BY JUSTIN GARDNER
When we talk about declining jobs and economic burdens, the narrative conditions many to blame some “other” political or cultural group. But perhaps the least talked about threat to jobs comes from the government itself in the form of occupational licensing.
A new analysis from the Wisconsin Institute for Law & Liberty (WILL) found that in Wisconsin alone, the rapid expansion of licensing requirements over the past 20 years caused 31,000 fewer jobs to be had, and cost consumers almost $2 billion.
As this writer posited earlier this year, government licensing is just another extortion racket with no real purpose in making things safer or better.
These licenses involve paying government to take some sort of test and/or provide documentation of state-approved training, and then paying government every year—at steadily increasing rates—until you quit, retire or die.
The notion of being licensed may sound nice to people looking for a service, and the basic idea of demonstrating knowledge about a trade is good. But mandatory government licensing can be described simply as extortion rackets with no real purpose in making things safer or better.
Even in a profession that can be dangerous to others, such as repairing gas leaks, the constant money shakedown from government has no bearing on the safety of such professions.
As the Institute for Justice (IJ) explains, it is not about protecting consumers, but protection from competition. Government licensing is a joint effort made possible by “the personal interests of those already practicing the occupations” and the state’s thirst for control — just another part of the corporatocracy.
In 17 states, African hair braiding requires a cosmetology license which costs $5,000-15,000 and thousands of hours of classroom training. In Wisconsin, government absurdly requires licensing for things such as auctioneering, beekeeping, selling Christmas trees, dance therapy and peddling ice cream.
Since 1996, according to the WILL report, the number of occupation licensing categories in Wisconsin has ballooned by 84 percent. Licensing puts an average $754 burden on the households in that state; nationwide, the burden is up to $1,600 per year for the average household.
The WILL report comes just in time for the January legislative session in Wisconsin, where several in the Assembly “seek to eliminate licenses in Wisconsin that do not provide legitimate public safety benefits.”
Dedicated campaigns carried out by organizations such as WILL and IJ have forced the issue to the attention of state lawmakers. Lawsuits are having success at forcing authorities to back down from pointless licensing requirements that obviously serve only to protect industry monopolies and raise revenue.
Case law has spelled out, quite simply, the farce of licensing, such as Murdock v. Pennsylvania, 319 U.S. 105: “No state shall convert a liberty into a license, and charge a fee therefore.”
Another issued a clarion call in the fight for freedom.
“If the State converts a right (liberty) into a privilege, the citizen can ignore the license and fee and engage in the right (liberty) with impunity.” (Shuttlesworth v. City of Birmingham, Alabama, 373 U.S. 262)”
There are other ways to achieve the goals of licensing without the State extortion racket, as IJ explains.
“Certification, especially certification by an independent third party, can give consumers justifiably heightened confidence in a service provider without imposing licensing restrictions that stifle entry into an occupation, which limits competition and drives up prices. What’s more, such voluntary certification can be coupled with online reviews and recommendations to further guide consumers to the best service providers.”
Read more at http://thefreethoughtproject.com/study-government-licensing-laws-kill-31000-jobs/#v9vetME3bgFdreB8.99
BY SIMON BLACK
OK, this is pretty nuts.
According to data released by the Treasury Department yesterday, the US national debt has soared by a whopping $294 billion since the start of the 2017 fiscal year, just 45 days ago.
That’s an annualized increase of 13%.
So if they keep up this pace, the national debt will increase by $2.4 trillion this fiscal year, surpassing $21 trillion by next September.
It’s hard to believe how rapidly the debt is growing; debt growth is far outpacing the growth of the US economy… and there’s no way to pretend that this is good news.
That doesn’t stop leading economists from trying.
Nobel Laureate Paul Krugman says “debt is good” because the US economy has grown so much over the last 200 years despite not having been debt-free since 1835.
This kind of logic is astonishing.
Aside from a few anomalies like World War II and the American Civil War, debt levels over most of early American history were low.
100 years ago in 1916, US debt was about $3.6 billion; as a percentage of GDP (i.e. the size of the US economy), that was about 7%.
Today’s debt of $19,867,119,032,053.28 is actually bigger than the entire US economy at over 106% of GDP.
