RUTHFULLY YOURS

https://thehill.com/opinion/finance/3851981-bad-news-bidens-agenda-will-drive-inflation-higher/

President Biden claims he is laser focused on combatting inflation. His policies say otherwise.

First off, there was little suggestion in Biden’s rambling State of the Union address that exorbitant federal spending – blamed by many economists for sky-high prices – would come down any time soon.  

In addition, Biden’s proposed Buy American program will drive infrastructure costs higher, just as it did under Presidents Obama and Trump.

Add to those two price-inflating factors Biden’s ongoing dedication to unionization, which drives up labor costs, his war on fossil fuels, which has discouraged higher oil and gas production, and his push to increase regulations on businesses, and the Federal Reserve will have its hands full bringing inflation down to 2 percent.

Biden has yet to admit the connection between spending and price inflation. In his speech, he again passed the buck, saying, “Inflation has been a global problem because the pandemic disrupted our supply chains and Putin’s unfair and brutal war in Ukraine disrupted energy supplies as well as food supplies, blocking all that grain in Ukraine.” 

See? It’s all the fault of COVID-19 and Vladimir Putin.

And yet, voters connect those dots, and blame Biden’s blowout budgets for the decades-high hit to middle class real incomes. Consequently, the president dishonestly brags about bringing our deficits down even though the decline is from emergency levels to still elevated totals. We are nowhere near back to “normal.”

In his speech, Biden promised his coming economic plan “is going to cut the deficit by another $2 trillion.” And yet, his address was peppered with expensive new promises.  

https://www.wsj.com/articles/flying-object-alaska-shot-down-biden-administration-chinese-spy-balloon-1199de88?mod=opinion_lead_pos2

The U.S. military shot down what the Pentagon and White House called an “object” flying over Alaska on Friday, and what fresh interloper is this? The details were few by our deadline, but say this of the incident: The Biden Administration sure seems more awake to threats to the American homeland, no doubt informed by the blowback after last week’s Chinese spy balloon imbroglio.

The Administration on Friday wasn’t saying what the downed object is, where it may have come from, or what it was doing. The Administration said it became aware of the flying mystery on Thursday night, and U.S. pilots sent to take a look concluded it wasn’t manned. An F-22 fighter jet took down the object, which is roughly the size of a car, and it fell onto frozen water in U.S. territorial waters.

The Pentagon says the object posed a potential threat to commercial air traffic flying at about 40,000 feet, unlike last week’s spy balloon at roughly 60,000 feet. But that alone can’t explain the sudden sense of urgency. A Biden excuse for waiting to take down the balloon was to let the Pentagon track it and gather intelligence. A Pentagon official said in a hearing on Capitol Hill this week that another reason not to pop the balloon while it was over Alaska was to avoid a recovery in potentially deep waters or areas with ice cover.

But now the Administration is taking no chances, either military or political. The White House seems to have underestimated the bipartisan political anger at allowing a Chinese spy craft to wander over U.S. military sites for days before it was shot down.

https://abcnews.go.com/Politics/southwest-airlines-executive-face-lawmakers-after-holiday-chaos/story?id=97002900

Southwest Airlines Chief Operating Officer Andrew Watterson faced lawmakers Thursday in a highly-anticipated Senate Commerce Committee hearing to answer for the airline’s historic holiday meltdown.

“Let me be clear: we messed up,” Watterson testified. “In hindsight, we did not have enough winter operational resilience.”

The largest domestic airline in the U.S., Southwest canceled more than 16,000 flights over an 11-day period at the end of December due to a combination of severe winter weather, staffing shortages and technology issues, the company said. Thousands were left stranded in airports across the country instead of at home for the holidays.

Lawmakers want the company to explain the massive disruption at Thursday’s Senate hearing, titled “Strengthening Airline Operations and Consumer Protections.”

“The American people have a lot of questions about the Southwest debacle in December that left passengers stranded or unable to be with loved ones over the holidays,” said Sen. Maria Cantwell, D-Wash., Chair of the Senate Committee on Commerce, Science and Transportation on Wednesday. “We’re going to ask for answers to those questions. I’m interested in hearing the pilot’s testimony that this debacle could have been avoided if Southwest had made investments sooner.”

https://www.wsj.com/articles/new-york-vs-florida-comparative-statistics-budget-medicaid-population-taxes-752ee7b6?mod=opinion_lead_pos2

Comparative governance is a useful course of study, not least because bad governance is so costly to people and prosperity. We often write about the migration from the Northeast to Florida and other states, but sometimes the contrast is best illuminated with some data.

Take a look at the nearby chart comparing some key indicators of governance in a pair of states that not long ago were about the same size—New York and Florida. As recently as 2013 the two states had similar populations, but so many people have moved to the Sunshine State that it’s now roughly 2.6 million people larger.

A Tale of Two States
Yet, believe it or not, Florida’s state budget as measured in the latest proposals from the two governors, is only half the size of New York’s. This is in part a reflection of their tax burden, which in Florida is much smaller. If Florida politicians want to spend more, the state’s economy has to grow more. New York’s politicians can raise income taxes, as they do with great frequency.

Florida has no state income tax, while New York’s top tax rate is 10.9%. In New York City, the top rate is 14.8%, while in Miami it’s zero. Any guess why Ken Griffin moved his Citadel hedge fund to Miami instead of New York when he was looking for an alternative to Chicago? Florida has a 6% sales tax, higher than New York’s, but New York City’s combined state and city sales tax is 8.875%.

https://www.wsj.com/articles/joe-biden-deficit-congressional-budget-office-spending-fiscal-year-11675979171?mod=opinion_lead_pos1

President Biden boasted during his State of the Union address about cutting the deficit by a record $1.7 trillion. His putative conversion into a born-again deficit cutter is belied by this week’s Congressional Budget Office federal budget report for January, which shows the deficit has doubled in the first four months of this fiscal year.

CBO reports that the budget deficit from October through January swelled to $522 billion from $259 billion in the same period last year after adjusting for a timing shift in payments. Receipts are tracking $43 billion lower than last year, mostly owing to reduced individual income taxes, while spending is running $220 billion higher.

The Federal Reserve’s remittances to the Treasury from earnings on its portfolio of securities have decreased to less than $1 billion from $37 billion. For most of the last decade, the Fed was a profit center for Treasury owing to the interest paid on its accumulation of Treasurys and mortgage-backed securities. But now the Fed is paying higher interest on bank reserves. Meantime, net interest payments on U.S. debt increased by $58 billion in the first four months of the year.

Entitlement spending has grown by $76 billion owing to inflation adjustments and the Administration’s public-health emergency declaration, which has prevented states from returning to their pre-pandemic Medicaid policies. The Administration plans to end the emergency in May, but many people removed from Medicaid will be eligible for expanded Affordable Care Act subsidies.