobs seen and neglecting the unseen—the opportunity cost of those tax dollars.

Conclusion

There is so much more to say about this subject called economics and there are many more examples of the economic way of thinking that I could have included. Some characterize economics as applied common sense; yet, economics also gives us counterintuitive insights.

This is the power and beauty of economics

AUTHOR

Ninos P. Malek

Ninos P. Malek is an Economics professor at De Anza College in Cupertino, California and a Lecturer at San Jose State University in San Jose, California. He teaches principles of macroeconomics, principles of microeconomics, economics of social issues, and intermediate microeconomics. His previous experience also includes teaching introductory economics at George Mason University.

Charging an All Electric Car Uses 4 Times the Electricity of a Home Air Conditioner

July 23, 2022/in Budget and Finance, DrRichSwier.com, Energy, Environment, Politics, Science /by DrRichSwier.com

By Dr. Rich Swier

Watch as Congressman Thomas Massie (R-KY) puts Biden’s Secretary of Transportation Pete Buttigieg on the spot during a hearing on the cost to charge all electric vehicles on Tuesday, July 18th, 2022.

Congressman Massie states, “Numbers are important. It would take four times as much electricity to charge the average household’s cars as the average household uses on air conditioning. Do you think that could be — so, if we reach the goal by 2030 that Biden has of — of 50 percent adoption instead of 100 percent adoption, that means the average household would use twice as much electricity charging one of their cars as they would use for all of the air conditioning that they use for the entire year.”

In a December 21st, 2021 column titled Electric Cars vs. Gas Cars: Is the Conventional Wisdom Wrong? Bill Wirtz reported,

Electric vehicle batteries need a multitude of resources to be manufactured. In the case of cobalt, the World Economic Forum has called out the extraction conditions in the Democratic Republic of the Congo, where more than half of the world’s cobalt comes from. Miners as young as seven years are suffering from chronic lung disease from exposure to cobalt dust. Not only does battery manufacturing account for 60 percent of the world’s cobalt use, but there are also no good solutions to replace it, which is something Elon Musk is struggling with.

This does not even address the extraction procedures, complications, ethical conditions, and emissions produced by the need for aluminum, manganese, nickel, graphite, and lithium carbonate.

With a European market estimated to reach a total of 1,200 gigawatt-hours per year, which is enough for 80 gigafactories with an average capacity of 15 gigawatt-hours per year, that need is set to increase exponentially.

The renowned German research institute IFO declared the eco-balance of diesel-powered vehicles to be superior to electric vehicles in a study released in April.

In an April 7th, 2022 column titled The Environmental Downside of Electric Vehicles Michael Heberling reported,

An electric vehicle requires six times the mineral inputs of a comparable internal combustion engine vehicle, according to the International Energy Agency.

At one time, “Saving the Environment” and “Fighting Climate Change” were synonymous. That is no longer true. The quest for Clean Energy through electric vehicles (EVs) epitomizes “the end justifies the means.”

According to the International Energy Agency (IEA), an electric vehicle requires six times the mineral inputs of a comparable internal combustion engine vehicle (ICE). EV batteries are very heavy and are made with some exotic, expensive, toxic, and flammable materials.

The primary metals in EV batteries include Nickel, Lithium, Cobalt, Copper and Rare Earth metals (Neodymium and Dysprosium). The mining of these materials, their use in manufacturing and their ultimate disposal all present significant environmental challenges. Ninety percent of the ICE lead-acid batteries are recycled while only five percent of the EV lithium-ion batteries are.

The Bottom Line

All electric vehicles (EVs) are costly to manufacture, use exotic, expensive, toxic, and flammable materials, harm the environment and harm those children working in the mines in the Democratic Republic of the Congo, where more than half of the world’s cobalt comes from.

Now we learn that Biden’s Secretary of Transportation Pete Buttigieg has not idea what it costs the ordinary American family to own, charge and maintain EVs. If you purchase a Tesla is will cost $45 for their outlet, and an estimated installation cost of between $750-$1500.

