YOUGHAL, IRELAND – Yahoo Finance reports:
Elizabeth Warren has a plan for everything. Some of those plans are expensive. With Warren emerging as a front-runner in the Democratic presidential contest, Yahoo Finance tallied the cost of her plans.
Altogether, the Massachusetts senator’s agenda would require $4.2 trillion per year in new federal spending, and a like amount in new taxes, if she paid for everything without issuing new debt. The federal government currently spends about $4.4 trillion per year, so Warren’s plans would nearly double federal spending.
How would Ms. Warren pay for all this new spending? So far, she’s proposed a wealth tax on rich people… and a 7% surtax on corporate revenue over $100 million.
Of course, even as president, Ms. Warren wouldn’t be able to pass into law all of her fabulous plans. And even if she could, she would quickly realize that she needed a new plan to deal with the economic damage from the old plans.
Still, under a Warren presidency, deficits and debt would almost certainly rise. Her advisors are telling her that she has the “fiscal space” to increase spending; no doubt, she would give it a go.
But there’s no need to pick on the Massachusetts senator. The reality TV star from Queens has already crowded into the fiscal space – boosting spending and debt faster than any president in the last 50 years.
And in the next crisis, he or Ms. Warren will do the same thing… Following the advice of Nobel laureates and jackass hacks, they will fill the space completely and spill out onto the sidewalk.
Still, Ms. Warren is useful to us… in the way an idiot is useful to a village… to put things in perspective. No matter how bad things get… they could always be worse.
That is the sort of thought that creeps into your brain in late October. The seasons are unrelenting. And at this time of the year, they get worse before they get better.
Here in Ireland, the day’s high temperatures barely reach 50 degrees. Rain… clouds… fog… The golden leaves drop from the trees. The mist clings to the Blackwater River like an old man lingering over his morning tea…
We keep a fire in the fireplace and a kettle at the ready. It is a delightful season, after all. But soon, it will get worse.
The financial news, too, brings more and more clouds. Reuters:
A steeper decline in global economic growth still more likely than a synchronised recovery, even as multiple central banks dole out rounds of monetary easing, according to economists polled by Reuters in recent weeks.
While a reprieve from escalating U.S.-China trade tensions has pushed stocks back near record highs, a record $17 trillion (£13.22 trillion) of bonds have negative yields and a key market signal of U.S. recession is still flashing red.
China is growing at the slowest pace in a quarter of a century. Germany’s manufacturing sector shrank for the 10th month in a row. And in the U.S., capital investment growth (which is what creates tomorrow’s prosperity) is now negative, after a brief boom following the tax cut.
Transfer payments from the government exceed all the money paid in federal income taxes… and “social benefits” (aka government handouts) have now reached a record of 22% of disposable incomes.
Commercial construction is 20% below its February 2018 peak. Industrial production, which rose at a 4% rate in 2018, is now going nowhere; the growth rate is zero. Manufacturing – measured by labor hours – is now falling.
But who cares?
In America, the news is dominated by impeachment proceedings. In Europe, it’s Brexit at the top of the news reports. As near as we can tell, both are mostly distractions.
But distractions from what?
Most likely, the average person’s life and livelihood will be little affected by either Brexit or the impeachment of Donald Trump.
Food, clothing, transportation, shelter, jobs, marriage, friendships… none of the things that really matter will change much.
But suppose you were to lose your job? Or suppose your credit cards didn’t work? And your asset values – stocks, bonds, real estate – were cut in half?
And suppose your cash – if you could get it – was losing value at a 50% rate… and the interest rate to refinance your mortgage was 40%… and the value of your Social Security checks was going down faster than the Consumer Price Index (CPI) adjustments could keep up with…
…and the National Guard had been called out in Chicago… Cleveland… Baltimore… and Los Angeles, as angry mobs attacked banks… luxury stores… and the houses of rich people…
Fools and Incompetents
It hardly matters who is president. After all, we’ve had plenty of fools and incompetents in the White House; our civil society has gone on, apparently undamaged.
And Britain was a tolerably decent place before it joined the EU… and will probably be fine after it leaves.
Still, humans can make a mess of things from time to time. All it takes is fake money… fake knowledge… fake plans… fake wars… and synchronized, worldwide claptrap…
Here’s our weekend advice to Dear Readers: Clean the furnace, stack firewood, buy gold.