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Trump’s tax plan

Yesterday, President Trump outlined his tax plan. Key features:

  • Slightly lower personal income tax rates. (Top rate from near-40% to 35%.)
  • Eliminating almost all income tax deductions, except mortgage interest and charitable contributions. (No more deduction for your State or property taxes, among other things.) Increase in the “standard deduction”.
  • Much lower corporate income tax rates. (Top rate from 35%, one of the world’s highest, to 15%.)
  • A one-time tax on overseas business profits. (That haven’t been repatriated to the U.S. Apple has a lot.)
  • A “territorial system” where future profits that corporations earn abroad, are not taxed.
  • Repealing a bunch of taxes and complications, most notably the Alternative Minimum Tax (AMT) and the estate tax.

Of course, Congress still has to chew on it.

Taking Trump’s proposals by themselves, I have little objection. Rates should be lower. High income taxes are a form of slavery. Corporate income taxes are stupid because they are an indirect, distorted sales tax (that is, a tax paid ultimately by consumers). Estate taxes destroy many small businesses (forcing families to liquidate the business in order to pay the 50% tax or whatever).

Nonetheless, I can’t praise this plan. Because it will reduce revenues at first, without being matched by spending cuts. Our budget will come no closer to balance.

President Obama already doubled the U.S. national debt in his 8 years, from roughly $10 trillion to roughly $20 trillion, for an average real annual deficit around $1.25 trillion. Is Trump going to beat Obama’s record? I sure hope not.

This is an important point. The true level of taxation is the government’s spending level. All spending must be paid for, one way or another. There are 3 possibilities.

  1. Overt taxes.
  2. Borrowing. This is a covert tax, a tax on the future (when either the debt must be repudiated, or more and more government revenues must be diverted to servicing it).
  3. Money-printing. Another hidden tax, this time on the real value (the purchasing power) of everyone’s wages and savings. Also known as “inflation”.

So really, it isn’t a tax cut unless it’s a spending cut also. Trump wants to cut the overt taxes. So, what? Without spending cuts, it’s only a corresponding increase in the hidden taxes: borrowing and/or money-printing.

And what happens when we add (say) a Trump infrastructure spending package and a Syria or North Korea war on top of that? More of the hidden taxes: borrowing and/or money-printing.

Obama Debt Roundup

I meant to do this awhile back, updating previous posts in the series.

When President Obama left office on January 20, 2017, the U.S. national debt was $19.9 trillion. ($14.4 trillion held by the public; $5.5 trillion “intragovernmental”, for example, Treasury bonds held by Social Security.)

When Obama took office on January 20, 2009, the U.S. national debt was $10.6 trillion. ($6.3 trillion held by the public; $4.3 intragovernmental)

Obama more-than-doubled the part of the U.S. national debt that everyone agrees is important (what’s “held by the public”). And he nearly doubled the total.

And for what? Eight years of the weakest economy “recovery” on record.

Serving them right

On certain issues, leftist harping is especially odious. One is the minimum wage.

Anyone who has met a payroll knows that, when higher wages are simply dictated from on high, then employees (or hours or salaries) must be cut back elsewhere – assuming the business can survive at all. It’s math. We’ve seen it before,

Leftists like to deny math and other facts of business and economics. What makes it odious is, they’re also smug about it. It isn’t just their ignorance; it’s their aggressive pride in staying ignorant.

Via HotAir, now a study confirms that San Francisco’s minimum wage does indeed injure the businesses and workers of that city.

San Francisco’s higher minimum wage is causing an increasing number of restaurants to go out of business even before it is fully phased in, a new study by the Harvard Business School found.

The closings were concentrated among struggling, lower-rated restaurants. The higher minimum also caused fewer new restaurants to open, it found.

“We provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit,” report Dara Lee and Michael Luca, authors of “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit.” The study used as a case study San Francisco, which has an estimated 6,000 restaurants in the Bay Area and is ratcheting up its minimum wage.

