Both Parties Have New COVID Relief Bills; Here’s What’s In Them

In the midst of surging Coronavirus cases, both parties are acknowledging the need for another relief bill. As I wrote last week, the pandemic is a true national emergency and one of the few instances in which, as Barack Obama put it, shoveling money out the door is the right response, but how the money is going to be spent is also important. The two parties have starkly different visions for where the relief money should go.

Direct payments For starters, Democrats and Republicans both agree that there should be another round of payments to Americans. The relief money, which is often referred to as a stimulus but is more accurately for subsistence, paid out by the federal government in March has long been exhausted by the people who are on the financial brink. The $1,200 per person payments don’t go far when three months of rent or mortgage and car payments are considered.

Both parties favor a new $1,200 payment for individuals. Per CNN, the Republican plan would max out at $2,400 per family plus an additional $500 for each dependent while Democrats would allow a maximum of $6,000. Both bills would start to phase out benefits at an income level of $75,000 for individuals or $150,000 for married couples.

As I wrote previously, the government should be encouraging people to stay home as much as possible until the pandemic is under control in their area. A better solution than another one-time payment would be a measure that authorizes payroll subsidies when virus levels reach certain metrics that require sheltering in place.

Unemployment The current $600 per week addition to unemployment benefits is scheduled to expire at the end of July. The Democrat plan would extend the enhanced benefit through January and enable those receiving regular state benefits to continue receiving the extra money as late as March. The Republicans would decrease the benefit to a $200 per week extra payment which would expire December 31.

The $600 per week enhancement is too much. It has allowed many people to earn more on unemployment than at their jobs. This benefit should also be tied to success in the fight against the virus.

Small business loans Republicans would allow businesses to apply for a second loan through the Paycheck Protection Program provided that they have fewer than 300 employees and have lost more than 50 percent of their revenue during the first or second quarter of the year. The maximum loan amount would be reduced from $10 million to $2 million. The GOP program also creates a low-interest loan program for seasonal businesses or companies that operate in low-income communities with fewer than 500 employees and 50 percent lost revenue. Republicans would also give businesses more flexibility on how to spend the money.

The Democrat plan does not extend the PPP but does add $10 billion to the Economic Injury Disaster Loans program that ran out of money last week. The program was initially funded with $20 billion. Some Democrats have said that they would also be open to extending the PPP.

The additional loans to small businesses are much-needed. The PPP has been mostly successful so replenishing the available loan funds is a good thing, as is giving businesses more flexibility.

Education The Republican plan grants $105 billion for education which would be split with $70 billion for K-12 schools, $30 billion for colleges, and $5 billion to be allocated by governors. Two-thirds of the money would go to schools that reopen for in-person instruction. Democrats offer a total of $100 billion with $59 billion for K-12 and the remainder for higher education.

With virus levels high throughout much of the country, there should be a focus on funding more virtual classes rather than pushing schools to bring students back to in-person classes. Children are at lower risk for COVID-19 but can still spread the disease to vulnerable people in their families and community.

Liability Republicans would give liability protection to businesses, schools, health care providers, and non-profits that would prevent people from suing if they contract COVID-19 from using their facilities. Democrats oppose these liability protections and want OSHA to require employers to create plans to protect workers from COVID-19 exposure.

The focus should be on reopening safely not on escaping liability. Any liability protections should be extended only to organizations that take steps to protect their customers and employees.

State and local funding The Democrat plan includes $500 billion for states and $375 billion for local governments. The money could be used to address budget shortfalls due to lost revenue from taxes or other fees or to pay for Coronavirus-related expenses.

This is needed by many state and local governments. Tax revenues will be taking a hit due to the slowing economy and costs for measures like setting up Coronavirus screening stations and sanitizing government buildings have been high.

These bills will undoubtedly be changed as they work their way through the legislative process. Ideally, the final product would be an amalgamation of the best Republican and the best Democratic ideas. In this charged political environment, however, it would not surprise me if both of these bills stall, despite the fact that the country is very much in need of relief.

It is in the interests of both parties to work together to get the relief bill passed. As the CARES Act provisions expire, unemployment will rise and real estate prices, which have so far been solid, may collapse, further worsening the economy. Republicans won’t benefit from a collapsing economy in November, but Democrats will probably not benefit from transparently obstructing the bill. Americans want both parties to put on their big-boy pants and do the job they were sent to Washington to do.

Originally published on The Resurgent

Donald Trump’s Name Will Be On Stimulus Checks

Most of the stimulus money going out this week will be in the form of electronic transfers, but the paper checks mailed out by the Treasury will have a curious addition, the signature of President Trump.

The 2020 stimulus checks will be the first IRS disbursements to ever bear the name of the president, who has no authorization to sign checks for the federal government. The checks will be signed by an official from the Bureau of the Fiscal Service reports Axios.

Although electronic transfers are already being received, paper checks will be mailed starting on May 4 with the last checks going out in August. Treasury officials denied that adding the president’s name had delayed the checks.

The Washington Post reported that Trump had suggested to Treasury Secretary Mnuchin that he be allowed to sign the checks. Since the president has no legal authority to do so, the phrase “President Donald J. Trump” will appear on the memo line of the checks instead.

