1) C’mon Let’s Spend Again, Like We Did Last Summer
The budget/debt crisis in Washington isn’t improving – it’s gotten a lot worse this year. This depressing update from CBO shows the deterioration. The dark columns are the monthly deficits for FY2023 and the pink columns are the deficits for FY2022.
We are headed to another fiscal year end with $2 trillion more borrowing.
Where is all the money going? Here are some of the lowlights from the House Budget Committee:
Skyrocketing Interest Payments. The largest spending increase was for interest payments on the debt, which increased by $135 billion (or 37 percent) compared to same point last year.
Unconstitutional Student Loan Bailout. Spending for the Department of Education increased by $22 billion (or 15 percent), thanks to President Biden’s student loan bailouts which the U.S. Supreme Court recently ruled unconstitutional.
Bidenflation Accelerating Federal Spending: Social Security spending increased by $98 billion (or 11 percent), impacted by high inflation. Similarly, Medicare spending increased by $91 billion (or 17 percent), while Medicaid spending increased by $34 billion (or 8 percent).
Bank Failures Under Biden: Federal Deposit Insurance Corporation spending increased by $52 billion (such spending was negative last year), as the agency dealt with bank failures in the spring.
You won’t find them in the dark brown states (states mostly controlled by Democrats).
The states that have seen an increase in the number of children (represented in blue on the map above and typically controlled by Republicans) are:
South Carolina
North Carolina
Idaho
Tennessee
New Hampshire
The states that are losing young children (or where adults aren’t having them) are:
New York
Illinois
California
New Mexico
North Dakota
Why are children hard to find?
A) bad schools,
B) the adults are afraid the planet is coming to an end,
C) liberals have less interest in family and having children,
D) high cost of living
And the answer is: E) all of the above
Now that the left is promoting policies of sterilizing young adults, we suspect this divide on children will continue to widen over time.
To put the U.S. and China in the same category as polluters is an absurdity – like comparing Al Capone to a shoplifter. Pollution levels are roughly EIGHT times higher in China than in the U.S.
Even if carbon dioxide were a pollutant, this chart shows that while the U.S. has decreased its emissions, China has doubled theirs.
As for the idea that the U.S. is a major “polluter,” that is only because the U.S. is the world’s largest producer. Few, if any, countries have reduced air pollution more than the U.S. in recent decades.
According to the Biden Administration’s own Environmental Protection Agency: “Between 1970 and 2020, the combined emissions of the six common pollutants (PM2. 5 and PM10, SO2, NOx, VOCs, CO, and Pb) dropped by 78 percent. This progress occurred while U.S. economic indicators remain strong. The emissions reductions have led to dramatic improvements in the quality of the air that we breathe.”
Finally, try not to laugh out loud when you read this statement in the New York Times article:
“China is known for setting targets and hitting them. It has already surpassed its goal ensuring the share of energy derived from non-fossil fuel sources 25% by 2030.”
Sure and then here is a chart that regular readers of the HOTLINE will recognize, as we’ve shown it before:
That doesn’t look like a country ready to reduce CO2 emissions.
4) Will Canada Snatch Up All the Brainiacs Because of America’s Stupid Immigration Policy?
Last month, our John Fund wrote a piece in the WSJ urging U.S. officials to issue a lot more visas to Russia’s young, well-educated people to come here. Our high-tech and engineering professions have shortages in many areas.
It turns out that a leading Western country is pursuing that strategy – but that country is…Canada.
Ottawa has just announced it will offer open work permits to any immigrants in America on an expiring H-1B visa.
Our idiotic immigration policy sends many of the world’s top scientists, engineers, physicists, physicians, and tech workers back to their home country after a few years here. We do this even though we have severe shortages of these highly trained workers. We also put tight caps on the number of these “brainiacs” – as Larry Kudlow calls these skilled immigrants – who can receive a visa. Last year the cap of about 85,000 H1B visas per year was reached in August.
The backlog for a Green Card can now be four years, and this year only about one in ten applications to the annual H-1B lottery were granted a visa. What’s next? Are we not going to grant a visa to the next NBA superstar Victor Wembanyama?
SORRY SIR, NO VISA FOR YOU
Canada’s proposed work permit would tell these H-1B visa holders: we will take you with open arms. Highly educated workers could quickly become permanent residents under Canada’s more sensible merit-based points immigration system.
If we don’t change our policy and at least double the H1B visas and expedite procedures for these immigrants to stay in the States, America is going to suffer a brain drain to Canada. What’s next? Moving the Statue of Liberty to Lake Ontario?
5) For Almost Two Full Years BidenIflation Fooled Everyone – Why?
We learned last week officially that "Bidenflation" has fallen fast this year to now 3%. But the lingering effects of the 2021-22 inflation liftoff are still being felt every day: products and services are today about 16% more expensive than when Trump left office. Inflation is a tax on savers and those living on fixed incomes, so the damage has been done and will last a long time – even if the Fed is successful and gets inflation back near its 2% target, which is still an open question.
It wasn’t just the politicians, Nobel Prize-winning economists, and the Fed money experts who got the inflation story dead wrong. This chart from the WSJ shows that investors and market forecasters also got surprised by the burst of rising prices. The derivative markets and the bond market were predicting inflation of about 3 to 4.5% and instead, the rate hit 9% last summer and averaged more than 6% for the year.
Why was everyone in the market fooled? Our guess is that few on Wall Street thought the Biden administration and the Democratic Congress would be dumb enough to pass a $6 trillion spending spree in the midst of a post-Covid economic recovery. But they did just that – and even brag about it. The one under-appreciated value of a GOP House is they’ve slowed the spending spree, but as we mentioned above, they haven’t ended it.
So we suppose the lesson here to our Wall Street Journal friends is this: you can lose a lot of money underestimating the stupidity of the political class in Washington.
