Big government. Big spending. Big tax increases. //

IRS data showed that Minnesota loses “about ten households earning more than $200,000 for every six that it gains, which is the fifth worst ratio among the states.”

There are lies, damned lies, and government statistics — and maybe none is more damnable than the official unemployment rate which is half the actual rate, according to Rasmussen. Worse, the number of Americans who are neither retired nor employed is more than four times higher than July's official rate of 4.3%. //

Rasmussen surveyed nearly 9,000 American adults and found that in July the percentage of Americans who are unemployed and looking for work — this is the number that the Bureau of Labor Statistics (BLS) should report each month — was 8.4%. The BLS reported a rosy 4.3% unemployment rate last month, up from June's equally imaginary 4.1%.

From there, things only get worse. Because under Bidenomics, of course, they do.

One in four adult Americans is retired, which is nice for them. Fifteen percent say they're entrepreneurs (that can be anything from driving an Uber to launching a Silicon Valley startup), and just under 30% are employed by a private company.

Nearly one in 10 work for the government at one level or another. //

That means the percentage of Americans who could be working and perhaps would really like to be working but either can't find work or have given up finding work is 18.1%. That's more than four times the official unemployment rate.

It also means that the 45% of Americans who do work in the private sector are, in one way or another, supporting the 55% who don't, can't, or won't work.

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US Vice President Kamala Harris hailed the latest jobs report and praised ‘Bidenomics’ at an event in Washington, D.C. https://reut.rs/47wSDr1

7:10 PM · Aug 4, 2023. //

The Federal Reserve has raised interest rates in a constant effort to combat inflation. Typically, when you start raising interest rates at that pace, it leads to a recession. I say "typically" because it hasn't happened yet, and many economists assumed the Fed had pulled off the soft landing. However, the sudden contraction in the jobs market has brought those worries back to the fore, and people are panicking.

If the Biden-Harris administration was taking credit for the economy a year ago, then it should be made to take credit for it now. In truth, Biden's policies did create the sharp rise in inflation that we as consumers are still dealing with. In truth, that rise in inflation led the Fed to start hiking rates, which forced the economy to begin to contract. In truth, this has led us to where we are today.

According to Harris' spokesperson, guess who's somehow responsible for their bad jobs report?

"Donald Trump failed Americans as president, costing our economy millions of jobs, and bringing us to the brink of recession," Harris for President spokesperson James Singer said in a statement. //

Ultimately, it always comes down to the economy and Harris just gave a sure-fire reason why you should not vote for her, when she refuses to take responsibility for the administration's own actions. //

WackAMole
6 hours ago
She’s just using the Joe B playbook, lie and assume that the media will agree and the public is stupid.

Value of $3.08 from 1946 to 2024
$3.08 in 1946 is equivalent in purchasing power to about $49.62 today, an increase of $46.54 over 78 years. The dollar had an average inflation rate of 3.63% per year between 1946 and today, producing a cumulative price increase of 1,511.15%.

This means that today's prices are 16.11 times as high as average prices since 1946, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 6.207% of what it could buy back then.

The inflation rate in 1946 was 8.33%.

Argentina's Javier Milei is setting a great example for all world leaders. It's too bad most of them aren't paying attention. //

Times have been hard in Argentina, and the economically-minded libertarian Javier Milei ran for president of that South American nation on a platform of reducing regulations, reducing taxation, and shrinking government to make things better. And it's starting to work.

The catastrophe is yet another reminder of how brittle global internet infrastructure is. It’s complex, deeply interconnected, and filled with single points of failure. As we experienced last week, a single problem in a small piece of software can take large swaths of the internet and global economy offline.

The brittleness of modern society isn’t confined to tech. We can see it in many parts of our infrastructure, from food to electricity, from finance to transportation. This is often a result of globalization and consolidation, but not always. In information technology, brittleness also results from the fact that hundreds of companies, none of which you;ve heard of, each perform a small but essential role in keeping the internet running. CrowdStrike is one of those companies.

