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SOME THOUGHTS ON THE MID-TERMS

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So, the midterms are finally over. For months, those of us who like to watch American politics were expecting an epic to the death struggle that would vindicate the winner and devastate the loser.

But, as the Fates would have it, that is not what happened. At the time this article was written, the Democrats held 225 seats in the House of Representatives compared to the Republicans 197 seats (with thirteen seats still to be decided). And in the Senate, the Republicans held 51 seats to the Democrats 44 (with two seats being held by other parties and with four still undecided).

What we got was less an Alien versus Predator fight to the death and something more akin to two schoolboys getting into a schoolyard brawl with each claiming victory because they’d managed to bloody the other’s nose.

For months we’d been told that the Democrats would end up dominating both the House of Representatives and the Senate as the American people voiced their disapproval of the Trump Presidency. But that didn’t happen either. The Republicans may have lost their majority in the House of Representatives (and, indeed, many moderate Republicans did not do so well), they managed to gain a definitive majority in the Senate.

As Sarah Huckabee Sanders, the White House Press Secretary put it: “anybody that was anticipating a blue wave tonight’s not going to get it.”

Several factors played a role in determining the outcome of the election.

The first thing to note is that the results of the election were not a signal of approval for far-left Democratic policies. It was moderate Democrats who won seats, not radically progressive ones. This would suggest that as many Americans reject radical identity politics as those who feel dissatisfied with the Trump Presidency. And it would suggest that the Democrat’s best strategy for winning the next Presidential election is to put forward a moderate candidate with a moderate platform.

The second thing to note is that the Republican’s triumph in the Senate had as much do with demographics as it did with politics. The electoral map made Democratic Senate seats more vulnerable than Republican ones. That said, however, it also turns out that the Democrats failed to take advantage of an advantageous news cycle. Had they nominated more moderate candidates rather than radically progressive ones they would have found themselves a lot more successful.

The third thing to note is that voter motivation played an enormous role in determining the outcome of the election. One of the reasons the Republicans lost the House of Representatives was because the Democrats were more motivated to vote than they were.

Actually, this was recognised early on. Bill Stepien, the political director for the White House, urged President Trump to motivate his base by making the election a referendum on his own performance. Clearly, Stepien recognised that President Trump has a special talent for rallying his supporters. And, as the Daily Wire’s Ben Shapiro noted, every district Trump visited ended up voting Republican.

The fourth things to note is that the Democrats managed to do better in the suburbs than the Republicans did. The Democrats managed to win suburbs all the way from the eastern seaboard to Nevada and even managed to expand into Houston, Dallas, Oklahoma City, and Richmond. As Liesl Hickey, the executive director of the National Republican Congressional Committee in 2014, said “Republicans have lost the suburbs. I don’t know if they’ve lost them forever, but we’ve definitely lost them for now.”

That the outcome of the midterms will have political implications should be obvious to everyone. On the negative side, a Democrat-controlled House of Representatives will make it difficult for the Republicans to enact their legislative agenda over the next two years. It puts Trump’s immigration and economic policies in danger. It puts his administration’s goal to build a border wall, deregulate business, and cut taxes in jeopardy.

But, on the more positive side, however, the outcome of the midterms may inspire more transparency from the Executive as President Trump negotiates trade deals with Japan and the European Union. And as much a Democrat-controlled House of Representatives puts the Republican agenda in jeopardy, a Republican-controlled Senate creates a roadblock for the progressive agenda indicative in the Democrat’s more radical policies.

And there are the long-term implication, as well. The Republican’s control of the Senate will make it difficult for the Democrat’s to gain control over it in 2020. However, it also revealed the necessity for the Republican Party to expand its conservative base, especially in lieu of the 2020 Presidential election. In the 2000, 2004, and 2016 Presidential elections, a switch of only 150,000 votes would have nullified all of them.

The midterm election resulted in a victory for neither the Democrats nor the Republicans. It did not deliver the much-prophesied blue wave for the Democrats and it didn’t allow the Republicans to retain control of Congress. What the midterms produced was a balanced, moderate Congress. The manner in which people choose to interpret the results of this election will depend largely upon their political orientation. Both Democrats and Republicans have the choice to see the results as either a triumph or a defeat. And exactly how they react will determine how well their party does at the next Presidential election.