So, Nancy Pelosi and her fellow limousine-socialists are looking at fewer restaurant selections for themselves – and more unemployed people. Do they understand that? Or even notice it?

There is only one time when the minimum wage doesn’t hurt employment: When it’s low enough, in real terms, to be ineffectual. For example, if we have a period of inflation – and no minimum wage increases – then its real value will go down, and employers can afford to hire the low-end workers again. But the higher the minimum wage is, in real terms: the more low-end workers can’t get work.

Democrats Appalled That Policy Achieved Desired Results

Posted by V the K at 7:13 pm - February 26, 2017.
Filed under: Economy

The Democrat-Run city of Philadelphia passed a massive tax on beverages last year, to the cheers and applause of the Democrat Media Complex and left-wingers everywhere. However, increasing the cost of these beverages by 100% has had economic consequences.

Two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30 percent to 50 percent drop in beverage sales and are planning for layoffs.

One of the city’s largest distributors says it will cut 20 percent of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring.

This is what they wanted, right? To get people … in particular, poor people… to stop drinking beverages they didn’t approve of.

But now, the same people who passed the tax are getting all nasty about the effects of their tax.

“I didn’t think it was possible for the soda industry to be any greedier,” Kenney said in an emailed statement. “ … They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women’s jobs rather than marginally reduce their seven figure bonuses.”

So, these Democrat geniuses passed a massive tax increase with the intention that by making soda less expensive, people would consume less of it. Now, they are feigning outrage that the tax is actually making soda more expensive and people are consuming less of it. But businesses, I guess, are supposed to just eat their losses and not realign their workforces in response?

This is like the people who gleefully passed minimum wage hikes and are wondering why all the restaurants are closing.

 

The Experts Called It Wrong

Posted by V the K at 10:01 am - January 7, 2017.
Filed under: Economy

What the Economic Experts Said Would Happen If BREXIT Passed: “In the run-up to Britain’s historic vote on whether to leave the EU, the consensus among economists was clear: Brexit will hurt growth. Even many committed supporters acknowledged the prospect of a short-term economic hit.”

What Actually Happened: “Britain ended last year as the strongest of the world’s advanced economies with growth accelerating in the six months after the Brexit vote.”

One is almost tempted to believe that economists prior to BREXIT were trying to hype gloomy scenarios in order to encourage the outcome demanded by those with whom they were in political alignment.

But that could never happen, right? Because economists are scientists, and scientists are never influenced by politics at all.

Macy’s and Sears Closing Stores as Old Retail Model Fails

Posted by V the K at 10:25 am - January 5, 2017.
Filed under: Economy

Macy’s yesterday announced it was closing a whole bunch of stores across the country. Sears is rumored to be on the edge of total collapse. Management at both companies is blaming the internet for their travails.

I spent some time in Macy’s and Sears over the holiday shopping season. I don’t think their problem is competition with online retailers. I think a lot of it is their merchandise just isn’t appealing. (In addition to Christmas shopping, I’m renovating a 5,000 SF church, so I need all kinds of stuff.) Their retail model is dated, especially Sears which just seems to pile up stuff haphazardly throughout their stores. It’s just not fun shopping in a store where it looks like no one gives a crap. It probably didn’t help Macy’s that they dropped their Donald Trump line of menswear (because the management assumed since they hated Trump, everybody else did too), or that Sears outsourced production of Craftsman tools to China.

I’m not an expert in “Retail Science,” but if I were in charge of either chain, my strategy would be to fall back and regroup. Forget about being a national retailer for a while and become a strong regional retailer. Hire local people as buyers and tailor inventory to regional tastes. I would also invest in the ‘shopping experience.’ One of the reason chains like Wegmans, Publix, and Nordstrom seem to weather the change is that they make coming into their stores a pleasing experience.

