For Democrats, Joe Biden's 'right' to spend is absolute...
A big bank has gone down, the second in 48 hours. The U.S. trade deficit has widened. Inflation is out of control with the Fed openly warning the rate hikes to beat it back are going to keep coming.
Yet for Joe Biden and his fellow Democrats, keep calling for more federal spending. That's where the problem is coming from. Inflation is always and everywhere a monetary phenomenon, just as economist Milton Friedman explained. Call for more spending and what's really being called for is more inflation and the interest rate hikes that follow to stop that inflation, both of which are now wreaking havoc.
Biden just did that this week, seeking a $6.9 trillion federal budget full of new spending, even as he questionably claimed that tax hikes would bring in a windfall for the government, making its deficit smaller.
The Washington Examiner notes:
President Joe Biden released a budget proposal on Thursday for fiscal 2024 that includes about $6.9 trillion in spending and would result in a $1.8 trillion deficit, further adding to the country’s high debt.
Biden's budget proposal, which is not legislation but rather a suggestion for Congress that outlines his priorities, gives a picture of an ambitious tax-and-spend agenda, one that is strongly opposed by the Republican majority in the House. Given a raft of spending proposals, partially offset by taxes, the plan would result in a $17 trillion deficit over the next decade.
In other words, not only does the budget not balance, but it does not even stabilize the debt.
So now things are starting to blow up -- the banks, the trade deficit, the markets, inflation, consumer debt -- because of Biden's unstoppable urge to keep spending taxpayer money.
Start with the collapse of Silicon Valley Bank, which fell apart based on the sharp rise in interest rates. The dynamic there was that assets in accounts were placed into government bonds, which grew less valuable as the later government bonds issued paid higher interest rates owing to the Fed's rate hikes. The bank tried to sell them, but lost money and then the bank run started.
Then there's Janet Yellen, who's forgotten where inflation comes from. She's busy warning that the U.S. is facing "economic collapse" if the GOP-led House doesn't raise the debt ceiling so that Joe Biden can go spend more money.
WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen urged members of the U.S. House of Representatives on Friday to raise the federal debt ceiling without conditions, warning that a default on U.S. debt would cause "economic and financial collapse."
Yellen, in budget testimony before the Republican-controlled House Ways and Means Committee, said that failure to increase the $31.4 trillion borrowing cap would threaten the economic progress that the U.S. has made since the COVID-19 pandemic.
"In my assessment - and that of economists across the board - a default on our debt would trigger an economic and financial catastrophe," Yellen said. "I urge all members of Congress to come together to address the debt limit – without conditions and without waiting until the last minute."Asked about the possibility of prioritizing payments to cover U.S. debt payments first from available cash resources, as some Republicans have suggested, Yellen said that was "not a solution to the debt ceiling issue."
"Not a solution to the debt issue"? How is letting Joe Biden keep up with his spendathon, spending more and more each time, going to prevent "economic and financial collapse"? Biden needs to cut government spending on his pet and crony projects simply to stop the gusher of money rolling out of the government printing presses, and the House needs to put curbs on his bankbook. The spending is what's fueling inflation, but Yellen is arguing that Joe should be allowed to spend more and Congress must accommodate him or all hell will break loose. That's like telling a drunk he's owed one for the road or he'll go bonkers in the bar.
Then there's the trade deficit: It's widened. Economist Steve Hanke noticed, and has a tweet:
On March 8, the U.S. Commerce Department reported that the trade deficit increased by 1.6% to $68.3 billion. A trade deficit Made in the USA. Larger fiscal deficits = larger trade deficits.https://t.co/QkZZfyU01P— Steve Hanke (@steve_hanke) March 10, 2023
Based on what I found, the wider trade deficit is a function of a falling dollar, which raises the price on imported goods, making the trade deficit bigger. Sound like a lovely thing for American manufacturers? Look for more Made in China on that one. Way to go, Joe.
Lastly, there is the ignorant sniping at the Fed coming from the Biden camp about higher interest rates, as if the Fed has a choice in the matter, and inflation can be waved away with a magic wand.
Check out this goofus:
Squad lawmaker Rep. Ayanna Pressley accuses Fed chief Jerome Powell of ‘engineering a recession’ https://t.co/uMsbs3ChFh pic.twitter.com/qoGxvrgwWX— The Washington Times (@WashTimes) March 9, 2023
Powell is engineering a recession? Powell is reacting to Joe Biden and his crazed urge to spend. He's doing a cleanup on Aisle 46, and yeah, rate hikes bring recessions, but Powell doesn't do rate hikes unless there's too much money in the system. That brings us back to Joe.
What this, and Yellen's call to raise the debt ceiling, and for that matter Joe Biden's chutzpah in bringing forth an insultingly lavish budget, all have in common is a strange belief that Joe Biden has a "right" to keep spending without consequences.
Everyone else needs to mop up after him, whether it's the Fed and its rate hikes, the depositors at Silicon Valley Bank, or the bad, bad Republicans in the House who won't give Joe the keys to the safe.
Biden's urge to spend is an immutable, a fact of nature, a bus without brakes that can neither change course nor stop, and everyone else needs to go around him.
Biden somehow gets a pass on his obscenely rising government spending, as everything else under the sun must revolve around his urge to spend.
What kind of garbage is this? Until Joe Biden learns to control his spending -- and I'm not talking about his gaslighting claim that he is -- surprise after surprise is on the way as banks go down, consumers go bankrupt, the U.S. can't pay its debts, Made in China becomes more and more frequent, taxes soar, and innovative startups can't get financing. All of them are rooted in one thing: Joe Biden's failure to stop his government spending.
It's high time Congress and political leaders started telling the fiscally incontinent old fool 'no' before a real collapse is the result. Already we are seeing the pieces breaking off.
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