The $26.4 billion Israel/Gaza et alia Security Supplemental Appropriations Act passed yesterday 366-58-0-7, with Nay votes from 21 Republicans

 The roll call vote is here.

The 21 Republicans voting Nay:

The $60.8 billion Ukraine Security Supplemental Appropriations Act passed yesterday 311-112-1-7, all the Nay votes being Republicans

 The roll call vote is here.

Just a hypothetical here: $60.8 billion / $1.3 billion per night of Russian air assaults (compare Iran attack on Israel) = 46 nights.

The $8.1 billion Indo-Pacific Security Supplemental Appropriation for Taiwan et alia passed yesterday 385-34-1-11, all the Nays being Republicans

 The roll call vote is here.

I would have reported in real time but Blogger had a major outage yesterday afternoon lasting several hours.

The US Senate just passed the funding bill

 CNN just reported:

The funding legislation was approved by a vote of 74-24 at 2:02 a.m. ET, more than two hours after the midnight ET deadline for passage of the critical legislation that was approved by the House on Friday. 

Compromise spending bill passes US House 286-134 bringing fiscal year 2024 federal discretionary spending to $1.659 trillion through September

 WASHINGTON — The House voted 286-134 on Friday to pass a sweeping $1.2 trillion government funding bill, sending it to the Senate just hours before the deadline to prevent a shutdown. ...

The bill, released early Thursday, funds the departments of Homeland Security, State, Labor, Defense, Health and Human Services and various other agencies. Together with the $459 billion bill passed earlier this month, it fully funds the federal government to the tune of $1.659 trillion through September, after months of stopgap bills and negotiations.

More here.

The Roll Call Vote is here, if you want to check how your representative voted. 

The argument is perennially NOT about deficit spending, but deficit spending on WHAT. 

The projected tax shortfall for all programs for fiscal 2024 is $1.582 trillion, more than half of which will be net interest expense of $0.870 trillion on the exploding national debt. Interest payments on what we have already borrowed now exceed defense outlays of $0.822 trillion.

CBO in early February estimated fiscal 2024 discretionary spending at $1.739 trillion, so today's bill "saves" a mere $80 billion off that.

Mandatory spending on Social Security, Medicare, Medicaid, etc. is estimated at $3.908 trillion for fiscal 2024.

It's obvious that spending should be cut and taxes raised, but no one has the courage for either.

They should just agree to do both and let the chips fall where they may. Everyone out here will be pissed, vote accordingly, and it would be a wash politically.

Current national debt is $34.5612 trillion and rising.

Bob Nardelli gets it

 "The general population will not be duped by this aversion [sic; read diversion] to try and blame inflation on corporate America. It starts at the raw materials, it starts at transportation, it starts at energy," former Home Depot and Chrysler CEO Bob Nardelli said on "Cavuto: Coast to Coast" Monday. "A whole host of things that are driving this up, wage increases." ...

"This is all about, I think, trying to buy votes. This is all about an administration that is out of control," he continued. "We have a strong bias towards spending versus having a conservative policy or a sustainable future."

More.

I'm so old I remember when politicians ran on less government, now it's less corrupt government lol

 

Less Corrupt, More Accountable Government Wanted

America's New Majority Project

 

This is so silly. Politicians buy voters with spending legislation. Right now they want to give families and businesses $70 billion in new tax credits, and to Ukraine, Israel, and Taiwan $95 billion in new defense aid.

You don't get $34 trillion in debt by accident.

We have the government we deserve. It's the voters who are corrupt.

Oooh, but that's a surer third rail statement than "I want to cut Social Security" ever was. You cannot insult the voters and get re-elected.

That's what pulpits used to be for, but no one goes there anymore. Somebody has to say it.

Smaller government means less money sloshing around to help your friends and hurt your enemies, which is what this is really all about.

Repent, and believe the gospel. The alternative is oblivion for the U. S. A.

We're $34 trillion in debt, so Congress unites to spend $70 billion more we don't have on "the children" and on "small business" because it's an election year

 You have the government you deserve.

Story here.

