There are times for closed-door meetings. Crafting tax reform, a key portion of the Trump agenda, does not qualify as one of those times. If the President wants to pass meaningful tax reform in his first term (and potentially before the midterm elections), he should force the “Big Six” to meet with the Freedom Caucus and conservative members of Senate. Otherwise, tax reform will quickly shift from being a slam-dunk piece of legislation into a major failure for the administration and GOP Congress.
For complete transparency, I don’t trust the Big Six: Paul Ryan, Kevin Brady, Mitch McConnell, Orrin Hatch, Steven Mnuchin, and Gary Cohn. They are all major promoters of big-government policies. Putting tax reform in their hands is like asking fast-food restaurant managers to craft a healthy diet plan. Tax reform needs wholesome fruits and vegetables. The Big Six love serving Big Macs and milkshakes.
For even more transparency, I’m a Federalist which means I don’t fully trust any members of the Democratic-Republican establishment in DC, but at least the House Freedom Caucus and a handful of Senators have demonstrated a willingness to embrace fiscal responsibility. Until my party has people in office, we’re going to have to rely on Mark Meadows, Mike Lee, and their conservative cohorts.
True tax reform requires rethinking the revenue system itself. The federal government relies too heavily on taxes to fund their pet projects. Thankfully, the solution is to build a surplus by doing two things: encouraging economic growth through tax cuts across the board and dramatically reducing the budget. The first portion should be a no-brainer, though talks of expanding revenues through other measures should concern us. Regardless of how they skew the ways dollars change hands, invariably it will be Americans who pay. Tariffs, BATs, VATs… they all find ways to pull money from American businesses and/or taxpayers.
It’s the second portion of meaningful tax reform that makes me most worried about the Big Six. Reducing costs and eliminating waste are actions that run contrary to everything these six men have demonstrated in their careers. Sure, they’ve all talked about cutting costs during election time or in board meetings, but they’ve never actually done it.
For tax reform to be both meaningful and successful, the President needs fiscal conservatives to have a seat at the table. This joint effort between the White House, Congress, and the Senate is an exercise in futility if these six men are the only ones involved. They will only do what’s necessary to keep their jobs, not what is required to fix the fragile financial situation the nation and its people currently faces For the Big Six, keeping their jobs means passing something, anything, so the President can sign it before the 2018 or 2020 election. That should terrify every American because it means their incentive has nothing to do with “meaningful” or “successful.” The reason they’ve been so hesitant to even meet with the Freedom Caucus is because they realize their plan doesn’t represent fiscal responsibility. It will include tax cuts designed for votes rather than the impact on the economy. When votes are on the line, you cut from the biggest base – middle class America – and make it up by increasing taxes on businesses and the wealthy.
To most, this probably doesn’t seem like a bad idea. Unfortunately, the benefits of tax cuts for the middle class will be insignificant compared to the economic carnage associated with the rest of their “reforms.” Increased tax burdens on businesses mean loss of jobs, cuts in productivity, and increases in prices. That’s just scratching the surface on the problems associated with those types of “reforms.”
Everything we’ve heard so far from these six men can be pieced together to demonstrate a populist and in some cases leftist plan that will only be meaningful for votes, not fixing the economy or saving money for Americans. We need eyeballs on the legislation and voices in the room while it’s being crafted. Today, those voices belong to the Freedom Caucus and Senate conservatives.
Put them in the room, Mr. President. You’re the legendary businessman. You should recognize the need for tax reform and budget cuts that will bring us to a better economic place. If you leave it up to the Big Six, the result will not be what you want.
Then again, maybe that’s exactly what the President wants.
Fed survey cites rising concerns about trade tariffs
WASHINGTON (AP) — The Federal Reserve said Wednesday that the U.S. economy was growing in the fall, but there were concerns about higher tariffs from a widening trade war, rising interest rates and tight labor markets.
In its latest report on economic conditions around the country, the Fed said that most of its 12 regions saw moderate growth through late November. Dallas and Philadelphia said growth had slowed, while St. Louis and Kansas City depicted growth as slight.
The report, known as the beige book, found that optimism about the future had waned somewhat, with business contacts citing “increased uncertainty.”
The survey will used at the Fed’s next meeting on Dec. 18-19. The central bank is widely expected to boost its benchmark rate for a fourth time this year at that meeting.
The beige book report noted problems the higher tariffs from Trump’s get-tough approach to trade were causing: rising costs for manufacturers, weaker sales at companies and farmers hurt by retaliatory tariffs imposed by China and other nations.
Even with the tariff concerns, the beige book said most districts continued to report moderate growth in manufacturing.