Yet in Krugman’s view, the fact that America prospered a century ago when the debt was 7% of GDP means that the nation will continue to prosper with a debt at 106% of GDP.
Amazingly enough, Krugman has been awarded our society’s most esteemed prize for intellectual achievement. It boggles the mind.
To be fair, there is such a thing as “good debt” versus “bad debt”, and it’s not difficult to distinguish between the two.
If you can borrow money at 5% in order to make a safe investment that has a 25% return, for example, that may very well qualify as “good debt”.
If you borrow money at 5%… or even 1%… and then squander the borrowed funds on useless trinkets, that’s clearly “bad debt”.
In 1803, the startup US government negotiated the Louisiana Purchase from France, a real estate acquisition that doubled the size of the US.
It was the mother of all distress sales. France was desperate for cash, and the administration of Thomas Jefferson negotiated a price that valued the land at around $15 million.
Adjusted for inflation to 2016 dollars, Thomas Jefferson paid about 40 cents per acre to acquire the land that comprises fifteen states and has generated trillions in economic activity.
Naturally the US government had to borrow money that year to conclude the Louisiana Purchase with France, so the national debt increased slightly in 1804.
But when you consider the extraordinary economic benefit of that purchase, it clearly qualifies as “good debt”.
Fast-forward to our modern era and we see that the debt is increasing by more than a trillion dollars each year.
What are the good citizens of the United States receiving in exchange for taking on so much debt?
It’s not like the government bought up half of Mexico or colonized Mars.
No, instead they wasted $2 billion on the Obamacare website, most of which went to a company whose top executive just happens to be an old friend of Michelle Obama.
Today, the US government has to borrow money just to pay interest on the money it’s already borrowed. This is almost the textbook definition of bad debt…
In fact, the government now spends nearly all of its tax revenue just on mandatory entitlement programs like Social Security and Medicare, plus interest on the debt.
The real kicker is that Social Security and Medicare are massively underfunded and quickly running out of cash… so they’ll both require a major bailout (i.e. MORE debt).
Interest payments, meanwhile, total hundreds of billions of dollars each year even though interest rates are at record lows.
Today the government pays less than 2% interest on its debt.
Ten years ago in 2006, the average interest rate on US debt was over 5%.
Back then 5% was considered incredibly low compared to the higher interest rates of the 1980s and 1990s.
But today, 5% would bankrupt the US government. It’s pitiful.
So unless interest rates stay at these record lows forever (or perhaps go negative), the government’s interest payments are going to explode.
Debt… particularly bad debt… is an absolute killer.
Excess debt has been responsible for bringing down some of the largest companies in the world. It bankrupts individuals.
And excess debt has caused the decline of some of the largest superpowers in the history of the world.
There are a lot of people, led by their cheerleader Paul Krugman, who outright ignore this problem and pretend that the US government can continue expanding its debt forever without ever suffering a single consequence.
And I know there are a lot of people keeping their fingers crossed hoping that a new administration will steer the ship in the right direction.
Look, I’m all for hope and optimism.
But it’s important to stay rational. These problems aren’t going away.
And you won’t be worse off for having a Plan B that provides solid protection from the consequences of these obvious trends.
Do you have a Plan B?
If you live, work, bank, invest, own a business, and hold your assets all in just one country, you are putting all of your eggs in one basket.
You’re making a high-stakes bet that everything is going to be ok in that one country — forever.
All it would take is for the economy to tank, a natural disaster to hit, or the political system to go into turmoil and you could lose everything—your money, your assets, and possibly even your freedom.
Luckily, there are a number of simple, logical steps you can take to protect yourself from these obvious risks:
WASHINGTON — Paul A. Volcker, the Federal Reserve chairman, received an urgent warning two weeks after Ronald Reagan won the 1980 presidential election. Some of the president-elect’s advisers, he was told, wanted to abolish the central bank and replace it with a computer program that would manage interest rates and monetary policy.
Today, a Democratic Fed leader is once again bracing to see whether victorious and emboldened Republicans will try to overhaul the central bank.