The obvious ploy is to make voters think that President Trump is responsible for the stimulus checks. If the president had been allowed to sign the checks, some voters might have even been persuaded that Mr. Trump was personally sending them money.

Trump supporters will obviously love seeing their president’s name on the checks. For weeks, the president’s backers have been shouting online that if he’s not your president, don’t cash the check. Nevermind that the money being disbursed belongs to the taxpayers, not the government.

However, Mr. Trump’s penchant for putting his name on everything will come at a political price. With the Coronavirus recession looming and seeming less and less likely to be a quick downturn and recovery, there is already talk of additional stimulus bills.

When those bills come before Congress, you can bet that one of the provisions will be the payments will not include the president’s name. It will merely add another point of contention between the two parties and make compromise even more difficult.

Of course, there might be a way to speed the next bill through Congress without deleting the president’s name. Maybe the next checks will be stamped, “President Donald J. Trump and Speaker of the House Nancy Pelosi.” Republicans wouldn’t object to that, would they?

Originally published on The Resurgent

Senate Reaches Agreement On Coronavirus Relief, Here’s What’s In The Bill

Senators reached a compromise on the Coronavirus relief package in a late-night session on Tuesday. The agreement was announced early Wednesday morning at about 1:30 am by Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles Schumer (D-N.Y.).

“This is a very important bipartisan piece of legislation that is going to be very important to help American workers, American business and people across America,” Treasury Secretary Steven Mnuchin told the Washington Post Wednesday morning. “We couldn’t be more pleased.”

Mnuchin added that he had “spoken to the president many times today; he’s very pleased with this legislation and the impact that this is going to have.”

In a written statement, Speaker Nancy Pelosi also that House Democrats will accept the compromise as well, saying, “This bipartisan legislation takes us a long way down the road in meeting the needs of the American people.”

Pelosi added, “The compromise does not go as far as” the Democratic bill, but said that “thanks to the unity and insistence of Senate and House Democrats, the bill has moved a great deal closer to America’s workers.”

The new version of the $2 trillion bill reportedly includes:

• $250 billion for individuals and families in the form of $1,200 payments for individuals who earn up to $75,000 and $2,400 for couples earning up to $150,000. There is an additional payment of $500 per child. Benefits phase out at $99,000 for singles and $198,000 for couples.
• $350 billion in small business loans
• $250 billion in unemployment benefits
• $500 billion in corporate loans
• $130 billion for hospitals
• $150 billion for state and local governments
• A provision that would prevent the Trump family, top government officials, and members of Congress from getting stimulus loans or investments
• Creates a special investigator general for pandemic recovery and establishes Pandemic Response Accountability Committee to oversee business loans   

The Senate reconvenes this afternoon to consider the compromise. The Senate could pass the bill, which would then go to the House, by this evening.

Experts say that even after the bill is passed, it will take time for the federal government to get the money to the people. CNN notes that previous stimulus payments took from two to 10 weeks to process. Payments to people who have already filed tax returns and who have opted for direct deposit are likely to be received quicker than those to people who do not file returns or who have opted for paper checks.

Originally published on The Resurgent

Is Trump conservative? Does it matter?

One of the big criticisms of Donald Trump from the right during the campaign is that he wasn’t a conservative. Trump embraced many policies, such as his proposal for a new childcare entitlement and his promise to outspend Hillary on an infrastructure stimulus, that made him seem somewhat liberal to many of us. After a week in office, it’s still hard to tell whether Trump is a conservative, a liberal or something in between. Now, however, there is a new question: Does it matter?

Donald Trump was definitely not the most conservative candidate in the Republican Primary. With the exception of John Kasich, it’s hard to identify any of the candidates that I would have considered less conservative than Mr. Trump. This may have actually helped him win.

Many of us have argued for years that the Republican Party needed to appeal to moderate and independent voters to win. As evidence of this, consider the fact that John Kasich, considered by many to be a “RINO,” polled better in head-to-head matchups with Hillary Clinton than any other candidate. Kasich could not bring together the GOP base to win the primary, however. Trump, for all his faults, managed to eke out a primary victory and then win 88 percent of Republicans and 46 percent of independents in the general election according to CNN exit polling.

Could any other candidate who could have won the Republican nomination succeeded in winning Ohio and Florida, not to mention Michigan, Pennsylvania and Wisconsin? There is no way to know for sure. What is certain is that Trump, with his moderate to liberal background on many issues, did do exactly that.

Trump’s performance in the first week of his presidency is undoubtedly preferable to Hillary Clinton. In spite of some missteps, President Trump seems genuinely interested in paying back the people who put him in office. Can anyone seriously argue that President Clinton would have restored the Mexico City Policy or the Keystone and Dakota pipelines? Would Hillary have instructed HHS not to enforce the Obamacare mandate? Certainly not.

The flip side is that President Clinton may not have withdrawn from the Trans-Pacific Partnership, even though she professed opposition to the trade deal. President Clinton definitely would not have adopted policy and made comments that would place the United States on the verge of a trade war with its second largest trading partner.