This brittleness is a result of market incentives. In enterprise computing—as opposed to personal computing—a company that provides computing infrastructure to enterprise networks is incentivized to be as integral as possible, to have as deep access into their customers’ networks as possible, and to run as leanly as possible.

Redundancies are unprofitable. Being slow and careful is unprofitable. Being less embedded in and less essential and having less access to the customers’ networks and machines is unprofitable—at least in the short term, by which these companies are measured. This is true for companies like CrowdStrike. It’s also true for CrowdStrike’s customers, who also didn’t have resilience, redundancy, or backup systems in place for failures such as this because they are also an expense that affects short-term profitability.

But brittleness is profitable only when everything is working. When a brittle system fails, it fails badly. The cost of failure to a company like CrowdStrike is a fraction of the cost to the global economy. And there will be a next CrowdStrike, and one after that. The market rewards short-term profit-maximizing systems, and doesn’t sufficiently penalize such companies for the impact their mistakes can have. (Stock prices depress only temporarily. Regulatory penalties are minor. Class-action lawsuits settle. Insurance blunts financial losses.) It’s not even clear that the information technology industry could exist in its current form if it had to take into account all the risks such brittleness causes. //

Imagine a house where the drywall, flooring, fireplace, and light fixtures are all made by companies that need continuous access and whose failures would cause the house to collapse. You’d never set foot in such a structure, yet that’s how software systems are built. It’s not that 100 percent of the system relies on each company all the time, but 100 percent of the system can fail if any one of them fails. But doing better is expensive and doesn’t immediately contribute to a company’s bottom line. //

This is not something we can dismantle overnight. We have built a society based on complex technology that we’re utterly dependent on, with no reliable way to manage that technology. Compare the internet with ecological systems. Both are complex, but ecological systems have deep complexity rather than just surface complexity. In ecological systems, there are fewer single points of failure: If any one thing fails in a healthy natural ecosystem, there are other things that will take over. That gives them a resilience that our tech systems lack.

We need deep complexity in our technological systems, and that will require changes in the market. Right now, the market incentives in tech are to focus on how things succeed: A company like CrowdStrike provides a key service that checks off required functionality on a compliance checklist, which makes it all about the features that they will deliver when everything is working. That;s exactly backward. We want our technological infrastructure to mimic nature in the way things fail. That will give us deep complexity rather than just surface complexity, and resilience rather than brittleness.

How do we accomplish this? There are examples in the technology world, but they are piecemeal. Netflix is famous for its Chaos Monkey tool, which intentionally causes failures to force the systems (and, really, the engineers) to be more resilient. The incentives don’t line up in the short term: It makes it harder for Netflix engineers to do their jobs and more expensive for them to run their systems. Over years, this kind of testing generates more stable systems. But it requires corporate leadership with foresight and a willingness to spend in the short term for possible long-term benefits.

Last week’s update wouldn’t have been a major failure if CrowdStrike had rolled out this change incrementally: first 1 percent of their users, then 10 percent, then everyone. But that’s much more expensive, because it requires a commitment of engineer time for monitoring, debugging, and iterating. And can take months to do correctly for complex and mission-critical software. An executive today will look at the market incentives and correctly conclude that it’s better for them to take the chance than to “waste” the time and money.

There is an alternative to shock therapy that has proven to be effective in addressing a debt crisis in the long term. The alternative is to enact effective fiscal rules constraining deficits and debt accumulation. The Swiss debt brake has proven to be the most successful of these rules-based approaches to fiscal policy. Three decades ago, Switzerland experienced unsustainable growth in debt. They responded with a debt brake that caps the growth in spending at the long-term rate of growth in the economy. Over a transition period, the Swiss were successful in bringing expenditures into balance with revenues and in stabilizing and reducing debt. //

The Swiss debt brake is very much a bottom-up approach to reform. Debt brakes were first enacted at the cantonal level and only later at the federal level. The debt brake was incorporated into the Swiss Constitution through a referendum with support from 85 percent of voters. The debt brake provides for a transition period in which expenditures are brought into balance with revenue. The debt brake has automatic triggers, reducing spending when deficits exceed a tolerance level. Deficit spending is permitted in response to emergencies, but the deficits must be offset by surplus revenues in the near term.

