(A) FISCAL POLICY

By Joseph C. Sternberg - The truth is much more complex, and politically challenging: While some other economies suppress domestic consumption and subsidize export production, Americans choose to do almost exactly the opposite. Through political choices such as suppressing energy production and distribution, or permitting red tape and the like, or any number of other policy foibles, we make it much harder than it otherwise would be to produce things in the U.S. Meanwhile, you can’t take a step in America without tripping over a consumption subsidy. Most glaring, though, are our entitlements. Social Security, Medicare and Medicaid, not to...

By Phil Gramm and Jodey Arrington - Means-tested social-welfare spending totaled $1.6 trillion in 2023. Welfare spending now absorbs an astonishing 72.6% of unobligated general revenue (total revenue net of Social Security and Medicare payroll taxes and premiums and mandatory interest on the public debt) and is larger than the claims against unobligated general revenue by Social Security (4.1%), Medicare (23.5%) and defense (37.2%) combined. Read More

By The Editorial Board - The Wall Street Journal - Sen. Joe Manchin’s public support Sunday for at least $2 trillion in new spending in a partisan budget bill is a huge win for the political left. This means a giant tax-and-spend bill this year is likely, and the biggest expansion of the entitlement state since the 1960s is now possible. The entitlements are by far the biggest long-term economic threat from the Biden agenda. Tax increases can be repealed by a future Congress. Spending on infrastructure will slow as funding falls. The courts may block his racial preferences. But...

By John F. Cogan - The seven-decade-long growth of entitlements and the pandemic response are the product of expansionary forces that operate on Congress regardless of who is in charge. Throughout history, the most potent force has been the equally worthy claim. The claim originates from a well-meaning impulse to treat all similarly situated persons equally under the law. Here’s how it works. When first enacted, entitlement benefits are usually confined to a narrow group of worthy individuals. As time passes, groups of excluded individuals claim that they are no less deserving of aid. Pressure is brought by, or on...

By Phil Gramm and John Early - Real government transfer payments to the bottom 20% of household earners surged by 269% between 1967 and 2017, while middle-income households saw their real earnings after taxes rise by only 154% during the same period. That has largely equalized the income of the bottom 60% of Americans. This government-created equality has caused the labor-force participation rate to collapse among working-age people in low-income households and unleashed a populist realignment that is unraveling the coalition that has dominated American politics since the 1930s. Read More

By Phil Gramm and John Early - The Census Bureau fails to count two-thirds of all government transfer payments to households in the income numbers it uses to calculate not only poverty levels but also income inequality and income growth. In addition to not counting refundable tax credits, which are paid by checks from the U.S. Treasury, the official Census Bureau measure doesn’t count food stamps, Medicaid, the Children’s Health Insurance Program, rent subsidies, energy subsidies and health-insurance subsidies under the Affordable Care Act. In total, benefits provided in more than 100 other federal, state and local transfer payments aren’t...

By Andy Kessler - A superb short lesson in basic economics Read More

By Paul Ryan - U.S. fiscal policy is on a collision course with monetary policy. The economic devastation resulting from a debt and currency crisis could inflict enormous—possibly irreparable—damage. Predicting precisely when a huge debt and high deficits will unleash economic disaster is difficult. The dollar’s status as the world’s reserve currency gives the U.S. unique advantages, but no country can defy the laws of economic gravity forever. The U.S. has run up large budget deficits and debts before, but those moments of national emergency, such as world wars or global financial crises, were usually—at least until recently—followed by periods...