You see it’s not about the environment, saving the planet from climate change or what is best for the American family.

It’s all about their green agenda and its ideology. The ends justifying their nefarious means!

The American consumer be damned.

Data Show California Is a Living Example of the Good Intentions Fallacy

July 20, 2022/in Budget and Finance, DrRichSwier.com, Elections, Politics /by DrRichSwier.com

By Foundation for Economic Education (FEE)

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

During a speech at Harvard several years ago, Charlie Munger related a story about a surgeon who removed “bushel baskets full of normal gallbladders” from patients. The doctor was eventually removed, but much later than he should have been.

Munger, the vice chairman of Berkshire Hathaway, wondered what motivated the doctor, so he asked a surgeon who participated in the removal of the physician.

“He thought that the gallbladder was the source of all medical evil, and if you really love your patients, you couldn’t get that organ out rapidly enough,” the physician explained.

The doctor was not motivated by profit or sadism; he very much believed he was doing right.

The Righteousness Fallacy

The anecdote is a perfect illustration of the righteousness fallacy, which Barry Brownstein noted is rampant in modern politics and a key driver of democratic socialism.

The Righteousness Fallacy (also known as the fallacy of good intentions) is described by author Dr. Bo Bennett as the idea that one is correct because their intentions are pure.

It recently occurred to me that California is a perfect example of this fallacy. Consider these three facts about the Golden State:

California spends about $98.5 billion annually on welfare—the most in the US—but has the highest poverty rate in America.
California has the highest income tax rate in the US, at 13.3 percent, but the fourth greatest income inequality of the 50 states.
California has one of the most regulated housing markets in America, yet it has the highest homeless population in American and ranks 49th (per capita) in housing supply.

The Danger of Favoring Intent over Result

That politicians would persist with harmful policies should come as little surprise. The Nobel Prize-winning economist Milton Friedman once observed the uncanny proclivity of politicians “to judge policies and programs by their intentions rather than their results.”

In his book Capitalism and Freedom, Friedman described the danger of such thinking.

[The threat comes] … from men of good intentions and good will who wish to reform us. Impatient with the slowness of persuasion and example to achieve the great social changes they envision, they’re anxious to use the power of the state to achieve their ends and confident in their ability to do so. Yet… Concentrated power is not rendered harmless by the good intentions of those who create it.

I don’t doubt that California lawmakers, like the physician who was removing healthy gall bladders, believe they are doing the right thing. Yet they, like the physician, need to wake up to reality and realize they aren’t making people better.

AUTHOR

Jon Miltimore

VIDEO: Ten Minute Lesson on the Nature of Money

July 13, 2022/in Budget and Finance, DrRichSwier.com, Economy, Politics, Taxes /by DrRichSwier.com

By Vlad Tepes Blog

I was sent this by a gentleman who has a financial magazine read by some of the top people in finance. This is not my field and am uncomfortable even thinking about it in some ways. But I am reliably informed by a few people now, that there is truth in this world view, and profundity. In fact, this is not the usual video about how things work or what to invest in, so much is its an attempt to explain an entire world view about how money is created and destroyed, what wealth is, and so on. I plan to watch it a few more times and hopefully develop an understanding that gives me some predictive ability.

To the extent that I get it now, it doesn’t necessarily change much. It still appears that we are moving from a more or less credit driven free market system into what might be a more controlled feudal system. I dunno. Hopefully this offers insight. Looking forward to the comments on this.

EDITORS NOTE: This Vlad Tepes Blog column by Eeyore is republished with permission.