The impact of rising interest rates affected interest-rate sensitive sectors such as housing, with the beige book noting that new home construction and sales of existing homes were either holding steady or experiencing slight declines.
The Fed survey said that labor markets had tightened further across a broad range of occupations.
“Over half of the districts cited firms for which employment, production and sometimes capacity expansion had been constrained by an inability to attract and retain qualified workers,” the report said.
Unemployment fell in October to a 49-year low of 3.7 percent with economists forecasting further declines in the coming months. A key reason the Fed has been raising interest rates is to slow the economy to ensure that tight labor markets don’t unleash unwanted inflation pressures.
With labor markets already so tight, the Fed said that many districts were seeing examples of firms enhancing their nonwage benefits, including health benefits, profit-sharing, bonuses and paid vacation days.
Despite the wage pressures, the report said that prices continued to increase at a modest pace in most districts although reports of tariff-inducted cost increases have spread more broadly in such areas as manufacturing, retailing and restaurants.
White House intensifies confusion and fear on US-China deal
WASHINGTON (AP) — The Trump administration raised doubts Tuesday about the substance of a U.S.-China trade cease-fire, contributing to a broad stock market plunge and intensifying fears of a global economic slowdown.
Investors had initially welcomed the truce that the administration said was reached over the weekend in Argentina between Presidents Donald Trump and Xi Jinping — and sent stocks up Monday. But on Tuesday, after a series of confusing and conflicting words from Trump and some senior officials, stocks tumbled, with the Dow Jones shedding about 800 points, or 3.1 percent.
White House aides have struggled to explain the details of what the two countries actually agreed on. And China has not confirmed that it made most of the concessions that the Trump administration has claimed.
“The sense is that there’s less and less agreement between the two sides about what actually took place,” said Willie Delwiche, an investment strategist at Baird. “There was a rally in the expectation that something had happened. The problem is that something turned out to be nothing.”
Other concerns contributed to the stock sell-off, including falling long-term bond yields. Those lower rates suggested that investors expect the U.S. economy to slow, along with global growth, and possibly fall into recession in the coming year or two.
John Williams, president of the Federal Reserve Bank of New York, also unnerved investors by telling reporters Tuesday that he supports further Fed rate hikes. His remarks renewed fears that the Fed may miscalculate and raise rates so high or so fast as to depress growth.
The disarray surrounding the China deal coincides with a global economy that faces other challenges: Britain is struggling to negotiate its exit from the European Union. Italy’s government is seeking to spend and borrow more, which could elevate interest rates and stifle growth.
And in the United States, home sales have fallen sharply in the past year as mortgage rates have jumped.
Trump and White House aides have promoted the apparent U.S.-China agreement in Buenos Aires as a historic breakthrough that would ease trade tensions and potentially reduce tariffs. They announced that China had agreed to buy many more American products and to negotiate over the administration’s assertions that Beijing steals American technology. But by Tuesday morning, Trump was renewing his tariff threats in a series of tweets.
“President Xi and I want this deal to happen, and it probably will,” Trump tweeted. “But if not remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so.”
Trump added that a 90-day timetable for negotiators to reach a deeper agreement had begun and that his aides would see “whether or not a REAL deal with China is actually possible.”
He revisited the issue later Tuesday with a tweet that said: “We are either going to have a REAL DEAL with China, or no deal at all – at which point we will be charging major Tariffs against Chinese product being shipped into the United States. Ultimately, I believe, we will be making a deal – either now or into the future. China does not want Tariffs!”
The president’s words had the effect of making the weekend agreement, already a vague and uncertain one, seem even less likely to produce a long-lasting trade accord.
“We expect the relationship between the world’s two largest economies to remain contentious,” Moody’s Investors Service said in a report. “Narrow agreements and modest concessions in their ongoing trade dispute will not bridge the wide gulf in their respective economic, political and strategic interests.”
Among the conflicting assertions that White House officials made was over whether China had actually agreed to drop its 40 percent tariffs on U.S. autos.
In addition, Treasury Secretary Steven Mnuchin said Tuesday on the Fox Business Network that China agreed to buy $1.2 trillion of U.S. products. But Mnuchin added, “If that’s real” — thereby raising some doubt — it would close the U.S. trade deficit with China, and “We have to have a negotiated agreement and have this on paper.”
Many economists have expressed skepticism that very much could be achieved to bridge the vast disagreements between the two countries in just 90 days.
“The actual amount of concrete progress made at this meeting appears to have been quite limited,” Alec Phillips and other economists at Goldman Sachs wrote in a research note.