I’m an outlier, but I don’t think the internet spells doom for all brick-and-mortar retailers. But the companies that run them need to recognize that shopping habits have changed. Shopping at a store in the mall is no longer a necessity, so you better give people a reason to come out and recognize that shopping patterns have changed. If I am shopping for bed linens, I want to be able to touch and feel them. I also want a pretty big selection to choose from. OTOH, if I am shopping for power tools, then I’m going to go online, read reviews, and go for the best value.  There are also things I just want right away, and don’t want to wait for delivery of. e.g. If I’m painting a room, I’m going to buy brushes and tape locally. That kind of stuff.

So, clean up your damn stores, have better merchandise, and teach your employees to be nice but not pushy, and you’ll get through this.

An Objectivist Perspective on ‘It’s a Wonderful Life’

Posted by V the K at 2:31 pm - December 10, 2016.
Filed under: Economy,Holidays

Tom Mullen at the Foundation for Economic Education has an interesting (and quite supportable) perspective on Frank Capra’s enduring holiday public domain classic: George Bailey was a huckster running a socialist Ponzi scheme and playing his customers for chumps. (Bailey Building and Loan being sort of the Bedford Falls version of OneUnited Bank). The real hero of ‘It’s a Wonderful Life’ was Old Man Potter.

The inescapable truth is Potter is wealthy because he provides a product that most satisfies his customers’ preferences for quality and price. If there were an opportunity to provide a higher quality product at a lower price than Potter was charging, a competitor would do so and take market share away from Potter, until Potter either raised his quality, lowered his price, or both.

The Baileys burn with resentment that so many residents of Bedford Falls prudently choose to live in Potter’s less expensive housing than buy a house they can’t afford, financed by the Baileys’ Ponzi scheme. Thus, even after shirking their fiduciary duty to run the business properly, the Baileys spend decades assaulting Potter’s character in a transparent attempt to lure away his customers.

Without Potter, a large portion of Bedford Falls would be unemployed. When the Depression hits and the Bailey Building and Loan is exposed for the fractional reserve fraud it is, Potter offers to come to the rescue with a generous offer to buy out its customers. It is noteworthy there is a run on the Bailey Building and Loan and the local bank, but Potter is financially secure enough to save them both, proving once again he is the only honorable businessman in the film.

Read the whole thing.

its_a_wonderful_life

My Brief, Inexpert Opinion on the Carrier Jobs Deal

Posted by V the K at 10:47 am - December 3, 2016.
Filed under: Economy

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I’ve been reading a lot of discussion in comment threads about the Trump-Pence deal that saved 1,000 manufacturing jobs at the Carrier Air Conditioning manufacturing plant in Indiana. A lot of people are attacking the tax relief as “crony capitalism,” (even those who were perfectly fine with the billions Obama pumped into crony green energy companies like Solyndra) while others praise that it’s the first small step in Trump’s program to “Make America Great Again.” I side more toward the latter camp. Carrier is a small PR win that can be leveraged into a broader program of tax and regulatory form that will be good for the economy. I hope that’s what Trump is planning.

If you remember, Obama mocked the idea that the 1,400  job the Carrier Air Conditioning jobs could ever be saved. He would have chosen instead to fall back on the “job training” and more welfare. Handouts and Government spending are the lazy man’s solution. Job training programs are not very effective, but they keep left-wing bureaucrats employed. The view of the left is too often, “Oh, you didn’t want those icky manufacturing jobs anyway, We’ll train you to polish windmills and coordinate safe spaces.”  Or, as they call them, “The jobs of tomorrow.”

“Climate of Hate” update again

I hope future readers (if any) realize that the title is ironic. Left-liberals claim that we’re living in a climate of hate. If we are: It’s the hatred that is spewed by America’s Left.

First: Yesterday, President Obama clarified that he will NOT call off the anti-Trump protestors.

“I would not advise people who feel strongly or are concerned about some of the issues that have been raised over the course of the campaign, I would not advise them to be silent,” Obama said during a joint news conference with German Chancellor Angela Merkel.

Obama said protests are just something Trump would have to get used to as the leader of the free world.

“I’ve been the subject of protests during the course of my eight years,” he said. “And I suspect that there’s not a president in our history that hasn’t been subject to these protests.”