U.S. Devotes $195 Mil to ‘Redress the Legacy of Harm’ in Racist Transportation Infrastructure

July 12, 2022/in Budget and Finance, DrRichSwier.com, Featured, Politics, Taxes /by DrRichSwier.com

By Judicial Watch

In the Biden administration’s latest racial equity project, American taxpayers will spend $195 million to help connect minority communities that are cut off from economic opportunities by racist transportation infrastructure. The costly plan is known as Reconnecting Communities Pilot (RCP) and it is part of the Department of Transportation’s (DOT) “Equity Strategy Goal to reduce inequities” across the nation’s transportation systems and the communities they effect. In its announcement, the DOT writes that “preference will be given to applications from economically disadvantaged communities, especially those with projects that are focused on equity and environmental justice, have strong community engagement and stewardship, and a commitment to shared prosperity and equitable development.” The language sounds like material found in a communist manifesto.

DOT Secretary Pete Buttigieg justifies the investment by explaining that “transportation can connect us to jobs, services, and loved ones, but we‘ve also seen countless cases around the country where a piece of infrastructure cuts off a neighborhood or a community because of how it was built.” RCP is the first-ever initiative funded by the federal government that is completely dedicated to unifying neighborhoods living with the impacts of infrastructure that divides them, Buttigieg adds. It will help reconnect communities that are cut off from economic opportunities by what the administration seems to claim is a racist transportation infrastructure. In fact, the lengthy grant announcement states that the multi-million-dollar community reconnection program “seeks to redress the legacy of harm caused by transportation infrastructure.” The “harm” includes barriers to opportunity, displacement, damage to the environment and public health, limited access and “other hardships,” according to the document.

In pursuit of redressing the legacy of harm, RCP “will support and engage economically disadvantaged communities to increase affordable, accessible, and multimodal access to daily destinations like jobs, healthcare, grocery stores, schools, places of worship, recreation, and park space,” the administration writes in the grant announcement. Thus, the new program will be implemented in line with a multitude of other federal initiatives launched by a 2021 Biden executive order to advance racial equity and support for underserved communities through the federal government. Besides the DOT’s Equity Action Plan, the agency grant document identifies them as federal actions to address environmental justice in minority and low-income populations, affordable housing in the nation’s most desirable neighborhoods and a program to strengthen the economy through the creation of good-paying jobs with the free and fair choice to join a union, strong labor standards, and workforce programs. There are many more that were left out of the RCP document.

In the last year, key federal agencies have implemented racial equity plans as per Biden’s order. The Department of Justice (DOJ) created a special initiative to advance equity for marginalized and underserved communities. The Department of Labor (DOL) dedicated $260 million to promote “equitable access” to government unemployment benefits by addressing disparities in the administration and delivery of money by race ethnicity and language proficiency. The Treasury Department named its first ever racial equity chief, a veteran La Raza official who spent a decade at the nation’s most influential open borders group. The Department of Defense (DOD) is using outrageous anti-bias materials that indoctrinate troops with anti-American and racially inflammatory training on diversity topics. The U. S. Department of Agriculture (USDA) created an equity commission to address longstanding inequities in agriculture. The nation’s medical research agency has a special minority health and health disparities division that recently issued a study declaring COVID-19 exacerbated preexisting resentment against racial/ethnic minorities and marginalized communities. The Transportation Security Administration (TSA) recently hired a Chief Diversity and Inclusion Officer even though most of its employees come from “underrepresented racial and ethnic groups.” Just a few days ago Judicial Watch reported that the administration is spending $6 million to advance racial equity in the government’s food-stamp program that already serves a large minority population.

How Gen Z Is Stepping Into Financial Independence

May 30, 2022/in Budget and Finance, DrRichSwier.com, Economy, Science /by DrRichSwier.com

By Foundation for Economic Education (FEE)

Gen Z is one of the most well-educated generations, but they also face a unique set of challenges.

Recent financial literacy surveys have found that Generation Z adults (people aged 18-25) are more financially educated than any previous generation. Today, over half of Gen Z already invests in some form. 26% of those who are invested put their money into the stock market.

But this doesn’t mean there isn’t more for Gen Z to learn. Of the group that invests in the stock market, only 1 in 4 thinks they could explain how it works to a friend. The financial concepts most familiar to Gen Z are how spending and saving work.