Who knows what will happen at the next Presidential election. Two years can be a lifetime in politics.

 

REFERENCES:

1. https://www.nationalreview.com/2018/11/midterm-election-split-decision/
2. https://www.nationalreview.com/2018/11/republican-senate-control-frightens-democrats/
3. https://www.vox.com/policy-and-politics/2018/10/16/17951596/kavanaugh-trump-senate-impeachment-avenatti-democrats-2020-supreme-court
4. https://www.nytimes.com/2018/11/07/opinion/democrats-midterms-house-senate.html?rref=collection%2Fsectioncollection%2Fopinion&action=click&contentCollection=opinion&region=rank&module=package&version=highlights&contentPlacement=6&pgtype=sectionfront
5. https://www.nationalreview.com/news/republicans-win-senate-control-midterms/
6. https://www.politico.com/story/2018/11/07/trump-democrats-2018-elections-midterms-972254
7. https://www.politico.com/magazine/story/2018/11/07/please-stop-saying-red-wave-inside-democrats-takeover-of-the-house-222228
8. https://www.politico.com/story/2018/11/07/midterm-elections-2018-top-takeaways-970328
9. https://www.politico.com/story/2018/11/07/trump-2020-elections-campaign-968942
10. https://spectator.org/a-much-much-better-gop-night-than-had-been-forecast/
11. https://spectator.org/gop-knocks-off-four-senate-democrats/
12. https://spectator.org/florida-survives-category-5-liberalism/
13. https://www.washingtonexaminer.com/opinion/take-it-from-this-conservative-republicans-disappointed-in-the-midterm-elections
14. https://www.washingtonexaminer.com/opinion/christian-voters-were-key-in-gops-midterm-victories
15. https://www.washingtonexaminer.com/opinion/editorials/blue-wave-turns-out-to-be-ordinary-election-rather-than-an-extraordinary-rebuke-to-trump
16. https://www.dailywire.com/news/38084/democrats-are-going-about-house-and-senate-popular-ashe-schow
17. https://www.foxnews.com/opinion/liz-peek-midterm-elections-prove-trumps-critics-still-underestimate-him-as-blue-wave-becomes-a-ripple?cmpid=NL_opinion
18. https://www.foxnews.com/opinion/midterm-elections-democrats-it-would-be-a-cataclysmic-error-to-make-pelosi-your-next-house-speaker?cmpid=NL_opinion
19. https://www.redstate.com/brandon_morse/2018/11/06/ted-cruz-defeats-beto-orourke-texas-stays-red/
20. https://hotair.com/archives/2018/11/07/midterm-result-push-2020
21. https://hotair.com/archives/2018/11/07/trump-dems-investigate-youll-find-works-ways/
22. https://finance.townhall.com/columnists/danieljmitchell/2018/11/07/five-takeaways-from-the-2018-elections-and-implications-for-liberty-n2535487?
23. https://www.foxnews.com/politics/polls-close-in-six-states-as-dems-look-for-telltale-signs-of-potential-blue-wave
24. https://www.reuters.com/article/us-usa-election/democrats-aim-to-restrain-trump-after-seizing-u-s-house-idUSKCN1NB1CW
25. https://www.reuters.com/article/us-usa-election/democrats-aim-to-restrain-trump-after-seizing-u-s-house-idUSKCN1NB1CW
26. https://www.breitbart.com/politics/2018/11/07/donald-trump-defends-big-victory-for-republicans-in-midterm-elections/
27. https://www.breitbart.com/politics/2018/11/06/live-updates-2018-midterm-election-results/
28. https://www.breitbart.com/politics/2018/11/07/republicans-make-senate-gains-as-america-rejects-gun-control-again/
29. https://www.dailywire.com/news/38075/klavan-democrat-voters-explain-were-stupid-and-andrew-klavan
30. https://www.dailywire.com/news/38089/8-big-takeaways-midterm-elections-ben-shapiro

WHY TRUMP WON

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Not even Cassandra, cursed to prophesise but never be believed, could have predicted the tumultuous change that occurred in 2016. In June, just over half of the British public (51.89%) voted to leave the European Union. Then, in November, Donald Trump defeated Hillary Clinton to become the President of the United States.