The rub is that Donald Trump’s protectionist position on trade cannot be blamed solely on lack of conservatism.  Numerous polls show that about half of Republican voters believe that free trade deals have hurt their communities. Over the past ten years, party views on free trade have flipped to the point where more Democrats are now in favor of free trade than Republicans.

Much of the Republican angst over trade can be traced to the stagnation of the Obama era, the loss of jobs to automation and a lack of spirited defense of trade by Republican and conservative leaders. In contrast to the 1970s when economist Milton Friedman was able to describe the benefits of free trade and economic freedom of choice to the common man in a witty and entertaining way, there seem to be no voices today answering the charge that “America never wins anymore.”

Likewise, Trump’s unconservative promise to spend billions on an infrastructure stimulus draws support from Republicans as well as Democrats and independents. A Public Policy Poll from September found that 72 percent of Americans favored more federal spending on roads and bridges. The traditional conservative view is that such projects should be the responsibility of state and local governments.

The problem on many issues isn’t so much that Donald Trump isn’t conservative, it’s that many Republican voters aren’t conservative on many issues. It is difficult to fault President Trump for being insufficiently conservative when he ran on a moderate platform and was elected by voters who knew exactly what he stood for.

Regardless of Trump’s personal beliefs on policy and issues like abortion, he seems willing to work toward the beliefs of the people who put him in office. Does it really matter what Trump believes about abortion if he is willing to pass pro-life legislation and roll back the Obama Administration’s pro-abortion policies?

At this point, with the Trump Administration established in the White House, it matters less whether he is a true believer in conservative principles than if he is willing to use his position to advance conservative ideas. Where liberals often seem to feel that motives are more important than results, I would be happy to have a president who enacts good, practical, conservative ideas even if it goes against some of his own beliefs.

A positive thing about Donald Trump is that he is a dealmaker, not an ideologue. He realizes that deals require give and take. In that sense, it is even possible that more conservative reforms can be enacted under President Trump than under a conservative version of President Obama, an ideologue who refused to compromise to get things accomplished for the good of the country. With a slim majority in the Senate, cloture votes will require deal-making with Senate Democrats to pass almost any legislation and break the partisan stalemate.

With respect to the issues where Donald Trump does not take the conservative position, such as free trade and the Keynesian belief in stimulus spending, it will be up to Republican leaders and conservative thinkers to convince both the president and the members of the party’s base to take the conservative tack. The right shouldn’t just oppose centralized government planning and micromanagement when it is done by Democratic administrations, it should oppose the expansion of government under Trump as well.

So does it matter if President Trump is not a conservative? Sometimes it does. Republicans should rally behind him when he enacts conservative policies, but oppose him when he advocates policies that are not in line with conservative principles. Convincing the president on these issues will mean persuading his supporters with conservative arguments. That, in turn, will require much better communication from Republican leaders than what we have seen over the past eight years.

Originally published on The Resurgent

Trump and Pence plan 'big' infrastructure spending bill

There have been indications in the past that the Trump Administration is planning to start with another infrastructure stimulus package. Now Mike Pence, the incoming vice president, has said openly that one of the first items on the agenda of the Trump Administration will be a big infrastructure spending bill.

“I called [Trump] this afternoon to tell him I was coming by,” Pence told the annual U.S. Conference of Mayors in The Hill. “In addition to urging me to send along greetings, he said, ‘Tell them we’re going to do an infrastructure bill — and it’s going to be big.’”

But maybe not “yuge.” The Hill notes that Trump proposed a plan that would give $137 billion in tax credits to private companies that form public-private partnerships to build transportation infrastructure projects. At other times, Trump proposed doubling Hillary Clinton’s proposed $275 billion infrastructure stimulus. In either case, Trump’s spending would fall short of President Obama’s $787 billion stimulus package in 2009 that had negligible effects on the economy.

Trump may find that his stimulus is attacked from both sides. Democrats may argue that the smaller figure is not enough to properly address the country’s aging roads, bridges and airports while Republicans will be concerned about adding billions of dollars to the national debt.

Nevertheless, Trump’s infrastructure stimulus may present an opportunity for Trump to cobble together a bipartisan majority to pass the project. Democrats are proven supporters of debt-financed, infrastructure spending. While most Republicans normally resist the siren song of borrowing and spending on public works, many might be swayed if the bill is backed by Donald Trump. With conservative Trump supporters like Mike Huckabee and Mike Pence in favor of more infrastructure spending, many Republican congressmen may vote for the bill.

Originally published on The Resurgent

Trump and Democrats could form alliance on some issues

One potential problem for the Trump Administration is that since Trump is a newcomer to the Republican Party, he holds different views than many other Republican elected officials. During the campaign, Trump’s views on many set him apart from other candidates in the primary. They also set him apart from other members of his party in the general election.

Trump made many promises that he may find his Republican colleagues unwilling to back up. The Republican Party has traditionally been a free trade party, but Trump is openly hostile to trade deals. Republicans fought tooth and nail against Obama’s infrastructure stimulus, but Trump has hinted at a similar spending program. Trump’s proposed childcare plan is the sort of entitlement expansion that Republicans have opposed when put forward by Democrats.