The key takeaway is that Gen Z knows a lot about finance, but they lack education depth. By addressing educational gaps, Gen Z, and anyone else, can boost their understanding of finance and secure their way towards financial independence.

How Gen Z is stepping into financial independence

Gen Z is a series of juxtapositions when it comes to finances. Most of them are off to a good start, but others face shortfalls in their financial understanding. Importantly, many Gen Zers know that they need to learn more. But many who understand basic principles are intimidated by more complex and sophisticated investing principles. Finally, Gen Z is one of the most well-educated generations. Unfortunately, they are also saddled with huge amounts of student loan debt to get by while studying.

Finding their financial footing

As Gen Z enters the workforce, a recent survey by Investopedia polling 4,000 U.S. adults looked at the financial knowledge of various generations. Just under half of Gen Zers feel confident about their financial literacy. Gen Z has the lowest confidence in financial knowledge among Gen Zers, Millennials, Gen Xers, and Baby Boomers.

Lowest Financial Confidence in Generations

It’s perhaps surprising that Gen Z has such low confidence in their financial literacy despite how much information is available today. Whether it’s in the classroom or online via platforms like TikTok and Instagram, Gen Z has a seemingly endless stream of knowledge at its fingertips.

But a recent survey conducted by Greenlight Financial Technology found that while members of Gen Z have a strong interest in personal finance, they also desire more financial education and subsequently lack the confidence to properly handle their finances.

Spending and saving, which seems to be Gen Z’s strong points, have been attributed to them watching their parents struggle, particularly throughout the Great Recession.

All In on Investing

Even if they aren’t totally confident, Gen Z is big on investing. 54% of Gen Z holds investments of some kind, whether stocks, cryptocurrency, or non-fungible tokens (NFTs).

Importantly, investing occurs across a wide range of demographics within Gen Z. 48% of Gen Z women hold investments, with the number being higher for Gen Z men (60%).

An area that does divide Gen Zers is income. Of those that earn less than $50,000 a year, only 45% are investing. By comparison, 73% of those making more than $50,000 have put their money into financial instruments.

Like Millennials, the most popular areas of investing for Gen Z are new financial technologies, like crypto.

1/4 Gen Z, Millennials and Gen X Use Crypto

Crypto has become an increasingly popular investing tool as younger generations become skeptical of traditional investing. Some of their concerns revolve around how the government always seems to just print more money whenever the economy cools down. Both Gen Z and Millennials invest in crypto and stocks at similar rates, with around 1 in 4 investing in crypto.

Men tend to own cryptocurrencies and NFTs at nearly double the rate of women. However, these financial instruments can be particularly vulnerable to fluctuations. One way to prevent taking on too much risk can be to spread out the purchase of your assets into other more stable and reliable investments.

Social Media Powered Learning

Gen Z relies on technology to stay educated. YouTube and other videos are the preferred learning methods; only teachers rank higher as a source of learning.

Millennials, the generation closest to Gen Z, have similar habits, with internet searches being their top method for learning about financial information. Unlike Millennials, Gen Z also utilizes TikTok at a huge rate to get more financial information.

Importantly across generations, friends/family were the number two source of financial information. The only generation that departed were Boomers, who considered friends/family their number one source of finance-related information.

However, there are still gaps in Gen Z’s financial knowledge. Gen Z tends to struggle when it comes to credit and debt management. Understanding your credit score is important, particularly when it comes to how your credit score impacts car insurance and other areas.

Gaps Become Concerns

According to surveys, Gen Z is particularly worried about paying their taxes. In fact, paying taxes, managing debt, and borrowing money are the biggest areas of concern for Gen Z. During the pandemic, Gen Z faced huge struggles—39% said they lost their jobs, were furloughed, or faced a temporary layoff. As a result, stories about the Great Recession and the fallout from the Covid-19 pandemic have left Gen Z particularly concerned about their financial health and well-being. One other concern Gen Z faces is the present inflationary bubble.