And not only did Trump defeat Clinton, winning thirty of America’s fifty states (though Clinton did win the popular vote), the Republican Party utterly decimated the Democrats. Trump won thirty of America’s fifty states (Clinton, admittedly, did win the popular vote). The Republicans have taken control of the House of Representatives, have a majority in the Senate, hold thirty-three state governorships, and control thirty-two state legislatures.

Brexit’s victory and Trump’s triumph comes off the back of a deeper cultural movement. It is a movement that rejects the doctrines of political correctness, identity politics, diversity, and equality in favour of greater intellectual rigour and personal freedom. Trump’s gift to this movement has been to expand the Overton Window. As an indirect consequence of his uncouthness, the boundaries of public discourse have been expanded exponentially.

Throughout his campaign, the media treated Trump as a joke. He hasn’t got a hope in Hades, they claimed. In the end, however, they were proven wrong. Trump won through a mixture of hard-line policies on immigration and a rejection of political correctness and far-left politics. And he won through his astounding ability to market himself to the American people.

The first thing to note is that Trump thrives on scandal. Much of this ability emanates from his already tarnished reputation as a rude, uncouth, bully and womaniser. Trump has never denied these facets of his personality (in some cases he has even emphasised them). What this means is that those who voted for Trump did so despite the significant faults in his character. Consequentially, accusations involving sex or money (the two things people truly care about) has little effect on him.

Then there is his skill as an emotional manipulator. Trump appeals directly to the emotional sensibilities of the people by using fear-mongering rhetoric to circumvent the mind’s critical faculties. Rather than emphasising the importance of maintaining the integrity of immigration law, Trump chooses to emphasise the crimes – rapes, murders, drug offences – committed by some illegal immigrants. After this, Trump promotes anger by setting up an out-group as the enemy. As a result, Trump implies not only that he is the best man to solve these issues, but that anyone who opposes him is somehow anti-American.

Finally, there is Trump’s use of simplicity and repetition as persuasive tools. Nuanced and boring statements can be taken out of context. By contrast, simple and heavily repetitive statements are harder to take out of context. But, more importantly, such statements are also more likely to be believed.

Much of Trump’s use of simplicity has its basis in his relationship with language. Trump speaks at a fourth-grade level and averages one syllable per word. While it would be easy to dismiss this as unsophisticated or low brow, it is important to remember that small words have a stronger and more immediate emotional impact, are more accessible to a wider audience, and are considered more believable. Cognitive fluency bias means that that the easier it is to understand something, the more likely it is to be believed. As a consequence, Trump’s use of small, simple words means he is more likely to be understood and, therefore, is more likely to be believed.

Perhaps the most important aspect of Trump’s magnetism is his ability to bypass the traditional mediums of communication and appeal directly to the American people. Unlike Hillary Clinton, who relied upon celebrity support and the mainstream media, Trump and his supporters used social media to appeal directly to voters. The lesson is clear: voters like for politicians to speak to them as equals, not preach to them from on high.

DEMAND-SIDE ECONOMICS VERSUS SUPPLY-SIDE ECONOMICS

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On May 9th, 2018, the YouTube Channel, Juice Media uploaded a video entitled “Honest Government Ad: Trickle Down Economics.” In the video, the rather obnoxious and condescending female presenter tells the audience that the reason Australia has “one of the fastest growing inequality rates in the world” is trickle-down economics, which she defines as “when we [the government] piss on you and tell you it’s raining.”

According to the video, tax cuts for investors, entrepreneurs, and business are directly correlated with poverty and the lack of wage growth in Australia. The presenter argues that the government cuts taxes on the rich while simultaneously claiming that they don’t have enough money for healthcare (which would be a lot more effective if people took responsibility for their own health), renewable energy (which is really an excuse to take control of the energy market), and the ABC (which doesn’t deserve a cent of anyone’s money).