Some Republicans are undoubtedly confirmed passengers on the Trump Train, but many others will require much persuasion. Many Republicans supported Mr. Trump only reluctantly as the only alternative against Hillary Clinton. Conservative members of the party are unlikely to be willing to blindly follow Trump down a path of progressive policies.

The rub is that the Republican Party isn’t as conservative as it used to be. While few Republicans have voiced support for Mr. Trump’s childcare entitlement, anti-trade sentiment and isolationism had been growing in the GOP even before Trump burst onto the stage.

The libertarian faction of the GOP has been arguing against foreign involvement for years. When President Obama drew a “red line” in Syria, it was a bipartisan coalition of anti-war Republicans and Democrats that revolted against a military strike against the Assad regime’s chemical weapons facilities. Likewise, the Trans-Pacific Partnership was tagged as “Obamatrade” by Republicans who sided with Bernie Sanders to kill the trade deal.

Following these examples may provide Trump with a strategy to enact some of his less-than-conservative ideas. It is not beyond question that President Trump could reach out to forge bipartisan coalitions to push through policies that lack conservative support.

For example, the base of the Republican Party has moved left on trade. A September poll in Politico found that 85 percent of Republicans believed that free trade cost more American jobs than it has created. Only 18 percent believed that trade deals had helped their communities.

Even though many voters have shifted, many congressional Republicans remain favorable to free trade. President Trump is unlikely to be able to rely on Republicans to rubberstamp an anti-trade agenda of higher taxes and more regulation. The answer might well be to find a majority by combining protectionist Republicans and Democrats into one voting bloc.

Trump is hardly hostile to the idea of reaching across the aisle. Last January, early in the primary season, Trump said on MSNBC, “I think I'm going to be able to get along with [House Minority Leader Nancy] Pelosi — I've always had a good relationship with Nancy Pelosi.” Trump also said he was “close to” incoming Senate Minority Leader Chuck Schumer “in many in ways.” Trump said in the Washington Examiner in July that he wouldn’t mind being a “free agent” when dealing with Congress.

Trump’s cabinet appointments also show a willingness to go outside the Republican Party. Wilbur Ross, Trump’s pick for Commerce Secretary, was a Democrat until after the election.  Steven Mnuchin, Trump’s Treasury Secretary, worked for Goldman Sachs and George Soros. Mnuchin, like Trump, was a big donor to Democrats before this election cycle. Trump’s pick for National Security Advisor, Michael Flynn, is also a registered Democrat.

Would congressional Democrats work with Trump? They seem open to the possibility.

“If he truly wants to revise U.S. trade policy, he is going to have to come and work in a bipartisan manner to do that. It's always been a substantial majority of Democrats who oppose these agreements," Rep. Peter DeFazio (D-Ore.) said in US News.

Even new Senate Minority Chuck Schumer is reaching out. “To the extent that the president-elect and the Republican majority pursue policies that help Americans and are consistent with our values, we stand ready and willing to work with them,” Schumer recently said in a speech quoted in Yahoo News. Schumer suggested that an infrastructure stimulus, tax reform and trade might be areas where Democrats and Trump could find common ground.

On the other hand, some Trump priorities would find little, if any, support from Democrats. A repeal of Obamacare or hardline immigration reform would be largely party-line issues that Schumer says Democrats would fight “tooth and nail.”

At this point, we can only speculate what the Trump Administration will be like. From his performance in the campaign, we can assume that there are few ideas that President Trump will be strongly committed to, but one of those is a protectionist trade agenda. To accomplish his goal of imposing large taxes and restrictions on trade, Trump, the former Democrat donor, is very likely to make a deal with congressional liberals.

Originally published on The Resurgent

Valerie Jarrett pronounces Obama scandal-free

Valerie Jarrett, a senior advisor to President Obama, triggered a collective national “WTF” moment on Sunday when she said on CNN that the Obama Administration had been scandal free. Jarrett, who might have been playing Rip Van Winkle for the past eight years, said, “The president prides himself on the fact that his administration hasn’t had a scandal and he hasn’t done something to embarrass himself.”

Pardon us while we scoff.

The Obama Administration started off with a scandal as a plethora of Obama appointees, including Treasury Secretary Tim Geithner, were revealed to be tax cheats. The problem didn’t go away after the original round of confirmations in 2009. In 2012, Investor’s Business Daily found that 36 Obama aides owed almost a million dollars in back taxes.

The president’s signature piece of legislation, the Affordable Care Act, was tainted by backroom deals to get Democrats on board. The phrase “Louisiana Purchase” took on new meaning as the revelations of $200 million for Louisiana’s Medicare in exchange for Senator Mary Landrieu’s vote angered Americans. In the end, even with the secret deals, Obamacare required quasi-constitutional maneuvering to get through the Senate with no Republican votes.

Does Valerie Jarrett not consider it embarrassing that the president was awarded the dubious distinction of having told the Lie of the Year by Politifact for his statement that, “If you like your health care plan, you can keep it.” As it turned out, many Americans could not keep their plans because insurers canceled them since they didn’t comply with the new law. Even plans that weren’t canceled weren’t the same after Obamacare. Premiums skyrocketed as new federal mandates went into effect.