Taxes

Interest in taxes for Gen Z seems to be driven by income. 37% of those who made less than $50,000 cited “how to do my taxes” as the number one skill they’d like to learn vs. 31% for those who made more than $50,000.

Debt

Debt is another area of huge concern for Gen Z. During 2020, Millennials and Gen Z saw the greatest debt growth. Again, income played a direct role, with those making more than $50,000 being less concerned about debt than those who made under $50,000. One particular area of concern is student loans. Being incredibly well-educated means that Gen Z has also taken on larger student loan debt. Consider using a tool to calculate how to refinance your student loans to lower your monthly payments.

What Does Gen Z Need?

Gen Z excels in many different areas. The key for them is to continue taking control of their finances by self-educating. However, self-education isn’t enough. Gen Zers that want to make the most out of their finances also must adopt a mindset of personal responsibility and self-empowerment.

That means understanding how to live within your means, evaluating your spending and savings habits, and making any changes to put yourself on secure financial footing even if that means making sacrifices or delaying desirable purchases.

AUTHOR

Sam Bocetta

Sam Bocetta is a retired defense contractor for the U.S. Navy, freelance journalist and part-time cybersecurity coordinator at AssignYourWriter. He specializes in finding solutions to seemingly-impossible ballistics engineering problems. Sam writes independently for a handful of security publications, reporting on trends in international trade, InfoSec, cryptography, cyberwarfare, and cyberdefense.

Food Banks Straining to Meet Demand Show the Real Human Cost of Progressive Policies

May 7, 2022/in Budget and Finance, Commentary, DrRichSwier.com, Elections, Politics /by DrRichSwier.com

By Foundation for Economic Education (FEE)

Families are seeing the pinch at home, but so too are the charities that pick up the grocery bill for those who can’t make ends meet.

Thanks to inflation, Americans increasingly cannot afford their grocery bills. Global food prices are projected to increase 23 percent this year, on top of the 30 percent they increased last year. And per usual, those already living on the margins are feeling the consequences the most.

Food banks are struggling to keep up with the increased demand they’re experiencing. Families are seeing the pinch at home, but so too are the charities that pick up the grocery bill for those who can’t make ends meet. Many are struggling to keep up with the increased demand on top of the increased cost of food.

Forgotten Harvest, which serves the metro Detroit area, said demand increased 25 to 45 percent since December. According to the Labor Department’s Consumer Price Index, grocery bills increased by 10 percent in March compared to the year before while restaurant charges went up by 6.9 percent.

Furthermore, Feeding America, one of the nation’s largest charities working to prevent hunger with over 200 food banks and 60,000 food pantries, reported 85 percent of their food banks saw increased demand for food assistance.

Tim Fetsch, the chief operating officer of the St. Louis Area Foodbank, which provides nearly 400,000 meals per year, told the Wall Street Journal, “We have had to work harder to secure the food needed to support the community.” He went on to explain that his organization is grappling with supply chain issues, increased transportation costs, and the increase in food prices. And he pointed out that while retail stores used to donate heavily to their program, they too are facing many of the same challenges.

For its part, Feeding America has begun purchasing its food for the first time to make up for the loss in donations. However, their President and Chief Operating Officer Katie Fitzgerald indicated that might not be a permanent solution, telling the Journal, “We’re still trying to purchase that food, but now it’s costing us 40 percent more.”

Predictable and Predicted

How do you say “we told you so” in progressive?

Since the beginning of the pandemic, the left has mocked those of us who said the response to the coronavirus might be worse than the disease itself. We were called grandma killers, selfish, idiots. (Never mind the fact that Democratic governors actually killed grandmas by sending infected patients back into nursing homes.)

But every step along the way we have been horribly right.

In March of 2020, we at FEE.org published a headline that read, “Panic Has Led to Government ‘Cures’ That Are Worse than the Disease, History Shows.”