The primary problem with the video is that the premise of its argument does not actually exist. There is not a single economic theory that can be identified as trickle-down economics (also known as trickle-down theory). No reputable economist has ever used the term, nor have they ever presented an argument that could be said to conform to the idea of what it is supposed to be. As Thomas Sowell (1930 – ) wrote in his book, Basic Economics:

“There have been many economic theories over the centuries accompanies by controversies among different schools and economists, but one of the most politically prominent economic theories today is one that has never existed among economists: the trickle-down theory. People who are politically committed to policies of redistributing income and who tend to emphasise the conflicts between business and labour rather than their mutual interdependence often accuse those opposed to them of believing that benefits must be given wealthy in general, or to business in particular that these benefits will eventually trickle down to the masses of ordinary people. But no recognised economist of any school of thought has ever had any such theory or made any such proposal.”

The key to understanding why political players disparage pro-capitalist and pro-free market economic policies as trickle-down economics is understanding how economics is used to deceive and manipulate. Political players understand that simple and emotionally-charged arguments tend to be more effective because very few people understand actual economics. Anti-capitalists and anti-free marketeers, therefore, use the term trickle-down economics to disparage economic policy that disproportionately benefits the wealthy in the short term, and increases the standards of living for all peoples in the long-term

The economic theory championed by liberals (read: leftists) is demand-side economics. Classical economics rejected demand-side economic theory for two reasons. First, manipulating demands is futile because demand is the result of product, not its cause. Second, it is (supposedly) impossible to over-produce something. The French economist, Jean-Baptiste Say (1767 – 1832) demonstrated the irrelevance of demand-side economics by pointing out that demand is derived from the supply of goods and services to the market. As a consequence of the works of Jean-Baptiste Say, the British economist, David Ricardo (1772 – 1823), and other classical economists, demand-side economic theory lay dormant for more than a century.

One classical economist, however, was prepared to challenge the classical economic view of demand-side economics. The English economist, Thomas Robert Malthus (1766 – 1834) challenged the anti-demand view of classical economics by arguing that the recession Great Britain experienced in the aftermath Napoleonic Wars (1803 – 1815) was caused by a failure of demand. In other words, purchasing power fell below the number of goods and services in the market. Malthus wrote:

“A nation must certainly have the power of purchasing all that it produces, but I can easily conceive it not to have the will… You have never I think taken sufficiently into consideration the wants and tastes of mankind. It is not merely the proportion of commodities to each other but their proportion to the wants and tastes of mankind that determines prices.”

Using this as his basis, Malthus argued that goods and services on the market could outstrip demand if consumers choose not to spend their money. Malthus believed that while production could increase demand, it was powerless to create the will to consume among individuals.

Demand-side economics works on the theory that economic growth can be stimulated by increasing the demand for goods and services. The American economist, J.D. Foster, the Norman B. Ture Fellow in the Economics of Fiscal Policy at the Heritage Foundation, argued that demand-side works on the theory that the economy is underperforming because the total demand is low, and, as a consequence, the supply needed to meet this demand is likewise low.

The American economist, Paul Krugman (1953 – ), and other economists believe that recessions and depressions are the results of a decrease in demand and that the most effective method of revivifying the economy is to stimulate that demand. The way to do this is to engage in large-scale infrastructure projects such as the building of bridges, railways, and highways. These projects create a greater demand for things like steel, asphalt, and so forth. And, furthermore, it provides people with a wage which they can spend on things like food, housing, clothing, entertainment, so on and so forth.

Policies based on demand-side economics aims to change the aggregate demand in the economy. Aggregate demand is consumer spending + investment + net import/export. Demand-side economics policies are either expansive or contractive. Expansive demand-side policies aim at stimulating spending during a recession. By contrast, contractive demand-side policies aim at reducing expenditure during an inflationary economy.

Demand-side policy can be split into fiscal policy and monetary policy. The purpose of fiscal policy in this regard is to increase aggregate demand. Demand-side based fiscal policy can help close the deflationary gap but is often not sustainable over the long-term and can have the effect of increasing the national debt. When such policies aim at cutting spending and increasing taxes, they tend to be politically unpopular. But when such policies that involve lowering taxes and increasing spending, they tend to be politically popular and therefore easy to execute (of course they never bother to explain where they plan to get the money from).

