Thursday, May 31, 2018

'Donald Trump Didn't Even Collude With The Republican Party in 2016!'

'Ve must get Donald Trump elected, dahlink!'
(first published in North State Journal 5/30/18)

Late last year, over drinks with a long-time veteran southern Republican political operative, he leaned over and fairly shouted:

‘Heckfire! Donald Trump didn’t even collude with the GOP to get elected in 2016! How could the Russians have put up with him long enough to ‘col-lood’ to beat Hillary Clinton?’

He has a point. Most of the money and media time spent in 2016 was decidedly against Donald Trump, not for him. How did hackers from Russia figure out how to overcome all that opposition to help him win, if in fact, they did?

The Mueller team reported the Russians spent $1.25 million per month which, when compared to the $2.2 billion that was spent from all sources on the presidential race, would account for maybe 0.5% of the total amount of money spent in 2016.

When you consider how much disinformation was flying around the internet from all sources from 2015 to 2016, heavily negative against Trump from Republicans and Hillary supporters alike, if the Russians disproportionately made a decisive impact with 0.5% of all money spent, they really were magicians to begin with.

Foreign involvement in any election is bad. In 2015, President Obama was accused of using taxpayer funds to meddle in the Israeli election of Prime Minister Netanyahu. That was ‘bad’ just as well.

The open channels of the internet make it possible for any hacker to interfere anywhere they want.

However, it is impossible for any single person on the globe to influence an American political campaign all by themselves due to that same degree of openness.

If the Russians figured out how to get ‘their’ candidate elected in America with the limited amount of funds they spent on fake Twitter accounts and ads against the avalanche of money that was spent to defeat Donald Trump from all sides, they should sell that secret potion. Every campaign manager, pollster and operative in America would pay millions for it.

Many people make voting decisions solely on name recognition. Others vote based on a candidate’s appearance and demeanor. If one candidate is more well-known than the other and they are more appealing, they usually win.

During any presidential election cycle, any number of factors can determine which candidate wins or not. Lack of enough money usually is the determining factor. A candidate who can’t buy enough TV or social media ads to tell voters who they are or why the other candidate is ‘so bad’ is probably going to lose.

General organizational skills such as calling voters or knocking on enough doors to get your people out to vote play important roles in every election.

What is the greatest ‘get-out-the-vote’ mechanism? Motivation on the part of voters. They are either highly motivated to vote for one person out of hope or against the other candidate out of fear. No amount of ‘fake’ Twitter accounts or ads can manufacture or defeat those waves of voter sentiment once they hit a crescendo.

The choice to ‘blame Russian hackers’ for Hillary Clinton’s defeat in 2016 came right from Hillary Clinton and her top advisors herself. Political reporters Jonathan Allen and Amie Parnes wrote in their book, ‘Shattered’, ‘…(Hillary’s) team coalesced around the idea that Russian hacking was the major unreported story of the campaign…’ less than 24 hours after her concession speech and they concocted a media strategy to spin her loss on them.

Not on anything she did wrong in the campaign.

Lo and behold, the media took the bait and swallowed it. We are now 1 year into the Mueller Investigation with no end in sight and close to $20 million of taxpayer money spent.

Russian hackers didn’t cost Hillary Clinton the 2016 election. She lost it fair and square. It is time for this version of the ‘long national nightmare’ to end.

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Wednesday, May 23, 2018

If Taxpayer Money Is Involved, Socialize The Upside And The Downside

(first published in North State Journal 5/23/18)
What is ‘welfare’ in the government sense anyway?

Merriam-Webster defines it as such: ‘aid in the form of money or necessities for those in need’.

This definition should be clarified with a friendly amendment: ‘..or who have the political clout to get elected officials use public taxpayer money to pay for what they want’.

Case in point: Should any public money be used to refurbish or replace Bank of America Stadium now that hedge fund billionaire David Tepper has purchased the NFL Carolina Panthers and Bank of America Stadium from Jerry Richardson?