After reports that a secret 50-year-long “petrodollar” agreement between Saudi Arabia and the U.S. failed, some warned of the U.S. dollar's global demise. What actually happened?

Contradictions: Some said the agreement required Saudi Arabia to keep oil priced in dollars. But others said that wasn't the nature of the deal.

For Context: In 1974, the countries reportedly struck a then-secret agreement to swap U.S. aid for Saudi Arabia's investment of petrodollars in U.S. Treasurys. There's been an "implicit" agreement to keep oil priced in dollars since the 1970's, but nothing official, MarketWatch (Center bias) told AllSides. Oil is typically priced in dollars worldwide, though Saudi Arabia has recently signaled openness to accepting other currencies.

Donovan's Narrative: Paul Donovan, chief economist at UBS Global Wealth Management, explained the agreement while noting that oil "has always traded in non-dollar currencies," and that contrary reports were born from "confirmation bias" in the crypto world, where many "desperately want to believe in the dollar’s demise." Donovan said Saudi Arabia has "indicated it was happy to negotiate oil sales in other currencies." MarketWatch told AllSides that "practically all of the Saudis oil revenues are priced in dollars."

How The Media Covered It: Outlets like Straight Arrow News (Center bias) and Newsmax (Lean Right bias) reported that the "agreement" to keep oil priced in dollars fell through, though they were contradicted by MarketWatch and ZeroHedge (Lean Right bias), who focused on Donovan's claim that the story was "fake news."

If the laureates understood the difference between academic theory and policy practice, they would not have issued their silly letter. //

About the best thing that Trump can say in favor of his economic policies is that they are opposed by a group of Nobel economists.

It takes time. Normal people know transformation doesn't happen overnight. //

For 30 years, Argentines faced rising food prices every week.

Every week for 30 years.

Well, the libertarian free-market economist President Javier Milei has steered Argentina in the correct direction because, for the first time in 30 years, the country did not experience food inflation. //

Milei is obviously on the correct path. He is also the first Argentine president not to pass a new law in his first six months in office.

To put it bluntly, Social Security, Medicare, and Medicaid are cannibalizing the entire federal budget. //

CBO increased the estimated budget deficit for the current fiscal year by $408 billion and the 10-year budget deficit by nearly $2.1 trillion. //

The (bloated) spending bills passed in March added nearly $1.3 trillion to the 10-year deficit, as higher spending this fiscal year leads CBO to assume (not incorrectly, in most cases) that spending will continue at those higher levels in the future.

Spending on Medicaid and Obamacare subsidies will increase deficits by $511 billion in the coming decade, in large part because more people will continue signing up for “free” coverage. The budget office also noted that “the recent surge in immigration [has] made more people than CBO previously estimated eligible for” Obamacare subsidies, accounting for an increase in projected enrollment. //

To put it bluntly, Social Security, Medicare, and Medicaid are cannibalizing the entire federal budget. Unless and until Congress stops the “Mediscare” rhetoric and gets serious about reforming these programs, our financial situation will continue to get worse. And Lord help the next generation if we don’t wake up and come to our senses sooner rather than later.

 The Supreme Court ruled Thursday that a part of President Trump's 2017 'Tax Cuts and Jobs Act' that levied a tax on capital appreciation is constitutional. Justice Brett Kavanaugh wrote the majority opinion. Justices Clarence Thomas and Neil Gorsuch dissented.

The court ruled 7-2 that the mandatory repatriation tax, or MRT, is constitutional under the taxation regimes defined in Article I and the 16th Amendment. In short, the MRT imposed a one-time requirement for US citizens and companies to repatriate money held overseas. //

The Moores had earned $0 from their investment, but the value of their investment had increased because the business they invested in was successful. Because their investment was successful, that unrealized gain, which could totally disappear in a few months if things went pear-shaped, was taxed.

Why is this important?