…Obama [said] that the right of free speech should be exercised…

Let’s be clear: This is beyond baloney. Obama never faced protests where conservatives smashed windows, set fires, and physically attacked his supporters in the streets. Destroying property and people isn’t “free speech”.

As lefties told everyone last spring, when the Left’s paid agitators were trying to foment violence at Trump rallies: The leader’s duty to denounce the violence and insist on peaceful speech/protest from his supporters. That is Obama’s duty, now. Once more, the clown Obama disgraces America and himself.

And by the way: Obama didn’t face protestors in any number, until long after he was sworn in and did some (bad) things. While we’re at it, Merkel’s Germany does not let German citizens have free speech. The article describes Germans who were threatened with jail for criticizing Germany’s refugee influx on social media. Pathetic!

Some other items:

Progressives Fret Over “Bisexual Wage Gap”

Oh, Good Lord.

Bisexual men and women are paid less for doing the same jobs than similarly qualified heterosexual men and women, according to Indiana University research that breaks new ground by treating bisexual individuals as distinct from gay men and lesbians in the workplace.

What the left is concerned about: Alleged pay disparities for a tiny population defined by sexual proclivity. (How does an employer even know an employee is bisexual unless the employee makes a point of it?)

What the left is not concerned about: Millions of Americans losing manufacturing and mining jobs due to overzealous Government regulations. Millions more Americans having their wages driven down by the mass importation of cheap foreign labor.

The post-election vibe coming from the Democrats seems to be, “Do we have to pretend to start caring about working class voters again? Gross.”

Monday humor

Powerline has collected a string of funny graphics.

This was my fav:

Paul Krugman telling anti-Trump rioters to stop breaking windows or they will help the Trump economy

(The reference, of course, is to the Broken Window Fallacy of economics, which neo-Keynesians like Paul Krugman constantly fall into.)

Midnight in America

That dark title comes from Peter Schiff, the investment analyst and libertarian ninja. His article’s conclusion:

Ronald Reagan was the last Republican president who was swept into office promising great change. He made good on his “Morning in America” promises to cut taxes and regulations. But he failed in his promises to reduce spending. …[and now after others did even worse,] the economy of 2016 has far deeper problems than the economy of 1980. Reagan’s morning now looks more like Trump’s midnight.

Trump did not make this mess, but he will likely be in office to clean it up.

The question is: Will President-Elect Trump be able or willing to clean it up? As Schiff puts it:

…as bleak as the picture Trump painted of the current state of the U.S. economy, it was not bleak enough. Before things can actually get better, they must first be allowed to get much worse. Decades of government promises to supply voters with benefits taxpayers can’t afford must be broken, starting with many of the promises Trump made himself to get elected.

(Emphasis added) That has been my chief criticism of Romney (in 2012) and of Trump all along: Although they were “truthier” with the voters than their Democratic opponents, they still didn’t tell voters nearly enough of the truth.

After eight years of President Obama, we now have a national debt of $19.8 trillion by official figures; and something far north of $100 trillion when you include the “unfunded liabilities” (the future benefits promises that the government should report, under proper accounting standards – and does not). States, and especially their pension funds, also face a great crisis where they won’t come close to meeting their future promises. This is all very different from when Reagan took office.

Based on his speeches about “infrastructure” spending and his past track record, Trump’s first instinct might be to run up the U.S. debt up to even greater heights than Obama has. But at some point, Trump’s deficit spending will hit a wall: a full-on recession (it’s overdue) and a new financial crisis, wherein world markets simply won’t allow the United States to carry on as before.

What happens then? Will Trump give Americans the bad news about serious cuts to their benefits and hopes? Or will Trump flounder, protect special interests – maybe hyperinflate the dollar – and allow events to destroy him and us?

Anyway, it’s been fun to watch the left-wing butthurt over President-Elect Trump these last few days; but realism compels me to start being a wet blanket again. America’s problems, especially its debt problems, are beyond anything that even Trump had acknowledged.