In terms of monetary policy, expansive demand-side economic aims at increasing aggregate demand while contractive monetary policy in demand-side economics aims at decreasing it. Monetary expansive policies are less efficient because it is less predictable and efficient than contractive policies.

Needless to say, demand-side economics has plenty of critics. According to D.W. McKenzie of the Mises Institute, demand-side economics works on the idea that “there are times when total spending in the economy will not be enough to provide employment to all want to and should be working.” McKenzie argued that the “notion that economics as a whole, sometimes lacks sufficient drive derives from a faulty set of economic doctrines that focus on the demand side of the aggregate economy.” Likewise, Thomas Sowell argued in Supply-Side Politics that there is too much emphasis placed on demand-side economics to the detriment of supply-side economics. He wrote in an article for Forbes:

“If Keynesian economics stressed the supposed benefit of having government manipulate aggregate demand, supply-side economics stressed what the marketplace could accomplish, one it was freed from government control and taxes.”

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John Maynard Keynes

The man who greatly popularised demand-side economics was the British economist, John Maynard Keynes (1883 – 1946). Keynes, along with many other economists, analysed the arguments of the classical economists against the realities of the Great Depression. Their analysis led many economists to question the arguments of the classical economists. They noted that classical economics failed to answer how financial disasters like the Great Depression could happen.

Keynesian economics challenged the views of the classical economists. In his 1936 book, The General Theory of Employment, Interest and Money (one of the foundational texts on the subject of modern macroeconomics) Keynes revivified demand-side economics. According to Keynes, output is determined by the level of aggregate demand. Keynes argued that resources are not scarce in many cases, but that they are underutilised due to a lack of demand. Therefore, an increase in production requires an increase in demand. Keynes’ concluded that when this occurs it is the duty of the government to raise output and total employment by stimulating aggregate demand through fiscal and monetary policy.

The Great Depression is often seen as a failure of capitalism. It popularised Keynesian economics and monetary central planning which, together, “eroded and eventually destroyed the great policy barrier – that is, the old-time religion of balanced budgets – that had kept America relatively peaceful Republic until 1914.”

David Stockman of the Mises Institute argues that the Great Depression was the result of the delayed consequences of the Great War (1914 – 1918) and financial deformations created by modern central banking. However, the view that the Great Depression was a failure of capitalism is not one shared by every economist. The American economist, Milton Friedman (1912 – 2006), for example, argued that the Great Depression was a failure of monetary policy. Friedman pointed out that the total quantity of money in the United States – currency, bank deposits, and so forth – between 1929 and 1933 declined by one-third. He argued that the Federal Reserve had failed to prevent the decline of the quantity of money despite having the power and obligation to do so. According to Friedman, had the Federal Reserve acted to prevent the decline in the quantity of money, the United States (and subsequently, the world) would only have suffered a “garden variety recession” rather than a prolonged economic depression.

It is not possible to determine the exact dimensions of the Great Depression using quantitative data. What is known, however, is that it caused a great deal of misery and despair among the peoples of the world. Failed macroeconomic policies combined with negative shocks caused the economic output of several countries to fall between twenty-five and thirty-percent between 1929 and 1932/33. In America between 1929 and 1933, production in mines, factories, and utilities fell by more than fifty-percent, stock prices collapsed to 1/10th of what they had been prior to the Wall Street crash, real disposable income fell by twenty-eight percent, and unemployment rose from 1.6 to 12.8 million.

According to an article for the Foundation for Economic Education, What Caused the Great Depression, the Great Depression occurred in three phases. First, the rise of “easy money policies” caused an economic boom followed by a subsequent crash. Second, following the crash, President Herbert Hoover (1874 – 1964) attempted to suppress the self-adjusting aspect of the market by engaging in interventionist policies. This caused a prolonged recession and prevented recovery. Hourly rates dropped by fifty-percent, millions lost their jobs (a reality made worse by the absence of unemployment insurance), prices on agricultural products dropped to their lowest point since the Civil War (1861 – 1865), more than thirty-thousand businesses failed, and hundreds of banks failed. Third, in 1933, the lowest point of the Depression, the newly-elected President Franklin Delano Roosevelt (1882 – 1945) combatted the economic crisis by using “new deal” economic policies to expand interventionist measures into almost every facet of the American economy.

