Free Republic

The Congressional Budget Office (CBO) projects that recent U.S. tariff increases will reduce federal deficits by $2.8 trillion over the next decade, primarily through increased customs revenue and lower interest payments on federal debt—more than enough to offset the projected cost of President Donald Trump’s proposed tax cut bill. In a separate analysis, the CBO recently estimated that extending the 2017 tax cuts, as proposed in the administration’s new tax and spending bill, would increase the deficit by roughly $2.4 trillion over the same period. That legislation would reduce federal revenues by $3.67 trillion while cutting spending by $1.25 trillion,...

California Gov. Gavin Newsom (D) proposed Wednesday to spend $1 billion per year on the state’s failing high-speed rail project through cap-and-trade programs, even as his budget drowned in massive deficits. As Breitbart News reported, the governor’s revised budget plan sought cuts to a variety of programs to make up a $12 billion deficit. He even proposed cutting off new enrollees for “free” health care to illegal aliens. But high-speed rail — a program that is decades late and $100 billion over budget without a single station being built — will continue to be funded, as Newsom continues to embrace...

Senator Rand Paul (R-KY) said Tuesday on CNBC’s “Squawk Box” that it was “absolutely a fallacy” that the United States is getting ripped off because they have a trade deficit with another country. Paul said, “I mean, the whole debate is so fundamentally backwards and upside down. It’s based on a fallacy, and the fallacy is this, that somehow, in a trade, someone must lose. That somehow, when you trade with someone, there’s a loser and someone’s taking advantage of you, and China is ripping you off, or Japan is ripping you off. It’s absolutely a fallacy. Every trade that...

Overview Elon Musk recently stated that “rich people” should “be caring more” about federal deficits because “if the ship of America sinks,” “we all sink with it.” This may seem like hyperbole, but a widely overlooked report from the U.S. Treasury shows it is a likely scenario unless major changes are made. The Treasury report, quietly released in January, shows that if the federal government reported its finances in the same manner that large corporations are required by law to report theirs, the primary measure of federal red ink wouldn’t be $36 trillion in national debt but $143 trillion in...

The Biden administration rang up a budget topping $1.8 trillion in fiscal 2024, up more than 8% from the previous year and the third highest on record. Interest expense for the year totaled $1.16 trillion, the first time that figure has topped the trillion-dollar level. The Biden administration rang up a budget deficit topping $1.8 trillion in fiscal 2024, up more than 8% from the previous year ... the shortfall totaled $1.833 trillion, $138 billion higher than a year ago. ... The deficit came despite record receipts of $4.9 trillion, which fell well short of outlays of $6.75 trillion. Government...

Washington’s addiction to deficit spending — a rare bipartisan habit — is unlikely to change, no matter the electoral outcome in November. A deep conviction exists on both sides of the political divide that fiscal consolidation, whether achieved through less spending or higher taxes, reduces growth. What this political consensus misses, however, are situations in which the classic trade-off is suspended — when smaller deficits can counterintuitively deliver more growth. Today’s macroeconomic environment is ripe for such an approach. Compared to the years before the pandemic, fiscal policy — government spending and taxation — has kept a foot on the...

In 2020, countries across the world followed in the footsteps of China and locked down hard against Covid-19. Liberties were drastically curtailed. As was economic activity, forcing governments to borrow tens if not hundreds of billions of pounds each to keep businesses and furloughed workers afloat. In Europe, one notable exception to this was Sweden. The Swedish government, despite facing heavy criticism, decided against imposing tight restrictions on social activity. The evidence now overwhelmingly suggests that Sweden made the right choice. SNIP>>>> Although we could not explore every possible impact of the various lockdown measures, our conclusions were straightforward: countries...

[Arthur]Burns, former Fed Chair, was infamously literally assaulted, being shoved up against the wall, by Nixon because he was not sufficiently "nice" in his decision-making at the time. "Nice", of course, meant lower rates. What followed was the second and extremely destructive run of inflation that defined Carter's Presidential term after Ford lost to him and, I might add, which was not his fault. Such is the nature of all economies; they take time to process what happens at a policy level whether intentional or not, simply because producing things doesn't happen instantly and thus when you change something on...

Milton Friedman once observed, “If the government ran the Sahara, in five years there would be a shortage of sand.” He was right. The government has run Social Security for more than 80 years, and now there is a shortage of security. At this point, the experts believe that someone who is 79 years old today is likely to outlive the system’s ability to pay scheduled benefits. The solution, according to the White House fact sheet on the 2024 Budget Proposal, is: do nothing, and the Republicans cheered. That leaves a rapidly growing problem to third parties.Social Security presents a...

The US Fiscal position is very bad and the US is beginning to look like a third world economy. And with Biden and Democrat AGs filing indictments against Biden primary Presidential oppoonent, that country is Venezeula! Like skyrocketing interest on the Federal debt to pay for green energy hustlers and the Ukraine war. The US Federal Deficit continues to grow as seen in the charts below. A $2.25 Trillion dollar run rate deficit is significantly worse than the $1.3 Trillion that was recorded in Fiscal 2022. This level of deficit is unprecedented in an economy with low unemployment and theoretically...