The lodestar of the far left is "income inequality." They want everyone to be poor but them. Where their policies are defeated is by frugality and investment. //

The wealth tax's strategy is to prevent the accumulation of intergenerational wealth and penalize those who work hard, save, and invest in favor of those who consume. Every time your stock portfolio or home increases in value, a wealth tax would make that gain taxable, even if you didn't cash out. //

FreeWilledThinker
an hour ago
I just read the opinion and, even though I am a Constitutionalist and favor strict construction, I would have voted with the majority on this one. The reason why is due to the pass-through nature of the company. Every LLC in the U.S. works this way, where you get a K-1 and get taxed, even where not a cent has come into your bank account.

I think the muddy water comes from the ownership mechanism. As a shareholder, the Moore's wish to treat the pass-through as though it is not taxable on the owned company's income, but it would be were it based in the U.S. and did not pay any tax on the base income. //

Buckeye kamief
18 minutes ago
But that interest would be taxable if NOT in an IRA -- which is the crux of this. These folks were catching gains on a foreign corporation NOT in an IRA, yet because of reinvestment, they weren't paying any taxes. Compare to US tax code in existence -- if you have a stock and it's in a dividend re-investment program, which is effectively exactly what they were doing, you DO PAY TAXES on those dividends, even though you chose to re-invest. That's another reason I agree with the USSC on this one. Their Indian corporation was making money, but not calling it a "dividend", and they kept putting it back in....sorry that's basically tax evasion by US code.

If you follow family-run businesses over multiple generations, a common theme will emerge that is so statistically significant that even Dave Ramsey warns families about it.

When the first generation starts a business, it is often passed down to the second generation who directly witnessed the blood, sweat, and tears that both of their parents invested to make it sustainable. This second generation generally feels an obligation to the investments made by their parents and generally runs the business well. But the third generation has no historical appreciation for the business. They were not alive when the business was born and can’t comprehend a world without it. If the business was passed from the first to the second generation, of course, it will be passed to the third which causes a sense of entitlement. This entitlement and lack of perspective are at the core of why a disproportionate number of third-generation business owners fail.

The United States is now in its third generation of bureaucracy following World War 2. The first generation was directly a part of the pain and sacrifice made around the world to defeat an axis of evil. The second generation of bureaucracy grew up in the shadows of World War 2 and even got a taste of it during the Cold War. But the third generation of bureaucrats and technocrats embedded in unelected offices earning mid-six-figure salaries have none of this. Their version of a threat to democracy is the prospect of a democratic reelection of Donald Trump.

Just like a family business, this third-generation bureaucrat is running this country into the ground and is stirring a populist revolt that I don’t think they understand. Let me explain.

As Zoltar Pozsar, New York-based economist and investment research director at Credit Suisse, put it recently: “That’s dusk for the petrodollar… and dawn for the petroyuan.”

U.S. Dollar Still The World’s Reserve Currency, But Its Dominance Is Slipping

Before you dismiss Pozsar’s comment as an exaggeration, consider that other major OPEC nations and BRICS members (Brazil, Russia, India, China and South Africa) are either accepting yuan already or strongly considering it. Russia, Iran and Venezuela account for about 40% of the world’s proven oilfields, and the three sell their oil in exchange for yuan. Turkey, Argentina, Indonesia and heavyweight oil producer Saudi Arabia have all applied for admittance into BRICS, while Egypt became a new member this week.

What this suggests is that the yuan’s role as a reserve currency will continue to strengthen, signifying a broader shift in the global power balance and potentially giving China a bigger hand with which to shape economic policies that affect us all.

On January 17, the Saudi minister of finance, Mohammed Al-Jadaan, announced that the Saudi state is open to selling oil in currencies other than the dollar. “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Al-Jadaan told Bloomberg TV.

If the Saudi regime does indeed embrace substantial trade in currencies other than the dollar as part of its oil-export business, this would signal a shift away from the dollar as the dominant currency in global oil payments. Or measured another way, this would signal the end of the so-called petrodollar.

But how large of a shift is this? With the increasingly frequent Saudi comments about trading in nondollar currencies, we’ve also seen an increasing number of pundits announcing the “collapse” of the dollar or the imminent implosion of the dollar’s currently outsized global power.