During the talks in Buenos Aires, Trump agreed to delay a scheduled escalation in U.S. tariffs on many Chinese goods, from 10 percent to 25 percent, that had been set to take effect Jan. 1. Instead, the two sides are to negotiate over U.S. complaints about China’s trade practices, notably that it has used predatory tactics to try to achieve supremacy in technology. These practices, according to the administration and outside analysts, include stealing intellectual property and forcing companies to turn over technology to gain access to China’s market.
In return for the postponement in the higher U.S. tariffs, the White House said China had agreed to step up its purchases of U.S. farm, energy and industrial goods. Most economists noted that the two countries remain far apart on the sharpest areas of disagreement, which include Beijing’s subsidies for strategic Chinese industries, in addition to forced technology transfers and intellectual property theft.
Chief economic adviser Larry Kudlow acknowledged those challenges in remarks Tuesday morning.
“China’s discussed these things with the U.S. many times down through the years and the results have not been very good,” he said. “So this time around, as I said, I’m hopeful, we’re covering more ground than ever … So we’ll see.”
Complicating the challenge, Trump’s complaints strike at the heart of the Communist Party’s state-led economic model and its plans to elevate China to political and cultural leadership by creating global champions in robotics and other fields.
“It’s impossible for China to cancel its industry policies or major industry and technology development plans,” said economist Cui Fan of the University of International Business and Economics in Beijing.
Trump had tweeted Sunday that China agreed to “reduce and remove” its 40 percent tariff on cars imported from the U.S. Mnuchin said Monday that there was a “specific agreement” on the auto tariffs.
Yet Kudlow said later that there was no “specific agreement” regarding auto trade, though he added, “We expect those tariffs to go to zero.”
Associated Press writer Joe McDonald in Beijing contributed to this report.
Medicare-for-All would cost more than every penny we’ve spent on defense in the country’s history
Math is hard for many Americans. It isn’t just the sad state of our public school system that keeps the people down. It’s politicians like Bernie Sanders and Alexandria Ocasio-Cortez who push lies and pipe dreams that keep many Americans thinking the government has unlimited money and there’s no real difference between millions, billions, and trillions.
There’s a big difference, of course, but leftists will never let the number of zeroes get in the way of promoting their ideological goals. As I posted earlier, even left-leaning news outlets like the Washington Post are calling out Ocasio-Cortez for her false statements about Medicare-for-All.
Ocasio-Cortez must have realized when she Tweeted the article that there’s no way “66% of Medicare for All could have been funded already by the Pentagon.” She was certainly playing down to her base in hopes they’d ignore reality and embrace her false notions just because she said it. The Tweet was either a bald-faced lie or she’s an absolute moron. Or both.
Washington Post, which normally supports socialist initiatives recommended by their Democratic puppetmasters, had to call this particular claim out. They gave the claim “4 Pinocchios,” a designation they save for some of the most egregious lies in politics.
It isn’t just about being completely wrong on the Pentagon’s accounting errors. This goes deeper. While fact-checking her claims, PolitiFact decided to do some math of their own. They gathered defense spending data as far back as they could – 1940 – and tallied the totals. Those who understand the difference between millions, billions, and trillions probably won’t be surprised to learn the total spent in that time is under $18 trillion, well short of the $21 trillion Ocasio-Cortez claimed she could have used to pay 2/3 of Medicare-for-All.
The also stipulated that since defense spending was much lower in the past, it’s very likely the total spent since the nation’s inception still couldn’t hit Ocasio-Cortez’ number.
One tip-off is the amount of Ocasio-Cortez’s “accounting errors” is far bigger than the actual Pentagon spending from 1998 to 2015, which was $8.5 trillion. In fact, it’s also far bigger than the amount the government has spent on national security since 1940 and, in all likelihood, in the nation’s history.
Here’s a chart we assembled showing national-security spending by the federal government from 1940 to today. Ocasio-Cortez’s $21 trillion estimate exceeds the entirety of national-security spending since 1940, which checks in around $17.8 trillion. And while full data back to 1776 doesn’t exist, prorating backwards for another 164 years would almost certainly not add enough to make the total $21 trillion.
Medicare-for-All is projected to cost $32 trillion over its first 10 years alone.
Bernie Sanders, Alexandria Ocasio-Cortez, and all their mathematically challenged supporters need to hear this information now. If you could somehow take back every dollar spent on defense from the time the nation was formed until today, it still wouldn’t be enough to pay for Medicare-for-All. This isn’t a right-wing conspiracy. This is left-leaning Politifact crunching the numbers.
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