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Let’s talk about the New Deal a little bit more. The New Deal was the name for the Keynesian-based economic policies that President Roosevelt used to try and end the Great Depression. It included forty-seven Congress-approved programs that abandoned laissez-faire capitalism and enacted the kind of social and economic reforms that Europe had enjoyed for more than a generation. Ultimately, the New Deal aimed to create jobs, provide relief for farmers, boost manufacturing by building partnerships between the private and public sectors, and stabilise the US financial system.

The New Deal was largely inspired by the events of the Great War. During the War, the US Government had managed to increase economic activity by establishing planning boards to set wages and prices. President Roosevelt took this as proof positive that it was government guidance, not private business, that helped grow the economy. However, Roosevelt failed to realise that the increase in economic activity during the Great War came as the result of inflated war demands, not as the achievement of government planning. Roosevelt believed, falsely, that it was better to have government control the economy in times of crisis rather than relying on the market to correct itself.

The New Deal came in three waves. During his first hundred days in office, President Roosevelt approved the Emergency Banking Act, Government Economy Act, the Civilian Conservation Corps, the Federal Emergency Relief Act, Agricultural Adjustment Act, Emergency Farm Mortgage Act, the Tennessee Valley Authority Act, the Security Act, Abrogation of Gold Payment Clause, the Home Owners Refinancing Act, the Glass-Steagall Banking Act, the National Industrial Recovery Act, the Emergency Railroad Transportation Act, and the Civil Works Administration.

In 1934, President Roosevelt bolstered his initial efforts by pushing through the Gold Reserve Act, the National Housing Act, the Securities Exchange Act, and the Federal Communications Act.

In 1935, the Supreme Court rejected the National Industrial Act. President Roosevelt, concerned that other New Deal programs could also be in jeopardy, embarked on a litany of programs that would help the poor, the unemployed, and farmers. Second-wave New Deal programs included Soil Conservation and Domestic Allotment Act, Emergency Relief Appropriation, the Rural Electrification Act, the National Labor Relations Act, the Resettlement Act, and the Social Securities Act.

In 1937, Roosevelt unleashed the third wave of the New Deal by aiming to combat budget deficits. It included the United States Housing Act (Wagner-Steagall), the Bonneville Power Administration, the Farm Tenancy Act, the Farm Security Administration, the Federal National Mortgage, the New Agriculture Adjustment Act, and the Labor Standards Act.

According to the historical consensus, the New Deal proved effective in boosting the American economy. Economic growth increased by 1.8% in 1935, 12.9% in 1936, and 3.3% in 1937. It built schools, roads, hospitals, and more, prevented the collapse of the banking system, reemployed millions, and restored confidence among the American people.

Some even claim that the New Deal didn’t go far enough. Adam Cohen, the author of Nothing to Fear: FDR’s Inner Circle and the Hundred Days that Created Modern America, claims that the longevity of the Depression (the American economy didn’t return to pre-depression prosperity until the 1950s) is evidence that more New Deal spending was needed. Cohen commented that the New Deal had the effect of steadily increasing GDP (gross domestic product) and reducing unemployment. And, which is more, it reimagined the US Federal government as a welfare provider, a stock-market regulator, and a helper of people in financial difficulty.

However, the historical consensus is not to say that the New Deal is without its critics. The New Deal was criticised by many conservative businessmen for being too socialist. Others, such as Huey Long (1893 – 1935), criticised it for failing to do enough for the poor. Henry Morgenthau, Jr. (1891 – 1967), the Secretary of the Treasury, confessed before Democrats in the House Ways and Means Committee on May 9th, 1939 that the New Deal had failed as public policy. According to Morgenthau, it failed to produce an economic recovery and did not erase historic unemployment. Instead, it created a recession – the Roosevelt Recession – in 1937, failed to adequately combat unemployment because it created jobs that were only temporary, became the costliest government program in US history, and wasted money.