In almost three years as the Fed’s chairwoman, Janet L. Yellen has led an aggressive campaign to stimulate economic growth. Donald J. Trump, the president-elect, has embraced criticism that the Fed is causing more problems than it is solving, and he has surrounded himself with advisers who would like to rein in the institution that has the greatest influence over the direction of the nation’s economy.
Mr. Trump can fill a majority of the Fed’s seven-member board with his own nominees over the next 18 months, including replacing Ms. Yellen in February 2018. He also could work with Congress on new constraints, including some form of an old idea on the right that a formula should dictate the Fed’s movements of interest rates.
Or Mr. Trump could emulate Mr. Reagan and leave the central bank alone.
When the two men finally met, Mr. Reagan asked Mr. Volcker why the country needed a central bank. He apparently found the answer convincing. Like other presidents in recent decades, he decided the Fed was reasonably effective and useful as a scapegoat. And in 1983, he nominated Mr. Volcker for a second term.
Mr. Trump’s intentions are unclear in part because there is a tension between his personal preferences and his political commitments. He is a borrower who now heads the political party that has long represented the interests of lenders.
Mr. Trump has described himself as “a low-interest-rate person,” reflecting his background as a real estate investor who drew heavily on other people’s money. He also has promised to deliver stronger economic growth, a goal that could be inhibited by higher interest rates. Politicians — their careers dependent on short-term economic performance — generally favor low rates, even at the expense of future inflation. That is the very reason the Fed is insulated from political pressure.
Many of the advisers surrounding Mr. Trump, however, have long advocated that the Fed focus on controlling inflation, even at the expense of short-term growth. They have argued that the Fed has little power to increase economic activity beyond Wall Street — and on Wall Street, they warn, the Fed is encouraging excessive speculation.
Over the course of the campaign, Mr. Trump increasingly echoed those views. In early September, he said the Fed was supporting a “very false economy” by driving asset prices to what he described as unsustainable heights. “We are in a big, fat, ugly bubble,” Mr. Trump said during the first presidential debate, a few weeks later.
It may be surprisingly easy, however, for Mr. Trump and Ms. Yellen to find common ground. Like Mr. Reagan before him, Mr. Trump has promised tax cuts and increased spending on infrastructure and the military, which could provide a large dose of fiscal stimulus. If the economy starts growing quickly, it would be easier for the Fed to raise rates.
Financial markets climbed last week, reflecting optimism among investors that single-party control of government will lead to faster growth. Both parties wanted to take steps to encourage faster economic growth and more jobs. Republicans will now get to do it their way.
After the election, it was widely predicted that markets would crash — and that the Fed would back away from increasing rates in December. So far, those predictions have failed to materialize. The odds of a December increase, as implied by asset prices, stood at 76 percent on Friday.
Ms. Yellen and other Fed officials have called repeatedly in recent years for a healthy dose of fiscal stimulus, and it seems likely they would greet faster growth with relief.
“It certainly breaks gridlock in Washington, which has been a key complaint of how the economy has operated,” James Bullard, president of the St. Louis Fed, told reporters on Thursday. And Charles Evans, president of the Chicago Fed, said the prospect of increased infrastructure spending was “good news.”
Moreover, there are signs Mr. Trump would like to focus on fiscal policy and leave the Fed to its devices. David Malpass, who is leading Mr. Trump’s economic transition team, said in an email that there had been too much focus on the direction of monetary policy. “There should be focus on growth-oriented structural reforms including reforms of taxes, trade, regulatory policy and energy policy,” he said.
Other advisers to Mr. Trump also emphasize that his goal is to drive economic growth through changes in fiscal policy, easing the burden on the central bank.
“We’re a little obsessed with the Fed, and that’s part of the problem,” said Judy Shelton, director of the Sound Money Project at the conservative Atlas Network and a member of Mr. Trump’s economic advisory group. “Instead of people looking to the Fed to be planning things, it should be in the background, providing a solid foundation of monetary integrity for real economic and entrepreneurial activity.”
Mr. Trump could quickly overhaul the Fed’s leadership. Ms. Yellen’s four-year term as Fed chairwoman ends on Feb. 3, 2018. Stanley Fischer’s four-year term as the Fed’s vice chairman ends a few months later, on June 12, 2018.