Will a shift away from the dollar in the global oil trade really lead to a big relative decline in the dollar? Probably and eventually. But a number of other dominoes would need to fall first, most especially the domino we call “Eurodollars.”

On the other hand, it would be foolish to simply dismiss the potential end of the Saudi preference for the dollar with hand-waving. The end of the petrodollar would indeed weaken the dollar, even if this would not be a mortal blow in itself. Moreover, it is especially foolhardy to ignore the status of the petrodollar because that status also has geopolitical implications. Saudi comments on the dollar signal that the Saudis no longer consider its alliance with the United States to be as important as it has been since the 1970s. What’s not an immediate economic problem for the US regime or the dollar may nonetheless be an immediate geopolitical problem. //

But if global dollar dominance truly is in decline, we could potentially expect both higher domestic price inflation and higher interest rates than what Americans have become accustomed to over the past thirty years. In other words, as the dollar declines, the US regime will no longer be able to monetize debt and heap up immense new deficits without fear of high price inflation or falling Treasury prices. The end of the petrodollar is not a reason to panic right now, but it is the latest sign that the US regime’s power via the dollar is being reined in. //

The Petrodollar Is a Type of Eurodollar
In terms of its economic role, however, the petrodollar has always just been a type of Eurodollar.

What is a Eurodollar? According to Robert Murphy:

The term Eurodollar actually refers to any US dollar-denominated deposit held at a financial institution outside of the United States, or even a USD deposit held by a foreign bank within the US. It thus has nothing to do with the euro currency, and is not restricted to dollars held in Europe; they are dollar deposits that are not subject to the same regulations as US dollars held by American banks, nor are they guaranteed by FDIC (Federal Deposit Insurance Corporation) protection (and hence they tend to earn a higher rate of return).

The trade in Eurodollars is huge, although it’s difficult to quantify exactly how huge. One estimate puts Eurodollar assets at around $12 trillion. For context, we can consider that all assets in US banks total about $22 trillion. Or put another way, “offshore dollar banking now amounts to about half of the US total.” So, the Eurodollar economy is very large, and this “dollar zone” is also a key component of many of the world’s leading economies, given that half or more of the world economy lies in that zone.

In contrast, in 2020, the petrodollar trade amounted to less than $3.5 trillion annually.

Every nation has had to convert its currency to the U.S. dollar, making it the de facto global currency. Thanks to Joe Biden, it’s all gone. //

The petrodollar agreement with Saudi Arabia began in 1974, two years into Joe Biden’s first term as a United States senator. It ended this week, a half-century later, during Biden’s first term as U.S. president. //

The debacle mirrors Biden’s disastrous Afghanistan withdrawal: decades of work undone and dismantled in one brief instant because of incompetence and stupidity with nothing to show for the investment, work, and toil. Gone. //

What will replace the petrodollar as a global, commodities-based currency? Likely the Chinese yuan. The Biden administration’s radical push to “go green” has only strengthened China, as my organization, Power The Future, documented in a congressional report. I testified before the House Ways and Means Committee on this very issue, but rather than discuss it, House Democrats chose to call me names. I can guarantee you Rep. Bill Pascrell, D-N.J., an 87-year-old bitter partisan who wagged his finger at me over “mean tweets” rather than discuss his trillions in spending to buy Chinese wind and solar, has no idea the petrodollar ended. I can guarantee you the useless staffers in his office have no comment on the matter. //

It is only a matter of time until America is hooked on Chinese green the way Americans are poisoned by Chinese fentanyl, and then China asks us to convert our currency to theirs for ongoing purchases. As America built the Saudi and Russian oil industries, we are now building the Chinese green industry. //

But the petrodollar is gone forever, and with it, America’s role in the world is diminished.

Atrox
20 hours ago
Hearing the House bitch, moan, complain, demand and lose every time, is just trying. The HOUSE controls the money, but they never use it. IF you want change and you want to make demands, cut the money off and watch what happens. ... //

Tech in RL Atrox
18 hours ago
This problem can be laid at the feet of Jimmy Carter. It was during his administration that the government adopted current services baseline budgeting, which means everything in last year's budget is moved forward to the next year's budget along with automatic inflation increases UNLESS Congress votes to rescind funding or a sunset provision was provided in previous budgets. That's how you get "cuts" when they're just reductions in increases. The increases are automatic, and to interfere with that is a "cut".