He won’t be able to fix them by magic. And in a way, left-liberals are right: the next four years will be awful, for many.

Post-Trump

Good article from David Harsanyi, Democrats Have Only Themselves To Blame For Trump. A taste:

In all their vast coverage of agitated right-wingers, it may have escaped the attention of many in the media that over the past eight years the Democratic Party has moved dramatically to the left on an array of issues. It’s now a party of cultural imperialists and economic technocrats who want to rule through fiat. It is a party more comfortable coercing Americans who see the world differently than in convincing them. It is a movement propelled by a liberal punditry that’s stopped debating and resorted to smearing millions they disagree with.

And now, I’ll venture two predictions.

First, Hillary is done. You could say she’s young enough to run again. I say that she’s been hiding serious health issues (perhaps a contributing reason for the 10-hour delay in her concession speech). And under President Trump, she’ll be facing investigation for her long-standing corruption. Her balance of incentives will have shifted: it will be better for her to try to gain public sympathy, by playing the Brave Victim of Harrowing Illness. Which, shock of shocks, might even be somewhat truthful of her.

Next, media coverage of the economy will turn very negative. The economy has been quite poor for the last 8 years. The real unemployment rate, for example, is over 11%; not 4.9% as reported officially. The discrepancy arises from the MASSIVE drop in “labor force participation”, under President Obama. During his 8 years, tens of millions of Americans have given up even looking for a job. And once they stop looking, yup, they no longer count as unemployed.

That’s a scandal. And the media had zero interest in looking into it, because the answers would have reflected badly on Obama and Hillary. But, because (and only because) Trump will be President, the media will now discover this scandal and change their tune.

Another example: The economists and statisticians, I predict, will discover that the U.S. economy is in a recession. Not because the economy gets so much worse under Trump (although it might at first, if the current market-bubbles pop). Rather, because the economy has already been in a recession or close to it; and in order to nail President Trump, government-funded statisticians and talkers will now want to emphasize the bad. (Where before, they wanted to mask it.)

Mind you, these predictions might not happen tomorrow. Give me, say, up to a year.

Your predictions?

UPDATE – Made me laugh: John Ziegler of Mediaite thinks the reason Hillary lost is… because the media wasn’t enough on her side as they should have been. Yup. That’s what his stupid non-argument boils down to.

Income Inequality

Posted by V the K at 2:05 pm - September 17, 2016.
Filed under: Economy,Gay Culture

Gay male couples out earn heterosexual couples by an average of $63,000 per year.

Men in same-sex marriages tend to earn significantly more than their lesbian or heterosexual counterparts, according to new data released this week by the U.S. Treasury Department. Gay men had an average household income of $176,000 in 2014, $52,000 more than lesbian couples and $63,000 more than opposite-sex couples.

This is obviously unfair to straight couples, and conclusively demonstrates that the economy is deliberately geared to benefit the 3%.

Where’s Bernie Sanders when you need him?

The Leftist Bubble Wrap

Posted by V the K at 1:25 pm - August 1, 2016.
Filed under: Economy

Pundits, politicians, and cronies living in the little bubbles that benefit from Obama’s crony socialism (deficit-driven spending targeted at Government bureaucrats and big investment banks) are baffled that folks devastated by Obama’s War on Coal and Regulatory War on Industry don’t see America through the rose-tinted spectacles of narcissism.

Most Americans also know that vast swaths of the Washington, D.C.-area are filled with wealthy people gorging themselves at the federal trough. They know that the rules don’t apply in Silicon Valley, where companies have been given a pass from taxes and many of the regulations that overwhelm ordinary American businesses. They know that when Silicon Valley businesses like AirBnB and Uber come to town, the laws often will be rewritten for their benefit.