From purely a philosophical musing viewpoint, the answer is no. Rich people are rich and will remain rich regardless of whether the average taxpayer antes up any tax dollar to help them pay for the stadium for the professional sports team.

They are ‘business people’. The NFL is a business. They are not investing in any professional franchise unless they are really confident they are going to make a profit when they sell it one day down the road.

Local municipal and state governments have been persuaded many times to obligate their constituents with user taxes or loan guarantees by the promise of more jobs created and economic growth generated from the ‘public-private partnership’ of building a professional sports stadium.

But the ‘public’ part of that partnership ends when the profits roll in. Then it is all ‘private’.

In 1995, former Washington Bullets, now Wizards, owner Abe Pollin privately financed the construction of the MCI Center, now Verizon Center, in the middle of downtown Washington, DC.

His personal risk-assumption and financing sparked a renewal and rebirth of downtown DC which still has momentum today.

Jack Kent Cooke privately financed the construction of The Forum for his NBA Los Angeles Lakers and the construction of Jack Kent Cooke Stadium, now FedEx Field in Landover, Maryland for his NFL Washington Redskins.

Successful businessmen used to be proud to be able to finance their own football stadiums on their own without taxpayer funding, or ‘corporate welfare’ as it is now known.

Rich business people didn’t get that way by not being smart and savvy. They understand financial and political leverage and they use it to lower their out-of-pocket costs in any business transaction.

Including the purchase of professional sports franchises and construction of new stadiums.

If they are going to use leverage to get a lower cost for their private investment, shouldn’t local municipalities use their financial and political leverage to get more in return if they are going to do it anyway?

Why not ask for a set-aside of say 10,000 seats per game for a lottery for any taxpayer who wants to attend an NFL game? Hundreds of thousands of Mecklenburg County residents probably have never attended a Panthers home game in the last 22 years. If they are on the hook for any public funding in any way, shouldn’t they get to go to one game for free in return for their investment of public taxed dollars?

If a locality floats a tax-exempt or general obligation bond to help build a stadium, whether those bonds are retired quickly by PSL licenses or not, shouldn’t they be considered part of the ‘ownership’ group in some way?

Perhaps the locality should ask for a 10% convertible ownership stake in the franchise so that when it is sold for $10 billion 25 years for now, $1 billion will be made available for the local budgets to build new schools, pay teachers more or pave the darn local roads.

If elected officials are going to be sold on ‘public/private partnerships’ for professional sports, why not ‘socialize the upside’ as well as the downside?

Or follow the lead of Abe Pollin and Jack Kent Cooke and privatize both sides of the equation.

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Wednesday, May 16, 2018

You Deserve A Gold Medal!

(first published in North State Journal 5/16/18)

CBO estimated that the federal government collected a record amount of your money, er, ‘taxes’, in April, 2018, $515 billion, a new all-time record!

Congratulations!  Don’t you feel like you should get a gold medal or something? How about a Congressional Order of Merit to thank you for paying for the programs everyone wants?

$515 billion in taxes collected is $59 billion, or 13%, higher than April, 2017. Individual income and payroll tax collection was $73 billion higher, or 20%, than 1 year ago. Final payments for taxes in April was $60 billion higher than April a year ago.

We collected more tax revenue income from individuals in April, 2018 than we ever have in any single month in the 229-year history of the United States of America.

Despite this record influx of tax revenue to the US Treasury, the budget deficit for the first seven months of FY 2018 went UP by $37 billion over the same period in 2017.

How can that possibly be?

More federal intake of taxes will never balance the budget as long as Congress and Presidents spend more money quicker at a higher rate.

Take a look at the makeup of all layers and levels of taxes paid to Washington in 2016:

Those are the only ways to squeeze blood out of your turnip via tax policy. So far, that is.

More money going to Washington from your pocket or checking account either through economic growth or higher tax rates is the same thing: More tax revenue.

More tax collection doesn’t matter if Washington continues to spend money like drunken sailors.

Which, as Ronald Reagan said, was an insult to all drunken sailors.