How about the Solyndra scandal? Obama’s administration put hundreds of millions of dollars into green companies, many of which promptly went bankrupt. Does that count as a scandal?

How about Fast and Furious? Obama’s ATF released illegal guns into Mexico where they were used to arm drug cartels. One of those guns eventually killed a US Border Patrol agent, Brian Terry.

Is the politicization of the IRS worthy of being called a scandal? The targeting of political opponents by the Internal Revenue Service is positively Nixonian. The main difference is that Nixon’s IRS commissioner refused to comply with similar unethical orders from the Nixon White House.

Originally published on The Resurgent

Mike Huckabee wants infrastructure jobs 'you cannot outsource'

(Gage Skidmore/Flickr)

It seems that Gov. Mike Huckabee is the latest conservative on Team Trump to fall victim to the Keynesian delusion that infrastructure spending is the way to revitalize the economy. A tweet by Fox News yesterday quoted Huckabee as saying, “The most effective way to put people on a job is to do infrastructure jobs b/c it’s the one thing you cannot outsource.”

The tweet does not offer a link to a clip of the segment, so Huckabee’s comment cannot be viewed in full context, but the statement comes after other members of the Trump transition team, including the president-elect himself, have signaled that infrastructure spending, most likely financed by debt, will be a top priority in the new administration.

While Huckabee is technically correct that construction jobs cannot be exported to foreign countries, the construction industry is a major employer of illegal immigrants. In 2012, four years into the unemployment crisis brought on by the Great Recession, Pew Research found that about 15 percent of construction and extraction jobs were held by illegal aliens.

During the campaign, it was pointed that Donald Trump had even used illegal aliens in the construction of the Trump Tower in the 1980s.  The Washington Post reported that Trump was also using illegal workers in the construction of his new hotel in Washington, DC, a charge that he denied.

Even without possibility of government infrastructure money going to illegal workers, Huckabee’s infrastructure comment shows a lack of deep thinking on the issue of jobs. Government spending on infrastructure can create jobs in the short term, but what happens when those projects are finished? Government projects often run behind schedule and over budget, but eventually they come to an end. If the underlying problems with the economy are not fixed the result will be a country with a lot of nice, new roads and bridges, a lot more debt and a chronic high unemployment rate.

The key to revitalizing the economy is to create a climate in which American companies can create things that people in the rest of the world want to buy. Tax and regulatory reform would allow American businesses to build things at prices that are competitive with the rest of the world.

When the federal government takes on more debt, it needs more tax money to pay back what is borrowed. Higher taxes and more government spending make the US less competitive. Neither families nor countries can borrow their way to prosperity.

The infrastructure stimulus has been tried and has failed numerous times. Most famously, President Roosevelt’s “New Deal” created the Works Progress Administration, an entire government agency whose purpose was to create infrastructure jobs for unskilled laborers. The WPA was responsible for many roads, bridges, parks, and post offices, but what it did not do was end the unemployment crisis.

More recently, President Obama’s American Recovery and Reinvestment Act in 2009 spent $787 billion on “shovel-ready” infrastructure jobs. The success of Obama’s program can be judged by the fact that unemployment is still a problem eight years later.

One conservative critic of Obama’s stimulus said at the time, Republicans in Congress “were elected to represent their constituents, but they can’t hardly do that and vote to pile on unimaginable debt on their grandchildren.” He continued, “If you think future generations of Americans can afford a congressional version of ‘shop-til-you-drop,’ then just remain silent, but I don’t plan to.”

Who was that outspoken critic of Obama’s stimulus boondoggle? It was Mike Huckabee.

When did borrowing money to create jobs paid for by the government become a conservative policy, governor?

Originally published on The Resurgent

Trump wants to 'prime the pump' with infrastructure stimulus

Donald Trump has again embraced the idea of a stimulus spending bill to help jumpstart the economy. In his interview with Time Magazine for the Person of the Year issue, Trump said that it was necessary to “prime the pump” to increase economic growth.

During the campaign, Trump had advocated an economic stimulus plan that was larger than that proposed by Hillary Clinton. Last August, Trump discussed his ideas on stimulus on Fox Business (quoted in Bloomberg), saying, “Well, I would say at least double her [Hillary Clinton’s] numbers, and you're going to really need more than that. We have bridges that are falling down. I don't know if you've seen the warning charts, but we have many, many bridges that are in danger of falling.” Clinton’s plan had an estimated price tag of $275 billion.

To pay for his plan, Trump said, “We'll get a fund. We'll make a phenomenal deal with the low interest rates…. People would put money into the fund. The citizens would put money into the fund,” he said, adding that he'd use “infrastructure bonds from the country, from the United States.”

Trump’s comments in the Time interview, which was conducted on Nov. 28, appear to indicate that he is not moving away from his plans to spend large amounts of money on an infrastructure stimulus. Trump’s full comment on the stimulus during the interview was vague on details.

“Well sometimes you have to prime the pump. So sometimes in order to get the jobs going and the country going, because look, we’re at 1% growth,” Trump said. “I was taking to the head of a major country, because most of them have called me and I’ve talked to all of them. ‘Yes, we are doing not well, not well. Our GDP is only 4.5%.’ I said wow, if our GDP was 4.5% we’d be the happy – I mean our GDP is probably less than 1% if you think about it. And going in the wrong direction.” GDP growth in the third quarter was reported at 3.2 percent.