While the New York Times called for more stimulus spending, Tyler Goodspeed (a Fellow at the Adam Smith Institute) wrote in The Hill, “Back to ’70s inflation? How Biden’s spending spree will hurt your wallet.” That was in July of 2021. The Washington Post was advocating lockdowns even as recently as this past December writing, “Lockdowns can be necessary to slow the spread of the coronavirus.” Meanwhile, my colleague at FEE.org has been presciently pointing to the unscientific nature of such claims—reporting all the way back in May of 2020, “Sweden’s Top Infectious Disease Expert Says COVID-19 Lockdowns Are Not Based on Science. History Shows He Could Be Right.”

It’s been like watching a car crash in slow motion while being unable to intervene and stop it.

The response to the coronavirus was worse than the disease, which has a less than 1 percent death rate for the vast majority of people, and for which a vaccine was quickly developed.

There are myriad repercussions we can point to that stemmed from lockdowns and stimulus spending: increases in domestic abuse, loss of education, an increase in poverty, staggering inflation, increases in hunger. The list goes on.

All of these repercussions were predictable and predicted by many who understand the tendency of central planning to generate adverse unintended consequences. Kids can’t just make up for years of learning lost. Trapping people in their homes can be dangerous when their living situation is unstable. Shutting down the economy was always going to lead to supply chain disruptions and shortages, while printing trillions of dollars is bound to lead to inflation.

Our government decided to be truly detached from economic reality and pursue both lockdowns and money printing—meaning you had a huge increase in dollars chasing a decreased number of goods. That’s the specific recipe for high inflation and anyone who didn’t say that all along should probably revisit basic economics.

And lastly, it was clear all along we would see an increase in poverty and hunger as a result of pushing people out of work, limiting the supply chain, and creating high inflation. All of this goes hand-in-hand.

Progressive Policies Hurt the Poor the Most

This is yet another example of how the left’s policies hurt the very people they claim to stand for the most. It’s good to care about the poor, but we can’t help them if we don’t understand the economic factors that actually lead to prosperity. A bleeding heart paired with an economically illiterate mind never lifted anyone out of poverty.

Regrettably, those who were already on the margins in our society are being pummeled by the reckless policies of progressives. And let’s be clear, there were plenty of Republicans in the progressive camp as well. Many supported stimulus spending and even lockdowns. Trump himself and many of his supporters even tried to have Representative Thomas Massie (R, KY) kicked out of the GOP when he stood against stimulus spending in 2020.

But saying “I told you so” doesn’t feel good when there are real lives on the line. This story is a heartbreaking one that represents countless children and parents going to bed hungry tonight.

As economist Murray Rothbard once said, “It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

Those who waged economic war on the American people over the last two years need to stand down and let entrepreneurs and workers rebuild our ravaged economy.

AUTHOR

Hannah Cox

Hannah Cox is the Content Manager and Brand Ambassador for the Foundation for Economic Education.

‘Sometimes the Law Defends Plunder’

1. Inflationary

2. Regressive

3. Unjust

A Case in Point

Conclusion

1. TANSTAAFL: Know the Difference Between Price and Cost

2. Actions Matter More Than Statements

3. Sunk Cost Fallacy: Don’t Cry Over Spilt Milk

4. Tradeoffs: Learn to Think at the Margin

5. Comparative Advantage: Ability to Do Something Does Not Mean One Should

6. Supply and Demand: Understand How Prices Work

7. Fixed Pie Fallacy: Voluntary Exchange Is Win-Win That Creates a Bigger Pie

8. Good Intentions Fallacy: Don’t Forget about Unseen Costs

Conclusion

The Bottom Line

The Righteousness Fallacy

The Danger of Favoring Intent over Result

How Gen Z is stepping into financial independence

Finding their financial footing

Lowest Financial Confidence in Generations

All In on Investing

1/4 Gen Z, Millennials and Gen X Use Crypto

Social Media Powered Learning

Gaps Become Concerns

Taxes

Debt

What Does Gen Z Need?

Predictable and Predicted

Progressive Policies Hurt the Poor the Most

STAY INFORMED