Government does this every single day, I don't see what the problem is

 Many Are Spending More Than They Earn, Dimming Financial Outlook

The three year and five month embarrassment of core inflation higher than the 10-year Treasury yield finally ended in August

 Yield for the 10-year US Treasury rose to an average 4.17% in August 2023 while core inflation year over year fell to 3.87% in August 2023.

This ends the 3-year 5-month run where core inflation exceeded the 10-year yield, something which has never happened in the data.

The only time core inflation outran the 10-year previously for a comparable period was in 1974 and 1975 when core inflation averaged 7.91% and 8.35% vs. the 10-year yield which averaged 7.56% and 7.99% respectively.

That lackadaisical response to inflation by the Federal Reserve under Arthur F. Burns (1970-1978) prefigured the 1980 resurgence of core inflation to 9.19%. Under his successor Paul Volcker, interest rates were hiked to unprecedented levels to curb inflation. The 10-year yield rose to an average of 13.92% in 1981 as a result.

The current fear is that the Powell Fed has set up the economy for a repeat of this awful period of inflation.

Whatever is said about it, there is no question that inflation is a benefit to the Federal government because it depends on borrowing to finance deficit spending and consequently the debt, now at an unprecedented $33 trillion. Inflation simply reduces that cost to the government over time by making the dollars previously borrowed worth less.

It is true that new borrowing costs much more, but the debt mountain mammoth in the living room is the more pressing problem. This is why the cognoscenti teach that inflation is a good thing.

Extending the duration of inflation at the currently relatively low level has been in the government's interest. The costs born by the public in the form of higher prices for goods, services, and borrowing are becoming routinized so that the voters are becoming inured to the deleterious effects for them while clueless of the benefits for the debt mongers. 

This is particularly the case for voters who have no memory of that horrible inflation which gave rise to the backlash represented by Ronald Reagan's election in 1980, and who now vastly outnumber those who still remember.

It should not be forgotten that Jimmy Carter got elected in 1976 anyway, after the Burns' inflation. The voters then took it all in stride, too, until they didn't.

Same as it ever was.

 

The debt ceiling compromise freezes spending in the next fiscal year about $400 billion too high, and does nothing to pay for the $4.9 trillion added to the debt over and above "normal" deficit spending

The Washington Examiner, here:

In exchange for a two-year hike in the federal borrowing limit, the legislation roughly freezes next year's spending at fiscal 2023 levels, followed by a 1% increase in 2025. The legislation also imposes some changes to work requirements for food stamps and will speed the development of energy projects with permitting reform.

Fiscal outlays for 2023 are projected to hit $5.792 trillion. Adjusted for inflation since 2019 that should be more like $5.385 trillion.

 

 

 

Meanwhile, deficit spending since 2019 through fiscal 2023 has added, will add, $8.5 trillion to the debt, which has been the solution to, and the cause of, all our problems.

We are not governed by serious people.

We have the government we deserve.

US Treasury Department in fiscal 2021 said US fiscal policy is unsustainable because debt to GDP will reach 700% by 2096

 Caused by deficit spending.

In other words, required spending by legislated programs is not being matched by required tax increases to fund that spending. The gap produces the deficits naturally year after year.

Eventually it goes to the moon.

 

Here.

Noted "bond king" Jeff Gundlach is unaware of the existence of the 27th Amendment, and wants to decrease bond supply to increase its value!

What a shock, huh? No deficit spending means no borrowing, and no new bonds, making the existing dwindling supply worth more and more!

Seriously, if we continued to pay interest on the debt out of current tax revenues as we do, and then amortized the debt principal of ~$32 trillion, you'd have to extract ~$3,212.85 in additional taxes every year for thirty years for every man, woman, and child alive now to have a hope of paying it off ($1.066 trillion per year).

Current federal receipts average in excess of $4 trillion already, so that's an increase of annual revenues to the federal government through taxation in excess of 25%.

About as likely as spending curbs.

Fake News from Drudge vs. Trump reminds me of Fake News from Rush Limbaugh for Trump: "Economy in same place as Great Recession..."