Because of this, rescinding funding to DOJ, FBI, etc. is almost impossible because it requires those amendments to be passed by both the House and Senate and signed by the president. Under sane budget rules, the House could simply omit funding, but under insane current budget rules, they actually have to pass language that says they are removing funding, something that cannot happen without bipartisan support.

The rest of the world uses zero-based budgeting, which means everything in a budget must have explicit language including spending. Our insane policies include everything from last year's budget with the written budget amending what was spent last year.

In other words, even if every Republican supported zeroing out the DOJ's budget, they could not do it without Senate and presidential approval. //

INTJ ECoolidge19
5 hours ago
Congressional Budget Act of 1974, correct.

The petrodollar — a deal, not a currency — was born out of the late 1970s energy crisis. The United States, having just gone off the gold standard, struck a deal with Saudi Arabia — one of the largest producers of petroleum in the world — that meant the Saudis would price their oil exclusively in United States dollars and that any surplus revenues from their sales of petroleum would be invested in U.S. Treasury bonds. This had several effects: It ensured the U.S. a supply of oil, it established the U.S. dollar as the global reserve currency, and it helped the U.S. maintain what was, by today's standards, its modest federal debt.

That agreement is now over. //

Oil being denominated in U.S. dollars alone has significance beyond the categories of oil and finance. By mandating that oil be sold in U.S. dollars (DXY), the agreement elevated the dollar’s status as the world’s reserve currency. This, in turn, has profoundly impacted the U.S. economy. The global demand for dollars to purchase oil has helped to keep the currency strong, making imports relatively cheap for American consumers. Additionally, the influx of foreign capital into U.S. Treasury bonds has supported low interest rates and a robust bond market. //

First, the effect on the dollar: Weakening the dollar, as this is bound to do, will have one major effect, namely, raising the price of anything imported into the United States. And from whom does the United States import the most goods, from knick-knacks to industrial electrical transformers? China. China, we may well remember, is a country that is not particularly friendly towards the United States. Second, the end of the dollar as the global reserve currency will almost certainly lower foreign investment in the U.S. Treasury bonds that are largely used to finance America's runaway spending. Interest rates, inflation, bond markets, and the public debt are all in for a sudden, dramatic readjustment, and it won't be good for American consumers.

There is a billionaire who, for the most part, has gone under the radar pushing "reimagining capitalism." His name is Pierre Omidyar. Omidyar was born in France to Iranian parents. He later moved to the United States, where he founded eBay.

With over six billion dollars in personal wealth, he founded the Omidyar Network to influence not just the private sector but, more importantly, to inject human capital into the federal bureaucracy. His intent seems clear: to make structural changes. What type of changes? It’s no secret that Omidyar has his acolytes who are all-in on equal results, not equal treatment. In 2020, his Network produced a pamphlet titled: “Call to Reimagine Capitalism in America.” On its opening page, it calls for:

A more democratic economy is one in which the real creators – working people, consumers, individuals, small businesses, and families – can have equal voice, hold power, and get ahead.

Further into the manifesto, it laments that America is rife with badness:

“structural racism, colonialism, paternalism,”

It calls for:

“an explicitly anti-racist and inclusive economy.” //

Since 2004, the Omidyar Network has spent $1.89 billion on social justice causes. //

The top-heavy influence of the Omidyar Network and related and funded entities and the injection of ideologues is unknown. Soros has had a remarkable influence on local politics by targeting district attorneys and local politicians. Omidyar is influencing policy at the federal level. //

anon-m0b0
15 hours ago edited
So a rich billionaire with buckets of money wants to create a society where he has more power and the people he says he is "helping" will be totally impoverished by the time he is done.

Its almost as if he accidentally created eBay and made money from it. Because he doesn't really believe in free markets.