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Economy

GOP August recess: A time for lies, damned lies, and tax reform

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Believe it or not, we are only one week away from the August recess for the GOP-controlled House of Representatives. Recess . . . Washington-speak for thirty days of taxpayer-funded campaigning ahead of the November election. Besides, it’s required by law.

To be fair, the Gang Of Phonies need this undeserved time off away from a job they failed to show up for in the first place. Being away from Washington will free them up to create a new batch of election-year lies designed to convince the people back home that the GOP will really keep their promises this time if given a chance to keep their majority.

No small task, considering the political trail of tears their constituents have been forced to walk after being on the receiving end of one broken promise after another, effectively depriving the governed their constitutionally protected power over the government.

One of the lies we can expect to hear will appear to have a ring of truth to it — tax reform. Trump and the GOP will be heralding the Tax Cuts and Jobs Act (TCJA) as they repeat the talking points used when the law was passed — almost like everything they promised really happened.

They will tell us how tax cuts have provided people with extra money to spend and how this new spending is causing explosive economic growth. And they will claim that tax cuts have for corporations have resulted in the creation of thousands of new jobs with higher wages.

Unfortunately, despite Trump’s “Promises Made, Promises Kept” 2020 campaign rhetoric, these talking points are just that — talk. Simply put, the TCJA has failed to deliver as promised.

While Trump has been touting a GDP of 4% or higher, it has only managed Obama-level performance and has fallen since the tax cuts to around 2%.

Corporations haven’t been using their tax cut windfall to create jobs. Instead, they’ve been using it to buy back their own stock at record levels. While that has kept Wall Street afloat, it hasn’t done much to create jobs.

Trump’s tax cuts are failing to deliver on the wage front as well. While Trump and the GOP promised higher wages, real hourly compensation has fallen dramatically since the TCJA became law and has done little to help workers.

As bad as this news is, it’s made worse thanks to Trump’s schizophrenic trade war. His nationalist approach to “fair trade” is creating inflationary pressure on the economy and forcing corporations to move operations outside the US — an outcome that the Federal Reserve warned in 2016 would happen under Trump’s economic policies.

The bottom line is that the Tax Cuts and Jobs Act has failed, leaving the GOP with no choice but to break out the election-year playbook and deploy the three-step strategy they have relied on for years: Make promises – Break promises – Repeat.

Originally posted on The Strident Conservative.

 


David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

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Economy

A reminder to GOP lawmakers from Justin Amash

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A reminder to GOP lawmakers from Justin Amash

When Representative Justin Amash (R-MI) hadn’t been in Washington DC for very long when he said this amazing quote. At the time, many weren’t paying much attention. After all, many Republicans say similar things when they get to DC, but over time they become jaded, corrupted, or start to get used to being in the DC Country Club.

Amash is different. He has remained consistent with his message and views throughout his career. Now, it’s time for other Republicans to remember what they were sent to Washington DC to do in the first place. Defense of the Constitution is their top priority as it’s the best protection against a government that wants desperately to control every aspect of our lives. From healthcare to the internet to how we use our energy, government intervention has become so commonplace, it’s often hard to see the fabric of our nation behind all the layers of bureaucracy that has been placed on top of it.

“I follow a set of principles, I follow the Constitution. And that’s what I base my votes on. Limited government, economic freedom and individual liberty.”

If more Republicans followed the same principles and didn’t just use them in campaign speeches, we may actually be able to return liberties that have been taken and remove layers of government that have been formed unnecessarily.


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Economy

Larry Elder, Sean Hannity discuss the shutdown

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Larry Elder Sean Hannity discuss the shutdown

Radio host Larry Elder joined Sean Hannity on Fox News tonight to break down the government shutdown. Elder pointed out that President Obama was being urged by advisers, including Rahm Emmanuel, to abandon Obamacare, but Nancy Pelosi urged him to go big or go home.

Later, they discussed the Speaker of the House’s refusal to meet with Angel Moms. Elder asked what she would say to them. Hannity said she should have given them condolences for their losses.

My Take

The talking heads on Fox News keep repeating the same narratives, but it’s not working. This is an example of mainstream media playing to the base by repeating the narrative for cheers from the crowd but failing to present better information the Republican base can use to argue for the border wall.

Many on the right, particularly in media, are failing to make a compelling case for the wall. They need to adjust their talking points if they really want their audience to help sell the idea to the rest of America.


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Economy

Art Laffer on why a trade deficit is a good thing

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Art Laffer on why a trade deficit is a good thing

Conservative economist Art Laffer has been preaching the benefits of free trade and understanding what the numbers behind the economy really mean for most of his life. He’s taken many progressives to school on how to truly boost the economy and has always been a harsh opponent to the leftist’s favorite trade tool, the tariff.

Unfortunately, he’s having a harder time reaching so-called conservative who have abandoned basic economics in favor of Trumponomics. The concept of free trade has been replaced in the eyes of many conservatives and most Republicans with Trump’s idea of fair trade. The result: a trade war with China that is going nowhere fast and costing American businesses and consumers billions of dollars.

As Laffer correctly points out in this quote, running up a trade deficit is an unavoidable side effect of having a capital surplus. In other words, as American consumers spend more money, American businesses make more money. As American businesses make more money, they buy more products from foreign companies. This fact seems to have slipped over President Trump’s head.

“The trade deficit is the capital surplus and don’t ever think of having a capital surplus as being a bad thing for our country.”

Tariffs on China were considered a far-left progressive notion less than four years ago when Senators Chuck Schumer and Bernie Sanders proposed them. Now that President Trump has adopted their plans down to the letter, tariffs are suddenly the GOP way.

For a better explanation, please refer to this article by Benjamin Powell from 2006. Over a dozen years later, the truths still apply.

Trade Deficit Is Really A Capital Surplus

http://www.independent.org/news/article.asp?id=1832As long as our country remains a good place to invest and we have a low saving rate, foreigners are going to invest in the U.S. more on net than we invest overseas. That will generate a capital account surplus and the resulting trade deficit. This is a good thing.

But whether the payment is to a foreigner or to a fellow citizen, the customer’s purchase still indicates that he deems himself better off from the transaction.

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