September 14, 2016

At Least One Thing Is Growing in the US Economy – the Debt

Yesterday, the Treasury Department released its monthly summary of receipts and outlays. The result: an impressive $107 billion shortfall. And that was just for the month of August.

To be fair, results for individual months can fluctuate so it’s more telling to look at a longer time range. Unfortunately, that doesn’t make it look much better. The cumulative deficit for this fiscal year so far is $621 billion, compared to a $530 billion cumulative deficit this time last year, a 17% increase.

This growth is well-timed because President Obama is about to leave office, and incredibly, some partisans like to paint him as fiscally responsible. Their argument was never that convincing, mind you. Basically it comes down to, “Look how much worse President Bush was!”

You won’t catch us defending President Bush, of course. But that’s not much a compliment now is it? Imagine you told someone they looked very fit… compared to Chris Christie or perhaps a Snorlax. It’s just confusing really.

In any case, the argument also comes with a pretty chart to make the point a bit better:

We’ll have to wait until after September for the official deficit numbers for 2016. But given the most recent numbers, the odds are very good that FY2016 will happily ruin this chart, once and for all reaffirming that both parties are utterly irresponsible on this issue (and most others).

If you’d prefer a more positive spin, then take heart. Because while the US economy may be stagnant, there’s one thing in the US that always grows–the national debt.

Trump Releases Child Care Plan

Donald Trump released his child care plan yesterday. It sounded like something that would usually be proposed by a moderate Democrat. It’s clearly aimed at helping working and middle class people, it would give workers new legal rights to parental leave, and it will almost certainly cost more money (which, as the earlier discussion shows, nobody in Washington cares about).

Thus, you might think Team Clinton would be applauding Trump for pushing a traditionally Democratic cause. Nope. Instead, a Clinton adviser called the plan “half-baked” and said the “lack of seriousness of the proposal is no surprise.”

This should have been a bit awkward though because Clinton’s plan follows the same basic approach. Employees will have right to additional paid time off; government funds it; and due to the lack of any specific tax plans, the amount paid by government will add to the deficit. They disagree on the number of weeks (Clinton wants twelve versus six for Trump), and some details on implementation (subsidies versus tax deduction/credits). But because one’s a Democrat and the other is a Republican, naturally we’re all supposed to pretend like there is a huge difference between them. (There isn’t.)

Incidentally, neither plan is likely to happen given gridlock in Congress, and that’s probably a good thing. Remember that the government doesn’t have any money of its own–if it wants to spend more money, it needs to take that money from someone else (or borrow it, and then take it later). Thus, if the government decides to subsidize child care, it’s really everyone elsethat’s subsidizing child care; government is just the inefficient middleman. On net, that means it’s a wealth redistribution program from people who have no kids to people that have kids.

You might still think that’s a good idea, but we should be explicit about what it means.

Ambassadors Wanted

More documents have been leaked from the Democratic National Committee hack. And as usual, the revelations are upping the ante for future political scandals.

In particular, the latest documents contain more information on major donors. And by an incredible coincidence, many of these top donors just happened to get selected for government positions in the Obama Administration–mostly ambassadorships.

The leaks offer the latest evidence of quid pro quo arrangements with top political donors. They also offer an exciting opportunity for anyone who has several hundred thousand dollars lying around and has always wanted to work abroad in Luxembourg. This could be your chance!

This story hasn’t really taken off in the mainstream media just yet, and we can’t really blame them. It’s been hard to keep up with all the various things that deserve outrage coming out of the DNC and the Clinton campaign. (Obviously, Republicans have their own scandals, but lately, the Democrats have really dominated this topic.)

But as usual, the DNC has a perfect defense prepared: “The Russians did it, so let’s ignore the documents.” (That was a minor paraphrase, of course.)

Check out Zero Hedge for more on this story.