Conservatives offer supply-side economics as an alternative to demand-side economics. Supply-side economics aims at increasing aggregate supply. According to supply-side economics, the best way to stimulate economic growth or recovery is to lower taxes and thus increase the supply of goods and services. This increase leads, in turn, to lower prices and higher standards of living.

The lower-taxes policy has proved quite popular with politicians. The American businessman and industrialist, Andrew Mellon (1855 – 1937) argued for lower taxes in the 1920s, President John Fitzgerald Kennedy (1917 – 1963) argued for lower taxes in the 1960s, and both President Ronald Reagan (1911 – 2004) and President George Walker Bush (1946 – ) lowered taxes in the 1980s and 2000s, respectively.

Supply-side economics works on the principle that producers will create new and better products if they are allowed to keep their money. Put simply, supply-side economics (supply merely refers to the production of goods and services) works on the theory that cutting taxes on entrepreneurs, investors, and business-people incentives them to invest more in their endeavours. This money can be invested in capital – industrial machinery, factories, software, office buildings, and so forth.

The idea that lower taxes lead to greater economic prosperity is one of the central tenants of supply-side economics. Supporters of supply-side economics believe that providing financial benefits for investors (cutting capital gains tax, for example) stimulates economic growth. By contrast, high taxes, especially those metered out on businesses, discourage investment and encourages stagnation.

Tax rates and tax revenue are not the same thing, they can move in opposite directions depending on economic factors. The revenue collected from income tax for each year of the Reagan Presidency was higher than the revenues collected during any year of any previous Presidency. It can be argued that people change their economic behaviour according to the way they are taxed. The problem with increasing taxes on the rich is that the rich will use legal, and sometimes illegal, strategies for avoiding paying it. A businessman who is forced to pay forty-percent of his business’ profits on taxation is less likely to increase his productivity. As a consequence, high tax rates on businesses leads to economic stagnation.

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Supply-side supporters use Arthur Laffer’s (1940 – ) – an advisor to President Ronald Regan –  Laffer Curve to argue that lower taxes lead to higher tax revenue. The Laffer curve showed the dichotomy between tax revenue and the amount of tax that is collected. Laffer’s idea that the more taxation increased, the more tax revenue is collected. However, if taxes are increased beyond a certain point, less revenue is collected because people are no longer willing to make an economic contribution.

Taxation only works when the price of engaging in productive behaviour is likewise reduced. Daniel Mitchell of the Heritage Foundation stated in an article entitled a “Supply-Side” Success Story, that tax cuts are not created equally. Mitchell wrote: “Tax cuts based on the Keynesian notion of putting money in people’s pockets in the form of rebates and credits do not work. Supply-side cuts, by contrast, do improve economic performance because they reduce tax rates on work, saving, and investment.” Mitchell used the differences between the 2001 and 2003 tax cuts as evidence for his argument. Mitchell pointed out that tax collections fell after the 2001 tax cuts whereas they grew by six-percent annually after the 2003 cuts. Mitchell points out that job numbers declined after the 2001 cuts whereas net job creation averaged more than 150,000 after the 2003 cuts. Mitchell points out that economic growth averaged 1.9% after the 2001 tax cuts, compared to 4.4% after the 2003 cuts.

Proposals to cut taxes have always been characterised by its opponents as “tax cuts for the rich.” The left believes that tax cuts, especially cuts on the top rate of tax, does not spur economic growth for lower and middle-class people and only serves to widen income inequality. They argue that tax cuts benefit the wealthy because they invest their newfound money in enterprises that benefit themselves. Bernie Sanders (1941 – ), the Independent Senator from Vermont, has argued that “trickle-down economics” is pushed by lobbyists and corporations to expand the wealth of the rich. Whilst opponents of President Ronal Reagan’s tax cuts likewise referred to the policy as “trickle-down economics.”

In reality, the left-wing slander of tax cuts can best be described as “tax lies for the gullible.” The rich do not become wealthy by spending frivolously or by hiding their money under the mattress. The rich become rich because they are prepared to invest their money in new products and ventures that will generate greater wealth. In reality, it is far more prudent to give an investor, entrepreneur, or business owner a tax cut because they are more likely to use their newfound wealth more prudently.