Mr. Trump also can move immediately to fill two open seats on the Fed’s seven-member board. Senate Republicans have refused to consider President Obama’s nominees for those vacancies. In effect, that means Mr. Trump’s nominees could control a majority of the board well before the 2018 midterm elections. The seven Washington-based board members hold a majority of the decision-making power on a larger group, known as the Federal Open Market Committee, that sets monetary policy.
“A core view of many Trump advisers is that the extended period of emergency policy settings has promoted a bubble in the stock market, depressed the incomes of savers, scared the public and encouraged capital misallocation,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “Right now, these are minority views on the F.O.M.C., but Trump appointees are likely to shift the needle.”
Other observers, however, are less certain that Mr. Trump will want to hit the brakes. Mr. Shepherdson acknowledged that it was “unusual” for politicians to push for higher interest rates. And Joseph Gagnon, a former Fed economist and a fellow at the Peterson Institute on International Economics, said Mr. Trump’s own statements suggested he might decide he likes what the Fed is doing. “It’s going to be Trump against his advisers, or against the Republicans in Congress,” he said.
Presidents in recent decades also have sometimes backed away from replacing the Fed’s leadership, because transitions can roil financial markets. President Clinton twice reappointed the Republican Alan Greenspan. In 2010, President Obama reappointed Ben S. Bernanke, first nominated by President George W. Bush, before naming Ms. Yellen in 2014.
But Mr. Trump said in May he would “most likely” replace Ms. Yellen. “She is not a Republican,” he said in an interview with CNBC. He also has attacked her personally, declaring in September, “I think she should be ashamed of herself.”
If Ms. Yellen is replaced at the end of her first term, she will have served the shortest stint as the Fed leader since G. William Miller came and went quickly in the 1970s.
Congressional Republicans also are likely to renew their calls for changes in the Fed’s operating instructions. They have repeatedly criticized the Fed’s monetary policy in recent years as opaque, inconsistent and misguided, and they have advanced a number of proposals to constrain it.
“It is way past time for the Fed to commit to a credible, verifiable monetary policy rule, to systematically shrink its balance sheet and get out of the business of picking winners and losers in credit markets,” Representative Jeb Hensarling, the Texas Republican who is chairman of the House Financial Services Committee, said at a hearing in June.
Last year, Mr. Hensarling’s committee passed legislation requiring the Fed to describe a rule for moving interest rates and to justify any deviations from that rule.
Another proposal would subject the Fed’s decisions to a regular external review.
And some Republicans may now be emboldened to pursue larger changes that would impose even tighter constraints on the movement of interest rates. Some conservatives have long favored the restoration of a gold standard — a system in which the value of the dollar is determined by the price of gold, limiting the Fed’s ability to print money and, in theory, constraining inflation. The idea of a monetary policy computer program was advanced by the economist Milton Friedman as an improvement on the gold standard, allowing steady growth in the money supply.
Mr. Trump ruminated on the merits of a gold standard in a campaign interview with TheScene.com this year. “Bringing back the gold standard would be very hard to do, but, boy, would it be wonderful,” he said. “We’d have a standard on which to base our money.” But there is no sign such reforms number among his priorities.
Fed officials have strongly opposed any increase in congressional oversight, describing such measures as infringements on the Fed’s operational independence that might interfere with the central bank’s ability to promote growth.
Mr. Gagnon said they might come to regret not having embraced modest reforms.
“I have thought that all the proposals so far are not as horrendous as people at the Fed seem to think they are,” he said. “Now there could be more proposals.”
BY TERENCE P. JEFFREY
$221,692,000,000: Federal Taxes Set Record for October; $1,459 Per Worker; Feds Still Run Deficit of $44,192,000,000
(CNSNews.com) – Federal tax revenues set an all-time record of $221,692,000,000 for the month of October, according to the newly released Monthly Treasury Statement.
In constant 2016 dollars that is the most taxes the federal government has ever collected in October, which is the first month of the fiscal year.
The record $221,692,000,000 in taxes collected this October was up $6,718,330,000 from the $214,973,670,000 in constant 2016 dollars that the Treasury collected in October 2015.
Despite bringing in record tax revenue of $221,692,000,000 this October, the federal government ran a deficit of $44,192,000,000 during month. That is because federal spending in October was $265,884,000,000.