Most Americans know about corporate executives like Marissa Mayer. She completely failed to turn around the struggling Internet pioneer Yahoo, though that’s what she was hired to do. Her “accomplishments” include buying the now-worthless blogging platform Tumblr for $1.1 billion. Despite her failure, if she’s not retained in the wake of the reported sale of Yahoo’s businesses to Verizon, Mayer is set to collect a pre-negotiated $55 million golden parachute. Most Americans know that they wouldn’t be treated so kindly if they lost their jobs.

(Paul) Krugman should spend some time talking to people in Flint, Michigan, the South Side of Chicago, California’s Central Valley, or any of the many decaying industrial cities and towns throughout the Midwest and Northeast. That might clear up some of his confusion.

 

Democrats Against Progress or the Sharing Economy

Posted by V the K at 8:48 pm - July 14, 2016.
Filed under: Economy

Hillary Clinton and Bernie Sanders took stands against Uber and its threat to the heavily regulated and unionized taxi industry. Now, Liz “Fauxcahontas” Warren is going after Air BNB to protect the hotel industry (which has a lavish lobbying arm).

In both cases, they are moving to protect old industries with outdated business models; the buggy whip manufacturers of the 21st Century.

Remind me again which party it is that can’t deal with change?

Quibbling with Sowell

Posted by V the K at 7:21 am - July 12, 2016.
Filed under: Economy

Ace quotes Thomas Sowell:

It bothers me a little when conservatives call Barack Obama a “socialist.” He certainly is an enemy of the free market, and wants politicians and bureaucrats to make the fundamental decisions about the economy. But that does not mean that he wants government ownership of the means of production, which has long been a standard definition of socialism. What President Obama has been pushing for, and moving toward, is more insidious: government control of the economy, while leaving ownership in private hands. That way, politicians get to call the shots but, when their bright ideas lead to disaster, they can always blame those who own businesses in the private sector.

Thus the Obama administration can arbitrarily force insurance companies to cover the children of their customers until the children are 26 years old. Obviously, this creates favourable publicity for President Obama. But if this and other government edicts cause insurance premiums to rise, then that is something that can be blamed on the “greed” of the insurance companies. The same principle, or lack of principle, applies to many other privately owned businesses. It is a very successful political ploy that can be adapted to all sorts of situations.

I would quibble that what Obama favors is a kind of Socialism, just that he achieves it through regulation rather than confiscation. But the end result is the same… a planned, political economy where political operatives make decisions according to their own prerogatives rather than letting people make decisions for themselves. The hugely expensive politically-driven push to wind and solar power that results in consumers paying more for energy is one example, and the wretched and unpalatable school lunches dictated by the whims of the president’s wife are another. Then there is, of course, Obamacare where the Government decides men should have to pay for women’s gynecological services and the mentally healthy must pay for the genital mutilation of transgendered people because these are voting blocs for the ruling political coalition. Britain’s NHS has politicized and bureaucratized the practice of medicine; Obamacare has achieved the same result with the thin veneer that private bureaucrats, rather than Government ones, administer the program.

If all a company’s decisions are dictated by the Government, the company is de facto socialized. And when the details of running the economy are worked out between corrupt politicians and corrupt businessmen, Obama has successfully nationalized the Chicago style of Government.

The Obamacomony

The size of the U.S. deficit isn’t the only thing they lie about. Unemployment is another.

Last week, The New York Times trumpeted, Jobs Roar Back With Gain of 287,000 in June, Easing Worry, with the official unemployment rate at 4.9%. Isn’t it wonderful?

“Wow, this one takes my breath away,” said Diane Swonk, an independent economist in Chicago.

Ooh, she’s “independent” – that makes her reaction valid! But here’s the real story.

  • The same jobs report has downward-revised the previous months’ numbers (from bad to horrible).
  • In the Bush years, the media would treat a jobs number in the 200k range as a crisis.
  • The Obama so-called “recovery” is the Weakest. On. Record.
  • Most of the jobs created in the Obama years, including the recent jobs report, are part-time and low-paying.
  • In the Obama years, tens of millions of Americans have given up even hoping for a job. “Labor force participation” has plummeted to lows not seen since the 1970s.
  • If we use the participation rate from early 2009 when Obama took office, the unemployment rate is 11%. (And that’s ignoring under-employment / the part-time jobs.)
  • And no, the declining participation isn’t because “the Baby Boomers are retiring”. They’re not retiring. Under Obama, they can’t afford it. They’ve been coming out of retirement, to take those low-paying, part-time Obamajobs from young people.
  • Young people face a crisis; many can’t get an entry-level job.

