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Last Friday’s Awful Spending Bill

Here at the Central Standard Times we write our Friday posts on Thursday and then take a couple days off from the news, but since then the Republican majorities in the House and Senate passed a $400 billion spending bill that suspended the national debt limit for two whole years and Republican President Donald Trump quickly signed it. Being the grumpy old-fashioned Republican sorts that we are, we spent much of the weekend grousing about it.
The deal includes a couple of hundred billion bucks to bolster America’s military, and while we’re generally in favor of that we have our worries about what the failed casino mogul who is currently Commander in Chief might do with it. The other couple of hundred billion bucks goes to various and usually counterproductive Democratic bleeding-heart programs, and although we’re generally opposed to such nonsense we’ll hold out hope it at least temporarily placates them. The deal at least keeps the government running for another couple of years, which our old-fashioned Republicans sensibilities suppose has some benefit, and it puts off that messy illegal immigration for another few days, which gives us a few days off from worry about that, but it does so with an enormous swelling of the federal deficit, which we cannot abide without becoming craven hypocrites.
The big Republican tax-cut bill that was all the big news a few news cycles ago might yet bolster economic growth enough to result in a net increase in tax revenues — and that corporate tax cut seems especially promising — but in the meantime it’s going to add a few hundred billion of decreased revenues to the added $400 billion in spending and result in one of those trillion dollar deficits last seen in the darkest days of the early administration of President Barack Obama. Those eye-popping digits inspired the Tea Party revolt in the Republican party, which wound up wresting control of the House and then the Senate and ultimately resorting the fiscal sanity of the mere half-trillion dollar deficits of the President George W. Bush year, but since then the party has changed.
Trump ran on on extravagant promises that with his managerial genius he could wipe out America’s $20 national debt within eight years, and offered his own several successful business bankruptcies as proof, but he also promised not to touch the entitlement programs that are mostly driving America’s debt, and far more than all that cold-hearted military spending or bleeding-heart domestic programs. Somehow most of the Tea Party types who hated those establishment Republicans who’d tolerated Bush’s half-trillion dollar deficits bought into Trump’s anti-establishmentarian rhetoric, after that even such stalwart establishment types as Senate Majority Leader Mitch McConnell and the once-redoubtable House Speaker Paul Ryan willingly went along with the next trillion dollar deficit, and at this point we figure were among the very last of those old-fashioned Republicans who are dismayed by it all.
Our own Republicanism goes back to good ol’ President Dwight D. Eisenhower and his obsessively budget-balancing ways, and oh how we still like our fellow Kansan Ike, but we also remember when the wage-and-price-controlling President Richard Nixon proclaimed that “we’re all Keynesians now,” and even after such long experience none of the current Republican policies make any sense. It seems clearer than ever that America’s finances should be on more solid ground than a Trump casino and strip club, and the latest budget deal doesn’t make any sense even according to the convoluted but occasionally useful thinking of John Maynard Keynes. Trump continually boasts of the low unemployment rate and high growth of the overall economy he has wrought in a mere year, yet insists on a double amphetamine injection of tax cuts and a trillion dollars of stimulative tax spending, which has lately legitimate inflation concerns that have scared the Federal Reserve Board into threatening interest hikes that have lately spooked the stock markets that Trump was recently bragging about. When the next inevitable recession comes around, and we hope it’s later rather than sooner, it will be a more indebted federal treasury that is called on to bail it out.
Kentucky’s Republican Sen. Rand Paul called his party out on its hypocrisy, and even managed to shut the government partially down for a few inconvenient moments while doing so, and there’s somewhere between 20 and 30 Republican House members in the “Freedom Caucus” that sprang from the “Tea Party” movement who also resisted, so God bless ’em for their stupid and futile gesture. The putative Republican yet anti-establishment president and the rest of the party, including such erstwhile establishment types as McConnell and Ryan, were all on board. The Republican party also seems wavering from long held positions on wife-beating and cheating with porn stars and and dissing the federal law enforcement and intelligence agencies, which also bodes ill to our old-fashioned Republican sensibilities.
Of course those darned Democrats and their profligate bleeding-heart ways aren’t helping the fiscal and general economic things at all. Say what you want about that budget-busting deal to avert another so-what government shutdown, we’ll wager you’ll get more bang for your buck out of that couple hundred billion spent on defense than you will out of that couple hundred billion spent on social programs. The current Democratic indignation about Republican deficit spending is at least as hypocritical as the past Republican indignation about Democratic profligacy, and offers no solution to the problem.
Ah, well. We had a heartening church service on Sunday, and hold out hope that despite all those newfangled Republicans and forever darned Democrats the rest of us will somehow work this out.

— Bud Norman

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When Winter Lingers into Summer

You might not have noticed, what with all the political scandals and foreign crises and invasions of unaccompanied minors and soccer games vying for your attention, but the American economy remains very, very lousy. According to the ultimately official numbers that were released with little fanfare this week, the American economy is lousier than it’s been since the bad old days of the ’08 meltdown.
The first and most ballyhooed estimate of the first quarter’s Gross Domestic Product was for 0.1 percent growth, which was horrible enough but at least kept alive a streak of anemic growth and could plausibly be blamed on the miserably cold winter that had afflicted much of the nation. That was more quietly followed by a revised estimate of a 1.1 percent decline, and the administration’s apologists arguing that the winter was even worse than they’d realized and it would have been more dire if not for the miracle of Obamacare causing an uptick in health care spending. Only the most nervous sorts of investors and the hard-core news junkies would have heard about the final report of a 2.9 percent decrease in GDP, which is even harsher than the past winter and includes the unsettling news that Americans actually spent less money on their health. Upon closer examination the numbers become even more dismal, with declines in private inventory investment, exports, state and local government spending, and residential and non-residential fixed investment that cannot be explained by snowy roads and falling temperatures.
Still, those ever-bullish proponents of Obamanomics in the popular press are reassuring their readers that the lazy, hazy days of summer will correct the situation. Presumably this is the time of year when a young executive’s fancy turns to thoughts of private inventory investment, and everyone will be herding the kids into the car and hitting the road to a relaxing yet economically stimulative vacation despite the gas prices rising from all those foreign crises that have nudged the economy off the front pages. Those of us less enamored of the high-tax, high-regulation, high-minded anti-caplitalist scheme that has been imposed on the American economy the past six or so years remain bearish.
The smart fellows over at zerohedge.com note that after the miserable winter even if spring and summer and fall bring the rosy 3 percent growth rates that the government has been promising it will average out to a meager 1.5 percent growth for the year. They don’t seem at all confident of that, either, noting that the past 50 years of economic history have never found two years with growth of less than 2.6 percent that weren’t followed by a recession. After a long stretch below that economic Mendoza line another quarter of contraction would force the headline writers to use that dreaded “R word,” and the economy would be once again jostling with the latest scandals at home and catastrophes abroad for news space.
Such dire news should make the stock markets happy, as it will likely force the Federal Reserve Board to keep printing up money and pushing down interest rates at least through the mid-term elections next fall, but it will have an unsettling effect on those portions of economy that make their money honestly. All those scandals and crises don’t inspire much confidence in the nation’s leadership, either, nor do they bode well for the price of energy. Perhaps that invasion of unaccompanied minors from will rescue the economy, but even in the midst of a wet and warm summer we’re still feeling those wintertime blues.

— Bud Norman