Several Republican representatives say they're unhappy with the debt ceiling deal after the White House and House Speaker reached a tentative agreement Saturday night. Kevin McCarthy said he'd spoken with President Joe Biden on the phone twice and struck a deal in principle after weeks of fraught negotiations. The deal means the US will avert a national debt default, which could trigger chaos on financial markets and send the dollar sinking – but the legislation still has to pass both the House and the Senate. Republican Congressmen Ralph Norman and Ken Buck both attacked the agreement. Norman, of South Carolina,...

The efforts of House Speaker Kevin McCarthy (R-CA) to negotiate a compromise agreement to raise the government's debt limit was flatly rejected by President Biden. Presidential Press Secretary Karine Jean-Pierre explained that "the President considers any attempt to restrict the amount he needs to spend an attack on our democracy. The American people voted for him to be president. This empowers him to determine what has to be done for the benefit of the country. It is Congress' job to pass the legislation necessary to fund the President's programs. Refusing to do what the President wants is treason." McCarthy called...

Just last month the NY Times published a story about the growing US debt. The story relied on what were, at the time, the most recent estimates from the Congressional Budget Office.America’s debt is now six times what it was at the start of the 21st century. It is the largest it has been, compared with the size of the U.S. economy, since World War II, and it’s projected to grow an average of about $1.3 trillion a year for the next decade.Today, the CBO put out a new estimate which is significantly worse. Now the US is projected to...

On Wednesday’s broadcast of the Fox News Channel’s “Your World,” host Neil Cavuto responded to President Joe Biden arguing earlier in the day that “bringing down the deficit is one way to ease inflationary pressures” by stating that this should probably be a reminder that the best way to handle inflation going forward “is to put down the spending shovel.”

The amount of money that investors are parking at a major central bank facility climbed to yet another all-time high as supply-demand imbalances continue to dog U.S. dollar funding markets. Eighty-one participants on Monday placed a total of $1.758 trillion at the Federal Reserve’s overnight reverse repurchase agreement facility, in which counterparties like money-market funds can place cash with the central bank. That surpassed the previous record volume of $1.705 trillion from Dec. 17, New York Fed data show. Demand for the so-called RRP has climbed further as principal and interest payments from government-sponsored enterprises has entered short-end funding markets....

Republicans have criticized Democrats for continuing to push their pandemic stimulus package while accepting little to no Republican input. House Minority Leader Kevin McCarthy (R-Calif.) said Wednesday out of 286 amendments proposed by Republicans for the $1.9 trillion spending package, only two were accepted. “Republicans offered 286 amendments to President Biden’s massive $1.9 TRILLION spending blowout. Democrats accepted 2 of them. So much for Biden’s calls for ‘unity,'” McCarthy said in a statement. On Feb. 19, Democrats unveiled the full text of a 591-page bill (pdf) titled the “American Rescue Plan Act of 2021.” House Republicans held a press conference...

Coronavirus is both a public health problem and an economic problem, and the two work against each other. The measures we must take to save lives necessarily mean shutting down large parts of our consumer-driven economy. People are losing jobs and businesses are losing revenue. Does that mean we simply ignore the virus and let people get sick and sometimes die? No, that won’t work, either. Our healthcare system can’t handle what would happen. It would collapse and be unable to help anyone with anything. We need to sustain the economy for however long it takes to beat down the...

The economic indicators all show the economy is booming. Unemployment is at record lows. The stock market is seeing record highs. Wages are up, and taxes are down. Stifling regulations are being lifted. Everything seems to be working just fine. There is much truth in this perception of a boom. Part of this can be attributed to less government interference and taxation. Unnecessary government regulation and spending always hurt the economy. When markets are freer, profits tend to come galloping back. And much has galloped back. However, beneath the surface, major problems threaten the boom. These problems have long plagued...

A booming economy should help people make good financial decisions since more money can be directed to other needs. That is why savings rates normally go up as the economy improves. People naturally tend to take advantage of better days especially after bad or slow times. This is not happening now. Many Americans are spending more on consumer goods, but they are not saving their money or accumulating wealth. No Emergency Funds Nearly a quarter of households, for example, do not have any available emergency funds according to a survey conducted by the SSRS research firm. Another third do not...

Germany's biggest lender is rapidly slashing jobs, it's losing a ton of money and the stock is trading near all-time lows. Many of Deutsche Bank's problems are self-inflicted. It's been badly mismanaged. Deutsche Bank (DB) never fully cleaned up its crisis-era balance sheet. Restructuring efforts fell short. And its countless legal black eyes haven't helped matters. But Deutsche Bank's struggles have also been amplified by something the 149-year-old lender never imagined, mostly because it had never happened before in modern history: negative interest rates. In 2014, the European Central Bank wanted to boost the sluggish economy but interest rates were...