Other members of the incoming Trump Administration have signaled their support for government intervention in the economy as well. In a post-election interview with the Hollywood Reporter, Steven Bannon, who will be a Senior Advisor to President Trump, said, I'm the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it's the greatest opportunity to rebuild everything. Shipyards, ironworks, get them all jacked up. We're just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.”

Wilbur Ross, the incoming Secretary of Commerce, and Peter Navarro, an economist and advisor to Trump criticized Obama’s stimulus in a policy paper during the campaign. “All we have gotten from tilting at Keynesian windmills,” they wrote, “is a doubling of our national debt from $10 trillion to $20 trillion under Obama-Clinton and the weakest economic recovery since World War II – combined with depleted infrastructure and a shrunken military.” Still, they don’t seem to have a problem with the idea of stimulus spending on infrastructure, just that the Obama spending was poorly targeted.

Steven Mnuchin, who will be President Trump’s Secretary of the Treasury, has said that “taxes, regulatory, trade, [and] infrastructure” will be among the new administration’s top priorities. According to Reuters, Mnuchin said that the Trump team is considering creation of an “infrastructure bank” to fund projects. Mnuchin is also considering issuing Treasury bonds with terms as long as 50 or 100 years, far beyond the 30-year term of current federal debt.

Infrastructure stimulus spending is not typically a strategy supported by conservative Republicans. When President Obama passed the American Recovery and Reinvestment Act of 2009, a $787 billion stimulus package, he did so with no Republican votes.

The support of stimulus spending by the Trump Administration may set up an early confrontation with Republicans in Congress. Many Republican congressmen are deficit hawks who campaigned on cutting federal spending and shrinking the government. Trump’s plans for more government spending will put these Republicans in a crossfire between Trump supporters and debt-conscious voters in their districts.

The conflict will provide a window into the character of the new Republican Party. Will conservative Republicans stand for the traditional Republican platform of less spending and smaller government or will they listen to the siren song of borrowing and spending from the incoming president?

Originally published on The Resurgent

America "racing toward judgment" as Shemitah draws to close

Jonathan Cahn / Hope of the World

As the 2014-2015 Shemitah year draws to a close, the world is once again falling into financial turmoil. The US stock market moved into correction territory last week and, in early trading this week, the Dow crashed more than 1,000 points before recovering to a mere 588 point loss. The current volatility in the market is not the only bad news of the current Shemitah, however. The Shemitah, which began last September, was ushered in with several ”shakings,” in the words of Rabbi Jonathan Cahn, who discovered the Shemitah pattern and wrote the book, “The Mystery of the Shemitah.”

"America is racing toward judgment," says Rabbi Jonathan Cahn in a video posted on You Tube. "Not one but multiple factors are converging."

The Shemitah began on September 24, 2014 with another stock market correction. CNN Money noted that the “September slump” did not last for the entire month of September. Instead, “starting on Monday, September 22, investors hit the pause button and kept hitting it for much of the rest of the month.” This coincided almost perfectly with the onset of the Shemitah.

Following on the heels of the stock market crash was a shaking of a different sort. On September 30, 2014, the CDC confirmed the first case of Ebola in the United States. Over the next few weeks, several other cases were identified around the country, prompting a state of near panic in many urban areas. The panic lasted throughout the month of October as more cases were diagnosed and the first patient, a Liberian immigrant, died. Spurring more fears, a number of medical professionals who had treated patients in the original outbreak in Africa flouted quarantines and traveled around New York and the country.

The stock market experienced a rough October as well. Both the S&P 500 and the Dow Jones Industrial Average experienced sharp downturns in mid-October. Although both indexes regained their losses over the next few weeks, Shemitahs have historically been marked by volatility in the markets and the current Shemitah is no exception.

 In early July, the Chinese stock market crashed after reaching a record high on June 12. On July 4, the Chinese government suspended the sale of stocks in an attempt to stave off losses. In spite of the Chinese government’s attempts to manipulate the market, the International Business Times reports that Chinese stocks lost more than eight percent of their value on what has come to be known as “China’s Black Monday.” Quartz notes that stock markets around Asia closed with sharp declines. Further, Zero Hedge listed 23 countries around the world where stock markets are currently crashing. Thomas DeMark, founder and CEO of DeMark Analytics, told CNBC that the Chinese stock market crash closely resembles the US crash of 1929 in which the stock market lost 50 percent of its value and the contagion spread around the world.

Other factors that may be contributing to the world’s economic woes are the collapse in oil prices, the Greek debt crisis and the Federal Reserve’s monetary policy. Holman Jenkins wrote in the Wall St. Journal that the Greek crisis has largely been resolved without Greece having to address its core problem of deficit spending. Reform of Europe’s welfare state has been kicked down the road and Europe’s debts will continue to mount.