 Anyone with any brains can see that the economy is about where it was at the beginning of 2019, not where it was in 2009, at least on paper.

Rush was telling us for months that businesses were being destroyed by the lockdowns and that they would not recover. Now he's telling us "we can survive a massive unknown hit like this thing by the coronavirus" and calling for "even more stimulus", i.e. what Democrats always call for, spending money we don't have, which is anything but conservatism from "The Big Voice on the Right".

The entire GOP signed off on the massive deficit spending to purchase this V-shaped recovery Drudge doesn't want to recognize, but 8.4 million still don't have the full time work they had just a year ago. That's a massive hit which will take years to recover. As in 2009, however, older workers who lost their full time jobs this time around won't recover them either. Full time will recover only as population grows. 

Neither Drudge nor Rush Limbaugh think too much of the intelligence of their patrons. Their understanding is thimble-deep.

But neither do Democrats nor Republicans. They go into panic mode to preserve as much of the status quo as possible with bailout gimmicks, same as ever. And when the bailouts end, the dispossessed will face what they always face: disillusionment. 

Sad!

By Trump's own logic he and Congress should be ineligible for office in 2020 for upcoming deficit spending orgy

10 years after Santelli's rant against Obama's proposed bailout of your neighbor's mortgage, National Review pretends it was about deficit spending

You will search in vain in this article for the word "mortgage".

If the Tea Party had been about any one thing, it was about the moral hazard of bailouts. A sizeable minority of the American people perceived that bailouts made them chumps, dutifully following the rules and accepting their obligations while bankrupt businesses and bankrupt homeowners did neither. 

By Brian Riedl, long-time research fellow at the Heritage Foundation, the article illustrates better than anything how the interests of establishment conservatism co-opted the Tea Party movement in 2011, just as establishment Republicanism co-opted Trumpism in 2017.

"Let's steal this energy and make it about something else".

Every. Damn. Time. 

New Budget Deal Puts Final Nail in the Tea-Party Coffin:

Horrified by Washington spenders, CNBC’s Rick Santelli stood on the floor of the Chicago Mercantile Exchange on February 19, 2009, and called for a “tea party” to end the bailouts, stimulus payments, and red ink. Grassroots tea-party groups formed — further enraged by the later enactment of an expensive new Obamacare entitlement — and helped Republicans capture the House in 2010 with a stunning 63-seat pickup and also pick up seven Senate seats.

Noah Smith embraces the Trump narrative: "There’s no doubt that the U.S. economy is in a boom"

Here for Bloomberg.

After examining several indicators, which, however, are not unequivocal for their interpretation despite saying "no doubt", Noah Smith comes down on the side of improved sentiment as the cause of the current "boom".

On that we agree. There's a boom in sentiment.

The problem is, too many people are importing that improved sentiment into their reading of the data, and into their choice of the data.

For example, Smith focuses on job openings to unemployed, which is a tiny measure (6.66 million in June) of what's really going on in the labor market. But the broadest measures of unemployment still show 15.9 million unemployed, underemployed, and no longer counted in the labor force. There is still huge slack in the labor market, which is one reason why wages for the vast majority of workers are not rising like they would in a real economic boom (2.7% y/y in July vs. in the 4s in 2006/7).

Similarly Smith discusses the percent of population employed aged 25-54, but clearly misses that it's most definitely not "back to 2006 levels" as he claims (H1 2018 is at 79.2%, still below the 2006 average of 79.8% and also below the average of either half of 2006). The broadest measure of the percent employed, on the other hand, still shows a huge gap between now and the pre-Great Recession average when over 6 million more were employed than are at present (60.5% now vs. 62.9% then, on average).

The case is similar with domestic investment.

Smith chooses to highlight "Shares of gross domestic product: Gross private domestic investment: Fixed investment: Nonresidential (A008RE1Q156NBEA)" to show that "investment as a percentage of the economy is at about the level of the mid-2000s boom". But the current level in H1 2018 at 13.7% is also identical to H2 2014. Was that indicative of a boom? Did we blink and miss it? How about in H1 2008 when it was again at 13.7%? Was that indicative of a boom? If so, why did the economy then promptly crash in H2 2008?