Perhaps this is why President Obama has the highest U.S. suicide rate in 30 years.

Deficit update

First, let’s do a National Debt update. You’ll see why, in a minute.

As of this day, the U.S. national debt is $19.3 trillion. ($13.9 trillion held by the public; $5.4 trillion “intragovernmental”, for example, Treasury bonds held by Social Security.)

When President Obama took over from President Bush, it was $10.6 trillion. ($6.3 trillion held by the public; $4.3 intragovernmental)

So, Obama has already more-than-doubled the part of the U.S. national debt that everyone agrees is important (what’s “held by the public”). And he’s on track to double the total, by the time he leaves office.

But there’s more. On this day 3 years ago, the total was $16.7 trillion. So, over the past 3 years, the U.S. operating deficit – the money that the U.S. Treasury actually had to borrow to pay for stuff – has been $2.6 trillion, or roughly $865 billion per year.

That’s funny because the three most recent U.S. budget deficits are supposed to be much smaller. 2014 – $483 billion, 2015 – $438 billion, 2016 – $616 billion; for a total of $1.5 trillion. (September-ending fiscal year means a 2-3 month shift from the dates I used above; but that does not alter the story drastically.)

What does it mean? It means they’re lying to us about the size of the U.S. budget deficit. And they’ve been lying for years, as I’ve blogged previously.

Oh, you could say “Come now, the accounting numbers are accurate, they’re just using some budget/accounting tricks to hide a big chunk of their spending-and-borrowing.” But I consider tricks to be lies. Don’t you?

According to left-wingers like MSNBC and Rachel Maddow, or even the Dear Leader Himself, His Dear Leadership has reduced the U.S. annual budget deficit by 2/3. No, pumpkins. It hasn’t. You lie.

Newsflash: Higher wages don’t come for free

Business 101: When paying an employee, you have to pay in line with their productivity.

  • If you underpay, you lose the employee.
  • If you overpay, you run up losses and lose your business.
  • If you raise the hourly wage, you must get more from each employee hour – and you must cut the hours/employees that won’t or can’t rise to the new, higher bar.

You may have seen the following last week, but I didn’t want to let it pass without comment. After raising wages over the last 18 months, Starbucks and its employees have been learning some lessons the hard way:

An online petition accus[es] Starbucks Corp of “extreme” cutbacks in work hours at its U.S. cafes…

[Starbucks] recently introduced technology that allows customers to order and pay from mobile devices. That service aims to…reduce bottlenecks in stores. [ed: reducing the number of employees needed per shift]

Starbucks has a software system that determines labor needs based on business trends…
Comments on the petition painted a picture of broad discontent at the company…
…many signers say they noticed cutbacks in U.S. staffing hours…
One central California store has seen its labor allotment shrunk by about 10 percent, even though sales are up…
“No matter what we do to save on labor at my store, the system tells us EVERY SINGLE DAY that we are at least 8 hours over in labor for the day and have to cut even more,” wrote [a petition] signer…

Like other restaurants and retail companies, Starbucks is wrestling with the effects of local minimum wage increases…tipping has fallen substantially amid broad customer adoption of the “Starbucks Rewards” program, which allows customers to pay with a loyalty card or mobile phones.

Suppose Starbucks gives in and boosts employee hours (arbitrarily; without a matching, widespread sales & productivity gain). What happens then? Operating budget overruns and closing stores. And/or price increases, declining sales, and closing stores. Perhaps eventually, a closing company. Thanks, Blue State lefties!

UPDATE: This oldie from The Guardian in 2014 may help us to see the problem:

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