Martin Feldstein, President Reagan’s chairman of the Council of Economic Advisors, wrote in the Wall St. Journal that some of the US market’s difficulty can be attributed to the Fed’s policy of low interest rates that dates back two seven-year Shemitah cycles to the September 11 attacks and the resulting stock market crash in 2001 on the last day of the Shemitah. The Fed kept interest rates low throughout the remainder of the Bush Administration which fed the real estate bubble that burst in 2008 on the last day of that Shemitah year. Feldstein notes that after the failure of President Obama’s 2009 stimulus, Fed Chairman Ben Bernanke promised to hold rates near zero for the long term. Low interest rates have also pushed investors into the stock market due to low yields on other investments. Recent articles have pointed out that with interest rates hovering near zero, the Fed has little room left to combat a new economic crisis and may even take rates into negative territory.

The confluence of bad economic news into a perfect storm scenario is compounded by the rejection of Judeo-Christian values and morals. The 2015 Shemitah has been hallmarked by a turning away from God. The most notable example of this is the Supreme Court decision to overturn the will of the people and thousands of years of tradition to redefine marriage. By the time the Supreme Court ruled on the Obergefell case, same sex marriage had become the law in a majority of the United States. In almost every state, the redefinition of marriage was imposed by a small clique of judges and not the voters of the state.

Also in the summer of 2015, a series of undercover Planned Parenthood videos unveiled the dark world of the abortion provider. The videos revealed the callous disregard for life among Planned Parenthood employees and the stark truth that the sale of body parts from aborted babies is a vital part of the organization’s business model. In one video, a former employee of a stem cell harvesting company accused Planned Parenthood, which receives federal government funding, of harvesting the brain of a baby whose heart was still beating. Contrary to the public face of abortion in which proponents deny the humanity of unborn babies by using the euphemism “fetus,” Planned Parenthood’s employees freely refer to “babies” on the videos as they joke about the killings. Even during the murder trial of abortion doctor Kermit Gosnell the horror of abortion has never been so clearly exhibited.

Symbolic of America’s rejection of God, a statue of Baphomet, a satanic deity, was unveiled in Detroit in July. The nine-foot tall statue was unveiled at what is purported to the “largest public satanic ceremony in history” according to Time.

A landmark event of the Shemitah that touches on both morality and policy is President Obama’s tentative nuclear deal with Iran. The deal marks not only a danger for the United States, since it fails to prevent Iran from developing nuclear weapons, but is a historic break between Israel and the United States. Since its birth in 1948, Israel and the United States have maintained close relations. The US was among the first countries to recognize the nation of Israel and the US provided valuable support to Israel during many of its wars for survival. Most notably, in the Yom Kippur War of 1973, it was resupply by the United States that helped Israel to survive a coordinated attack by its Arab neighbors.

The Iran deal changes the relationship between the two countries. Barack Obama has been more hostile to Israel than any other president. From the beginning of his administration, Obama pushed for a return to Israel’s almost indefensible pre-1967 borders. The deal with Iran will place the United States at odds with Israel as it provides financial support to the Iranians. The removal of sanctions and lack of inspections will make it easier for Iran to build nuclear weapons with which to threaten both Israel and the United States.

The 2015 Shemitah has been a momentous period. With three weeks left in the current Shemitah, which ends on September 13, there is the possibility of even more volatility and chaos. Secular analysts are predicting that the current financial unrest will continue for several months until markets find an equilibrium.

Rabbi Cahn believes that it is not too late to avert judgement. “I am led to call for a period of prayer, repentance and intercession for America, to end on Sept. 23, Yom Kippur," he says. "It is crucial the people of God come before Him now on the foundation of 2 Chronicles 7:14: 'If My people who are called by My name will humble themselves and pray and seek My face and turn from their evil ways, I will hear from heaven, I will forgive their sin, and I will heal their land.”

Polls: Obama changed America for worse

Barack Obama promised change in 2008. In 2012, it seems that many Americans are realizing that change is not always positive. Change can be for the better or for worse.

Unfortunately for voters, while he was campaigning, Barack Obama did not get into many specifics on how he would change America. His slogan, “Change we can believe in,” left people to fill in the blanks for themselves. For many voters, that seems to have led to a giant case of buyer’s remorse.

According to a new poll commissioned by The Hill, a political news site, 66 percent of likely voters agree that Barack Obama has kept his promise of “fundamentally transforming the United States of America.” The bad news for Obama is that 56 percent of those polled believe that Obama’s changes have been negative. Only 35 percent believe that Obama has had a positive impact on the country.

This is easy to understand when you consider some of the changes that Obama has wrought. He changed the unemployment rate from 7.8 percent in January 2009 to 8.2 percent today according to the Bureau of Labor Statistics. This change was the result of spending spree that changed the federal debt from $10.6 trillion in January 2009 to $15.8 trillion today according to Treasury Direct. When stymied by Congress, he changed the constitutional requirement that Congress make the laws by having agencies of the executive branch circumvent Congress and unilaterally enact new legislation. In launching a war in Libya, Obama changed from the traditional policy notifying Congress and seeking approval when going to war. Most notably, President Obama became the first president to change taxes from a source of revenue to a means of forcing American citizens to buy a private product. Obamacare also represented a change from his promise of no individual mandate and lower premiums according to CBS News.