Here is why budget deficits have gone up this year in spite of record tax revenue collection in April:

‘Outlays for the first 7 months of FY 2018 were up $121 billion or 5% over the same period in 2017’ according to CBO'.

Spending for military programs is up 5% due to recent bills passed by Congress and signed by
President Trump. Homeland Security spending is up $17 billion or 59% due to disaster relief efforts. Social Security spending is up $23 billion or 4% because of COLA inflation adjustments and more beneficiaries retiring.

The ‘scary’ increase over the first 7 months of FY 2018 was in outlays for net interest on the public debt. Net interest costs rose $25 billion or 14% because of higher interest rates and adjustments upwards for their inflation-protected securities issued.

Interest rates are still low by historical standards. We know from history that the one thing no government has ever been able to manage fully has been when inflation fears get out of hand and then interest rates escalate to accommodate for those inflation fears.

As recently as 1979-1981, inflation reached 12% in the United States and treasury bill rates peaked at 14.5%. 14.5% interest rates on current national debt would mean $2.175 trillion out of our $4.2 trillion federal budget would go solely to pay holders of US bonds.

Will this superior generation of tax revenue continue to grow for the rest of the year?

Maybe. Perhaps. Some of tax collection depends on timing of payments due to holidays and tax considerations.

However, if the Trump/GOP tax cuts work perfectly and the economy continues to grow robustly, we might see a 10% increase in tax revenue collection for the rest of the year.

But that would only generate $333 billion more in surprise surplus revenue over the course of the year. At current levels of spending, we would still have over $500 billion in deficit-financing for the rest of the year.

The key to fiscal and financial sanity is through serious Congressional control of spending to below 3% annual growth per year. Forever.

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Wednesday, May 9, 2018

'Happy Birthday Karl Marx!' (?)

(first published in North State Journal 5/9/18)

May 5th was the 200th anniversary of the birth of Karl Marx.

He was celebrated and toasted in many circles.

The New York Times published an essay titled “Happy Birthday, Karl Marx! You Were Right!”. Bernie Sanders supporters sported bumper stickers during the 2016 campaign that read ‘Welcome To The Terminal Stages of Capitalism!’

22% of millennials today have a favorable view of Marx. 50% say they would rather live in a communist or socialist country than under capitalism.

While extolling the so-called ‘virtues’ of Marxism, Marx apologists somehow always fail to include the historical fact that 150 million or so innocent citizens have been murdered under diabolical Marxist communist dictators such as Stalin, Mao Tse-tung and Pol Pot.

Which begs the question: “If communism is so great, why do communist dictators have to kill so many millions of people to keep it intact?”

Americans do not kill or imprison people if they want to leave the United States voluntarily to live somewhere else. They just leave. Unlike from China, Cuba or North Korea.

If someone chooses to go off the grid to live off the land or in a commune in the US, no one from the government will try to force them back into corporate life and punch a time clock. Capitalism doesn’t use a police state to force a citizen to work as has been the case in many communist countries.

The problem arises when people who think communism is so great that everyone should be forced to live under it. ‘Voluntary’ communism is fine if people want to share resources and live non-materialistic lives together. ‘Forced’ communism under someone else’s rule goes against the very freedoms we sadly take for granted in 2018 America.

Consider the following tenets from the ‘Communist Manifesto’ published in 1848 by Marx and Engels:

  • “abolition of property in land” 
  • “a heavy progressive or graduated income tax” 
  • “abolition of all right of inheritance” 
  • “centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly” 
  • “centralization of the means of communication and transport in the hands of the state”

Sounds strangely similar to many of the Progressive or Bernie Sanders socialist platforms in the last election, doesn’t it?

Contrast this with the philosophy of freedom put forth by John Locke, Adam Smith and Thomas Paine well before Marx that resulted in the US Constitution. Property rights, intellectual and copyright protection, anti-monopoly laws, ability to build wealth and pass along to heirs in spite of a high estate tax, decentralization of decision-making and financial services down to the individual level, not in Washington or New York City, are central tenets of our American way of life and the complete opposite of what Marxist doctrine would allow.

