Surreal photo of the Capitol Building in Washington DC in an article by Allen West on the Old School Patriot

DC’s Not-So-Little Spending Problem

In Economics, Front Page, US Politics by Allen WestLeave a Comment

It’s been over a week since the 2018 midterm elections, and oh boy, the Democrats are still finding ballots. Heck, I found a box of ballots in my Jeep Wrangler Rubicon! Okay, surely I jest, but this is a very serious issue, and it must be rectified. If there is one thing we should have pride and confidence in, it should be our electoral process.

Now, I would not say that voter fraud was a factor in the GOP losing the US House of Representatives. But we all know that if you are inside the “margin of cheating,” the progressive socialist left has a bag of tricks, targeted at key races in key places. However, the loss of the House of Representatives majority by the GOP has more to do with the House GOP than anything else. First, the GOP must clearly delineate their legislative vision from that of the left in a simplistic manner that all Americans can comprehend — victors vs. victims, individual freedom vs. collective subjugation, equality of opportunity vs. equality of outcomes, liberty vs. tyranny, and the pursuit of happiness vs. guaranteed happiness (free stuff).

The GOP had four basic mandates while having control of the House, Senate, and White House. Those were to fix our economy and get us back to work, repair the damage of Obamacare to our healthcare system, secure our borders, and curtail the profligate spending that we have come to know.

So, how did they do?

Needless to say, the economy turned around, but the GOP had to be dragged kicking and screaming to get it done. On the other three major legislative imperatives, well, they failed, and abysmally so. And the greatest failure, in my estimation, was the failure to curtail the profligate spending of Washington, DC. Why is that the most critical? Because, no matter how great our economy runs, we are still in danger of having massive debt, and continued, growing, deficits. Let us not forget that it was the GOP that gave us a $1.3T omnibus spending bill.

As reported by Fox News:

“The federal government collected record total tax revenues of $252,692,000,000 in October, the first month of fiscal 2019, according to the Monthly Treasury Statement released Tuesday. 

Despite the record tax collections, the government still ran a deficit of $100,491,000,000 for the month—because it spent $353,183,000,000. This October’s record $252,692,000,000 in total tax collections was $11,414,590,000 more than the $241,277,410,000 (in constant October 2018 dollars) that the federal government collected in October 2017, which was the previous record for federal tax collections in October. 

 Although the total federal taxes collected this October set a record, the individual income taxes that the federal government collected in October did not set a record.

This October, the Treasury collected $128,866,000,000 in individual income taxes. In October 2017, the Treasury collected $131,056,520,000 (in constant October 2018 dollars). Corporation income tax receipts, however, were significantly higher this October than they were in October 2017.

This year, the Treasury collected $8,000,000,000 in corporation income taxes in October. Last year, it collected $3,823,060,000 (in constant October 2018 dollars). The $8 billion in corporation income tax revenues the Treasury collected this October is the largest amount since October 2015, when the Treasury collected $10,893,630,000 (in constant October 2018 dollars) in corporation income taxes.”

Now, what immediately jumps out from this analysis is that the Democrat line about tax breaks for the wealthy corporations is invalid. Yes, there were tax cuts to corporations, there needs to be the same for individuals, from the world’s highest rate of 35% to 21%. And, it appears that even with that tax rate cut, tax revenues from corporations increased. That is the essence of supply-side economics, lower rates, folks spend more, and tax receipts increase . . . naturally. This is far better than the draconian, and absurd, Keynesian economic policy of a government-driven economic focus, centered on taxing and spending.

The problem is simple: as we do what is necessary and proper in cutting tax rates, the federal government must match that with reductions in spending.

The problem is simple: as we do what is necessary and proper in cutting tax rates, the federal government must match that with reductions in spending. Click To Tweet

Let me explain: when you hear the chuckleheads on Capitol Hill talk about cutting spending, they actually are not. The federal government uses what is called the baseline budget system. That means each year there is an increase in spending off of a previous budget year baseline. What they call a cut to spending is nothing more than a cut in the rate of the increase in spending. Yep, they are some tricky rascals.

Therefore, we have a great increase in tax revenues, which one would think leads to a surplus, right? Nope, because we have irresponsible spending on Capitol Hill, we are still running monthly deficits, and soon we may be back to Obama-era trillion-dollar deficits. Now, if there was any hope, it was that the keepers of the purse strings on Capitol Hill, the US House of Representatives, held by the GOP, would do what was right with spending. They didn’t. And, if any of you believe that the progressive socialists who are about to control the House of Representatives are going to do right by getting spending under control, you are smoking crack!

You can bet that the leftists, enabled by their complicit liberal progressive media allies, are going to do everything possible to spend, spend, and spend some more. Why is that? Because they need victims, and they need folks dependent upon them, so there will be more talk about health care spending, and Medicaid expansion. There will be more talk about massive infrastructure spending . . .  and here I thought Obama’s trillion dollar stimulus from February 2009 solved that problem. You know, “shovel ready” jobs?

President Trump stated that he wants every government agency to cut their budget by 5%. Oh boy, expect hearings and testimony that will seek to condemn administration officials of killing people. See, we expect the left to be spending demons, we did not expect the GOP to follow suit. Let’s hope that the House GOP, now in the minority, will learn their lesson and do what they promise to do. Their lack of intestinal fortitude has brought us to this point . . . not to mention failing to fund the border security system.

So, the great fiscal genius and budget guru, Paul Ryan, is about to sail off into the sunset. Ask yourselves, what the heck did he accomplish? No worries, he will be getting a big-time seven-figure lobbyist job . . . heck, former House GOP Speaker John Boehner is out and about peddling marijuana now.

We are left to contend with their fiscal failures as the debt clicks higher and our deficits are trending upward. Thanks, y’all.

[My latest book, Hold Texas, Hold the Nation: Victory or Death is now available at Amazon, Barnes & Noble, and retailers nationwide!]

Photo credit: Onasill ~ Bill Badzo on Visualhunt.com / CC BY-NC-SA

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