In case you didn’t see Steve Moore’s piece in the New York Post this weekend, it exposes the $8 trillion in additional debt America will ring up through 2023 due to Biden's fiscal policies of big spending bills, high inflation, and pitiful economic growth.
This may be surprising to some given that Biden claims to have slashed the deficit by more than $1.4 trillion, which he says is “the largest debt reduction in American history.”
Every president is prone to exaggerating their record. This whopper isn’t even within the galaxy of the truth.
The chart below shows the gap between the Trump baseline that Biden inherited and the much worse numbers today.
Larry Kudlow notes that the economy was growing at 6.5% when Biden took office yet for the last year has limped forward at barely 1%.
As regular readers of the HOTLINE know, we were agnostic about requiring people to wear masks during the height of Covid. On the one hand, we always believed the benefits of wearing masks were highly exaggerated and we cited much evidence in 2020 and 2021 to back up that suspicion. But we also believed that if mask-wearing was necessary to get stores, restaurants, and businesses reopened, it seemed a small price to pay to avert an economic catastrophe and get people to feel safe leaving their homes.
Now here we are at least 18 months AFTER Covid ended as a serious health pandemic and we still see localities, schools, and businesses requiring masks to be worn. Why?
A new systematic review by Cochrane – an international collaborative effort funded by the NIH that is regarded as employing “the highest standard in evidence-based healthcare” - examined all the randomized control trial data available evidence on mask-wearing during COVID.
Here is the conclusion of the lead author, Oxford University’s Dr. Tom Jefferson:
“There is just no evidence that [masks] make any difference. Full stop.”
If people want to wear them, fine. It’s a free country. But can our public officials PLEASE follow the science like they say they do and stop with the mask mandates?
As we approach the third anniversary of Covid, we’ve been urging congressional leaders to establish a “Covid Commission” to help the country discover the real facts about the government and public health debacle of the last three years and learn from the pandemic mistakes.
Now two top medical officials, Martin Kulldorff and Jay Bhattacharya, are making the case too:
When America faced the national tragedy of the Space Shuttle Challenger exploding in 1986, Congress created a commission with independent outside experts, including the Nobel Prize-winning physicist Richard Feynman. His iconic demonstration of a faulty O-ring made brittle in the cold as the cause of the Challenger disaster led to fundamental reforms at NASA.
The American people deserve a similar COVID-19 commission so the public-health disaster of the past three years is not repeated….
One of the most important questions a commission could answer would be why the public-health establishment ignore clear scientific data that Covid infection-acquired immunity is stronger than vaccine-acquired immunity? Vaccine mandates forced many frontline workers — heroes who contracted Covid early in the pandemic while doing essential work — to choose between their careers and a vaccine that provides less protection than the natural immunity they already had.
Kulldorff and Bhattacharya have even provided a blueprint for any commission that’s formed. Working with six other scientists with experience in infectious diseases, public health, epidemiology, immunology, clinical medicine, and COVID treatment, they produced an 80-page list of questions that need answers:
4) More Evidence That Breaching The Debt Ceiling Will NOT Cause A Default
We find it reprehensible that President Biden and his Treasury Secretary Janet Yellen continue to warn of a “default on the debt” (even though they know it will never happen) to win political advantage in budget talks with Republicans. This reckless, scare tactic rhetoric will discourage investors to buy U.S. securities, which will increase the cost of borrowing and cost taxpayers billions.
To repeat: There will never be a default on the debt even if the debt ceiling is reached because the government will have enough revenue still coming in to easily meet the full faith and credit obligations of the U.S. Government. It would force a temporary shutdown of non-essential government agencies like the Department of Labor, the Department of Education, and foreign aid programs but we’ve handled that before easily.
It turns out investors aren’t buying the nonsense and there is no “Default Scenario” being priced into bond prices, as explained in this fascinating analysis by the financial experts at Fisher Investments:
In our long, long, long history of too frequent, repetitive coverage of debt ceiling fights over the years, we have seen many argue investors would demand a deeper discount to buy these Treasury bills at auction, resulting in a high effective yield and probably very low demand.
We aren’t seeing that right now. Exhibit 1 shows this year’s auctions of four-month T bills, with maturity dates in May and June—when Yellen estimates the X date will strike. But yields haven’t much budged, especially when you factor Fed short-term rate hikes in.
So what are the markets seeing? One could argue they know this kind of grandstanding over the debt ceiling is commonplace and has always ended with a deal raising the limit. But they may also see that interest payments are routinely below monthly Treasury revenues, giving the Treasury plenty of bandwidth to continue servicing debt without borrowing if it has to. They may know that the Supreme Court has interpreted the 14th Amendment as requiring the Treasury to prioritize interest payments, and past Treasury secretaries, nonpartisan watchdogs and the New York Fed—which actually makes the payments—have confirmed doing so is legal and feasible. Markets probably have figured out that if Congress decided to drag this thing out beyond the X date that the practical outcome would look a lot like a partial government shutdown.
The real default risk comes from a Greece-style crisis that will occur years from now if we fail to address the debt – and we sure wish the president of the United States and the Treasury Secretary would take THAT crisis (as explained in Item 1 above) seriously.