Millennials should very carefully reconsider their infatuation and dalliance with Marxism. Chances are very high that the person who takes over control of any ‘Marxist Utopia’ would shut down a massive range of freedom of choice to stay in power.

Do you like Twitter? Marxist regimes hate Twitter. Too much ungovernable information flying around all the time.

Do you like Uber? What if Marxists decide that everyone has to use the ‘Federal Taxi Cab Service’ (FTCS) instead so they ban Uber and make everyone pay the same fare and ride in the same 1970s Crown Victoria model automobiles so everyone will be ‘equal’?

Karl Marx wrote for a different time and a different era. Mindless adoption of the tenets of Marxism without understanding the violence and loss of freedom for everyone that comes with Marxist governance is a dangerous proposition.

Maybe by the 300th anniversary of his birth in 2118, the world will have learned those sad lessons and leave his philosophy on the trash heap of history and not celebrate them in any quarter around the globe.

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Wednesday, May 2, 2018

Historically Average Economic Growth Will Solve Everything

(first published in North State Journal 5/2/18)
If you are despondent about the state of modern American politics and the inability of both parties to engage in serious bipartisan efforts to balance our budget and start to dig out from underneath the Himalayan mountain of debt we are building, never fear:

There is a way to get out from under it all without Congress ever taking any congressional action whatsoever: return to historically average real economic growth of 3% per year in the United States for the next 30 years.

3% real economic growth is not far from our historical average of 3.5% real economic growth in the US since World War II. A combination of invention, patent and copyright protection, productivity gains and freedom has fueled the massive expansion of economic opportunity and advancement for millions of Americans since 1945.

If a switch could be turned on to spit out a guaranteed 3% rate of annual real economic growth in the economy, Congress could adjourn until the year 2047 and all of our economic and fiscal problems would be solved.

Including our exploding national debt.

Congress would not have to pass any new tax laws; make any spending changes; start any new entitlement programs; or even attempt any politically painful efforts to reform the existing entitlement programs, Medicare, Medicaid and Social Security.

Just let the economy grow at or above the 3% real rate of growth annually.

The Congressional Budget Office recently published their April update to the Budget and Economic Outlook from 2018-2028.

Federal debt held by the public is expected to reach 100% of GDP by 2028 under current assumptions.

‘Debt held by the public’ is the only debt CBO recognizes as being ‘economically significant’ since it has to be serviced by monthly interest payments to holders of debt instruments. CBO does not recognize intra-governmental debt as being economically significant, mostly in Social Security, since interest on such debt doesn’t get paid each month but is rather ‘imputed’ and will be paid later by higher taxes or reduced spending.

CBO forecasts a bump up in ‘real’ economic growth this year and next but sees growth falling long-term back to the 1.9% average annual growth rates we saw under President Obama.

Stephen Moore, an economist at the Heritage Foundation and advisor to the Trump Administration, says real GDP growth rates should far exceed 1.9% per year as long as Congress and Administrations do not throw a wet blanket on the economy with higher taxes and more regulations.

He used CBO data to show what average economic growth rates of 3% annually could do to our national debt over time. Debt held by the public could fall to a relatively ‘measly’ 50% of GDP in 2047 albeit at a level of about $32 trillion in an economy of $64 trillion.

Even if you don’t like President Trump or Republicans in general, you should be pulling for the recently passed tax cut package and the economy to work beyond everyone’s wildest dreams. For the next 30 years really.


Because there is only one other way to pay down national debt if Congress will not address the rise in the cost of entitlements or raise taxes to balance the budget:

Higher inflation.

For centuries, kings, dictators and republics have used inflation to pay down national debt with cheaper currency over very long periods of time. European countries have only recently paid off debts incurred from World War I with money that is not worth anywhere near what it was worth before The Great War.

Higher inflation hits the poor and elderly the hardest every time it happens.

Real economic growth over 3% per year for the next 3 decades might be the only way out of the long-term American debt trap. Especially if Congress does nothing to curtail entitlement spending.

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