A broader measure of domestic investment, however, "Shares of gross domestic product: Gross private domestic investment (A006RE1Q156NBEA)", shows us well off the 2006 peak and even the more recent 2015 level. Whatever we call what we have right now, the current 17.7% is still far below the 19.8% level of H1 2006, which itself failed to equal the boom level of the year 2000 (19.9%).

With all that cash unleashed by the tax reforms and sloshing around in the economy, one would think things would look a lot better than this, which simply shows that most of that money indeed went elsewhere.

GDP has been temporarily goosed by the tax reforms in concert with a fresh gusher of federal deficit spending. But those are one-offs. They will not, and cannot, be repeated over and over again in short succession.

We know what comes next.

Paying off the $18.1 trillion national debt in 30 years . . .

Financed at 3.5%, it would require annual payments of $977.4 billion to retire the $18.1 trillion national debt in 30 years.

This assumes deficit spending (projected to average $512 billion annually, already factoring in increasing revenues going forward to 2020) would cease in order to balance the books and cap the debt.

Together debt repayments and cessation of deficit spending imply cutting current allocations by a total of $1.5 trillion annually, leaving just $1.7 trillion to fund government outlays in fiscal 2015 projected to soar to $3.8 trillion.

Out of control and misplaced spending therefore amounts to 55% of projected outlays in fiscal 2015, or $2.1 trillion.

In the already low GDP environment, a 55% fiscal contraction is utterly unthinkable to anyone in either political party, the equivalent of an 8.5% hit to the current dollar GDP at $17.69 trillion.

The revenue projection for fiscal 2015 is just $3.2 trillion, but will be the highest ever.

Big Deal: Debt To GDP Ratio Comes In At 105%

The debt as of 4/24/13 was $16.7943 trillion. GDP in the latest report was $16.0102 trillion. So the one divided by the other yields 1.05, or 105%. To which I say, Big deal.

In other words, the current annualized national income no longer is sufficient to cover what we owe. But there is no situation in which anyone stops consuming and simply works for a year to pay off everything one owes. At this you'd last maybe 40 days if you were Jesus Christ, but trust me, you aren't Jesus Christ. This is not the way to look at it. Instead, we should look at the debt like a mortgage.

Interest payments on this ever-growing debt in fiscal 2012 came to $360 billion, implying an interest rate paid of a little more than 2%. This rate is artificial. It is the result of manipulation afforded to us by the Federal Reserve's deliberate policy we affectionately call ZIRP, zero interest rate policy, which pushes long term interest rates down into the cellar. A more realistic rate would be double that, 4%, about a half point higher than current averages for 30-year mortgages (call it an extra penalty for having less than AAA status if you want). So, if one were to treat the total public debt outstanding like a mortgage amortized over 30 years at 4% fixed, our "mortgage" payment to pay off the debt would be $80.304 billion monthly, or about $964 billion a year. And you'd have to stop deficit spending.

In the current spending environment, $964 billion annually is about 25% of current government outlays of $3.8 trillion. Current government receipts, however, have lagged the outlays by about $1 trillion annually, so the "mortgage" payment would be closer to 35% of income.

Responsible persons all over this country pay off mortgages with that percentage of income devoted to debt service, and they do it all the time. It's high time the federal government started acting like them. In order to do so, however, current spending apart from the "mortgage" payment would have to be cut $1.96 trillion annually, or 48%, to $1.84 trillion annually for all programs. (That squealing you hear is the sound of stuck pigs).

Somebody get on this right away.     

David Stockman Hates Everything About America, Except Cash

Just like, you guessed it, The New York Times!

He hates:

Crony capitalism, Keynesianism, imperialism, stimulus, social insurance, incumbency, the constitution, free elections, lobbying, deficit spending, the Fed's discount window, the FDIC, the Gramm-Leach-Bliley Act, quantitative easing, interest rate repression, and currencies in a race to the bottom.

But honestly, all he really hates are the new stock market highs.

"When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is."

Wah. Wah. Wah.

Read it all here.