One recurring theme of the HOTLINE over the years has been that the budget deficit is driven by excess spending, not any shortage of tax revenues.
We just analyzed the preliminary fiscal numbers for FY2024 – which ended on September 30.
The two charts below show that revenues were way up. But even with record tax collections, the deficit was up. Why? Because spending exploded again in 2024. Expenditures were up by more than $600 billion and by 10%.
Sorry, this story gets worse. Here is what the Congressional Budget Office tells us about these godawful numbers:
Outlays in fiscal years 2023 and 2024 were affected because October 1 (the first day of fiscal years 2023 and 2024, respectively) fell on a weekend. As a result, certain payments were shifted into the prior fiscal year--$63 billion from 2023 into 2022 and $72 billion from 2024 into 2023. If not for those shifts, the deficit in 2024 would have been 13 percent larger--instead of 8 percent larger--than it was in 2023.
We had our Cracker Jack number crunchers recalculate the numbers adjusting for these timing shifts.
If an evil leader were to take over our country and his nefarious plot was to bankrupt the country, he couldn't do it much better than Joe Biden.
2) Could We Really Repeal the Income Tax and Fund the Federal Government With Tariffs?
We've often maintained that one of the greatest tragedies of American history was the passage of the 16th Amendment, which created the federal income tax in 1913. Prior to that, most federal revenues came from tariffs and land sales.
Trump said in an offhand way last week that he might want to eliminate the income tax and fund the government with higher tariffs.
Unleash Prosperity co-founders Arthur Laffer and Stephen Moore have both over the years helped design tax plans that would repeal the income tax and fully replace its revenue.
It would likely include a national sales tax with a rebate for low-income Americans and a flat rate tariff on all imports. This consumption tax could work, but to keep the rate below 20%, government spending would have to be slashed.
If conservatives are serious about pushing this idea, we will be right behind them. Taxing consumption is smarter than taxing income. The plan would be a gigantic vacuum cleaner sucking up capital from across the world.
The Nevada Supreme Court has ruled that election officials can count mail ballots with no postmark that are received as late as three days after Election Day.
Remember: Nevada is a toss-up state in the presidential race and also has a key U.S. Senate contest, plus three competitive House races.
Nevada law requires mail ballots to be postmarked by Election Day in order to be counted, even if they arrive up to three days late. This activist court decision could allow mail-in ballots to be filled out and counted after seeing the results on Election Day – which seems an open invitation for fraud.
Comedian Bill Maher, host of HBO's "Real Time," is known to zing and call out both left and right on his late-night show. The self-described "common sense liberal" was in rare form last week when he attacked teacher unions for their role in destroying the quality of public education:
Standardized testing was dropped until schools saw how dumb that was. And yet, the head of the teachers union in Chicago still maintains that testing is "junk science rooted in white supremacy."
And her union tweeted during COVID, when many Americans felt we could have gotten back to normal sooner, that "the push to reopen schools is rooted in sexism, racism, and misogyny." No, it was rooted in reading, writing, and arithmetic.
The teaching of which is apparently job none in Chicago because only about one in four students in the city are proficient in either math or English, and absenteeism is off the charts. ... Our schools need to do better. Our kids need to be in school, and when they're there, they need to have the phones off and the brains on, learning the basic things we used to teach.
Bill Maher must be a regular reader of the HOTLINE. He sure sounds like one.
Massachusetts Senator Elizabeth Warren wants to put choke collars on Private Equity firms that provide vital capital infusions into both failing and rapidly growing small startups and larger businesses. Tens of thousands of family-owned businesses have been saved by PE investments.
PE financing offers a critical oxygen supply for undercapitalized companies and often offers new management teams to help turn around underperforming firms and raise their value.
It's now a $1.5 trillion industry that has saved or created some 25 million jobs.
But PE firms often get rich off of their interventions and rescue operations and sometimes the companies they try to save go under. So Warren views them as "pillagers" and "predators," not saviors. Her article titled "Stop Wall Street Looting Act" would bring new regulations, taxes, and lawsuits to the industry. She has even proposed jail sentences for PE executives who buy out a company and see it fail. Apparently, the Senator thinks PE firms want the companies they buy to fail.
We can't think of a better way to slow new small businesses than blocking their access to capital. Jack Kemp used to say "Without capital, there is no capitalism." But, of course, Warren hates both.