The record $221,692,000,000 in federal taxes for October equaled approximately $1,459 for every person who had either a full- or part-time job during the month. (According the Bureau of Labor Statistics, the total number of people employed in the United States in October was 151,925,000.)
The $44,192,000,000 deficit the federal government ran while collecting record tax revenue for October equaled approximately $291 for each person with a full- or part-time job.
The second highest federal tax haul in any October came in 2014, when the U.S. Treasury brought in $216,934,990,000 in tax revenue in constant 2016 dollars. The third highest was October 2015, when the Treasury brought in $214,973,670,000; and the fourth highest was October 2001, when the Treasury brought in $214,249,290,000.
Americans paid $121,576,000,000 in individual income taxes in October, according to the Monthly Treasury Statement. That accounted for the largest share of the record $221,692,000,000 in taxes the Treasury collected during the month.
Americans also paid $79,361,000,000 in Social Security and other payroll taxes during Ocotber.
The income tax on corporations brought in $2,277,000,000 during October.
Excise taxes brought in $5,707,000,000.
The Treasury also collected $3,069,000,000 in estate and gift taxes.
BY Jennifer Gonzalez Covarrubias
Mexico City (AFP) – Mexicans have smashed Donald Trump pinatas and torched the Republican White House hopeful’s effigy. Now they hope he will crash and burn in Tuesday’s US presidential election.
The New York billionaire became Mexico’s bogeyman ever since he called migrants “rapists” and drug dealers when he launched his campaign last year.
“The guy is a clown, a blowhard,” said Jafet Granados, an 18-year-old biotechnology student who was standing under Mexico City’s Angel of Independence monument.
“If he wins, he won’t do half of what he has promised.”
The government certainly sees risks in a Trump victory.
Finance Minister Jose Antonio Meade said while a Trump victory would undoubtedly cause more “volatility” in the markets, the country was on strong financial footing to deal with it.
And central bank chief Agustin Carstens, who warned in September that Trump could hit Mexico like a powerful “hurricane,” said this week that the government had a contingency plan to weather the storm.
With his vows to tear up the North American Free Trade Agreement and make Mexico pay to build a massive border wall, Trump’s rise in opinion polls just before the US vote contributed to the fall of the Mexican peso to 19.50 per dollar.
The peso however soared to 18.5563 per dollar in early Asian trading on Monday after the FBI lifted the threat of charges against Trump’s rival, Democrat Hillary Clinton, over her use of a private email server while secretary of state.
– Slim vs Trump –
Not everyone in Mexico is putting a brave face on a possible victory for the 70-year-old Manhattan property mogul.
Mexican telecommunications tycoon Carlos Slim has warned that a Trump administration would “destroy” the US economy by imposing big tariffs on imports.
“As we say in Mexico, being a drunk is different from being a bartender,” Slim quipped to reporters on Friday.
Trump lashed out at Slim last month after The New York Times published claims from women accusing the real estate baron of sexual misconduct. Slim is the newspaper’s largest shareholder.
Despite Trump’s unpopularity in Mexico, President Enrique Pena Nieto made the shocking decision to invite him to his official residence in August.
The invitation and Pena Nieto’s failure to forcefully criticize Trump during a joint news conference angered Mexicans.
Pena Nieto defended the move, saying it was important to open dialogue with someone who could be the next US president, though he admitted that he may have rushed to hold the meeting and failed to anticipate the anger it caused.
– Republican in Mexico: ‘Disgrace’ –
“The majority of Mexicans don’t want (Trump) to win,” Jose Antonio Crespo, a political expert at the Economic and Teaching Research Center, told AFP.
“The bilateral relation will be more quarrelsome than it normally is,” Crespo said.
Marcos Reyes, 46, who works at an advertising firm, said he feared that Trump would go through with mass deportations while those who remain in the United States would have “few opportunities” to have a better life.
Even the Republican Party’s representative in Mexico, Larry Rubin, is not voting Trump.
“It wouldn’t be good for the United States and much less for relations between the United States and Mexico,” Rubin, a dual US-Mexican citizen, told the Televisa network.
“His rhetoric has been very negative,” he said. “It would be a disgrace.”