The numbers in the Hill poll are similar to Rasmussen’s Right Direction or Wrong Track poll. In the most recent sampling, Rasmussen found that 62 percent believed the country was on the wrong track. Thirty-two percent disagreed. These polls are troubling for a president who is five months away from re-election and reflect a deep discontent with the president’s job performance even though his personal approval rating is higher.

Obama’s promise can seen as a promise kept, but Americans seem to have learned that not all change is for the better and that things can get worse. Perhaps this fall voters will seek more specifics from candidates and be less willing to accept generalities. Let the voter beware.

 

Read this article on Examiner.com:

http://www.examiner.com/article/poll-obama-changed-country-for-worse

Economist proposes “space alien” stimulus

In a tacit admission that the left is out of ideas on how to fix the economy, economist and New York Times columnist Paul Krugman recently proposed a new stimulus program in the form a military buildup to ward off an invasion by extraterrestrial aliens. Drawing upon the history of the Great Depression and an episode of “the Twilight Zone,” Krugman postulated on CNN that government spending on military hardware to combat aliens would revitalize the U.S. economy in short order. Krugman subscribes to the Keynesian belief that World War II and the debt-financed military buildup that followed finally ended the Great Depression after ten years of FDR’s debt-financed social programs failed to restart the economy.

In reality, the military buildup of the 1940’s and the New Deal stimulus programs were very similar. The military draft that removed hundreds of thousands of workers from unemployment rolls had civilian equivalents in the Civilian Conservation Corps, the Works Progress Administration and other New Deal government organizations that hired workers for make-work projects. Similarly, government orders for military hardware that busied factories were akin to New Deal construction projects commissioned by the Public Works Administration and the Civil Works Administration.

Krugman doesn’t actually believe that an alien attack is imminent. He merely favors a hoax to provide a rationale for spending:

“If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat - and really inflation and budget deficits took secondary place to that - this slump would be over in 18 months. And then if we discovered, oops, we made a mistake there aren't actually any space aliens.”

“There was a Twilight Zone episode like this, which scientists fake an alien threat in order to achieve world peace. Well, this time we need it in order to get some fiscal stimulus.”

Krugman, a Nobel Prize winning economist, misses several important points here. The most obvious is that the U.S. is already at war. We don’t have to invent an extraterrestrial enemy because we have a very real terrestrial enemy in the form of Islamic terrorist groups. The wars in Iraq and Afghanistan have caused wear and tear on military equipment. The government could spend money to replace and refurbish our existing military hardware, as well as purchasing more F-22 Raptor and F-35 Lightning II advanced technology fighters that would ensure air superiority against a new generation of high-tech Chinese and Russian fighters. The F-22 is a built by Lockheed Martin at its plant in Marietta, Ga. Presumably real world military spending is not large enough in Krugman’s eyes.

The second point that Krugman misses is that spending on WWII did not actually jumpstart the economy. The problem is that removing hundreds of thousands of idle workers from the economy and purchasing millions of dollars of tanks, aircraft, and other equipment is not a change that could be sustained indefinitely. When the war was over, as the armed forces demobilized these workers would likely return to the unemployment line and the factories would go idle if the government did not fund new New Deal programs to provide jobs and demand for material goods. In reality, this is not what happened.

In the Wall Street Journal, Burt Folsom, author of “New Deal or Raw Deal,” notes that Congress, led by Georgia Senator Walter F. George, rejected President Truman’s attempts to revive New Deal policies after the war. According to Folsom’s research, Congress reduced income tax rates across the board, cut the corporate tax rate, and repealed the Excess Profits Tax. According to tax.org, the tax reforms and reductions began even before the war ended with the Tax Adjustment Act and the Revenue Act of 1945. The Revenue Act of 1948 was smaller, but included more comprehensive and controversial reforms.

Senator George, a resident of Vienna, Ga. who served on the Senate Finance Committee at the time, is quoted by Folsom as saying that if the tax reform “has the effect which it is hoped it will have, it will so stimulate the expansion of business as to bring in a greater total  revenue." As a chart on USgovernmentrevenue.com shows, federal revenues increased dramatically in the 1950’s even though tax rates were lower than they had been during the New Deal and war years.

Finally, Krugman ignores the fact that federal debt levels today are much higher than they were at the onset of WWII. Data from USgovernmentspending.com reveals that the federal debt as a percentage of GDP is almost as high today as it was at the end of WWII, not the beginning. The government could afford to spend billions on tanks and armies in 1941 because, even after a decade of New Deal spending, the federal debt was less of a burden than it is today. If the U.S. tried to engage in another massive military buildup today, the debt would shortly become unmanageable and the result would either be a default or inflation (which Krugman also advocates).

Krugman’s idea of an anti-alien buildup is simply a sci-fi twist on the same old Keynesian policies that have failed to work for President Obama in the past. President Obama should instead follow Senator George’s example and enact broad-based, permanent tax reforms that would encourage businesses to invest.

Photo credit:  Vince DeVries/Wikimedia

Read this article on Examiner.com

http://www.examiner.com/conservative-in-atlanta/economist-proposes-space-alien-stimulus