According to Prateek Agarwal at Intelligent Economist, supply-side economics is useful for lowering the natural rate of unemployment. Thomas Sowell, a supporter of supply-side economics, claims that while tax cuts are applied primarily to the wealthy, it is the working and middle classes who are the first and primary beneficiaries. This occurs because the wealthy, in Sowell’s view, are more likely to invest more money in their businesses which will provide jobs for the working class.

The purpose of economic policy is to facilitate the economic independence of their citizens by encouraging economic prosperity. Demand-side economics and supply-side economics represent two different approaches to achieving this endeavour. Demand-side economics argues that economic prosperity can be achieved by having the government increase demand by taking control of the economy. By contrast, supply-side economics, which is falsely denounced as “trickle-down economics” by the likes of people like Juice Media, champions the idea that the best way to achieve economic prosperity is by withdrawing, as far as humanly possible, government interference from the private sector of the economy. Supply-side economics is the economic philosophy of freedom, demand-side economics is not.

WHITE HOUSE BACKS BILL TO BAN ABORTIONS AFTER TWENTY-WEEKS

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The Trump administration has officially backed legislation that will ban abortions after twenty weeks. A statement from the White House read:

“The bill, if enacted into law, would help to facilitate the culture of life to which our Nation aspires. Additionally, the bill would promote a science-based approach to unborn life, as recent advancements  have revealed that the physical structures necessary to experience pain are developed within 20 weeks of  fertilization”

The bill, which is labelled the ‘Pain-Capable Unborn Child Protection Act‘, is being sponsored by Republican Congressman from Arizona, Trent Franks. Under the bill, anyone who performs or attempts to perform an abortion on a fetus twenty-weeks or older will face criminal penalties, including a fine or a term of imprisonment of up to five years. Naturally, exceptions have been made which will allow women to utilise the medical procedure after the deadline if her life is in danger or if she is a victim of rape or incest.

As if on cue, the bill has faced a strong backlash from morally repugnant pro-choice groups, who have slammed it as ‘cruel’ and ‘unconstitutional’ (because America’s founding fathers totally believed in the right to murder unborn babies).  Heather Boonstra of The Hill condemned it as an attempt to “politicise women’s health, limit access to abortion care and stigmatise people who need later abortions” (the accusation of ‘politicising’ women in any way is a little rich coming from the left).  Similarly, Planned Parenthood tweeted: “20 week abortion bans are: unpopular, unconstitutional, part of the agenda to ban ALL abortion.”

WHITE HOUSE REVEALS NEW TAX REFORM PLAN

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President Trump unleashed a new plan for tax reform in a speech at the Indianapolis State Fairgrounds on Wednesday.

The plans are the product of discussions between White House Treasury Secretary, Steve Mnuchin, the House Ways and Means Chairman, Kevin Brady, the Senate Finance Chairman, Orrin Hatch, House Speaker, Paul Ryan,  Senate Majority Leader, Mitch McConnell, and White House economic policy chief, Gary Cohn. Their purpose will be to strengthen the middle class, grow the economy, and engender economic recovery by broadening the tax base, closing loopholes, and fostering growth.

According to a press release by the Treasury Department, the reforms will mean that less of the earnings of middle-class families will be subject to Federal income tax, and will reduce the number of tax brackets from seven to three: 12%, 25%, and 35%. It will also increase child tax credits and repeal the death tax and alternative minimum tax.

For business, the reforms seek to reduce the corporate tax rate to 20% and limit the taxation imposed on small and family-based businesses operating as sole proprietorships and small businesses corporations to 25%.

The reforms have received support from both politicians and numerous free-market groups. The Republican Congressman from Wisconsin, Paul Ryan, said on Capitol Hill:

“This has been a long time coming. Instead of a source of pride, our tax code has become a constant source of frustration. It’s too big. It’s too complicated. It’s too expensive. Today, we are taking  the next step to liberate America from our broken tax code.”

Similarly, the House Freedom Caucus, which is comprised of Congress’ most conservative members, said in a statement:

“President Trump has delivered a forward-looking tax reform framework that will let hard-working  Americans keep more of their money, simplify our system, end carve-outs for special interests,  and will help make our businesses competitive abroad. The Freedom Caucus looks forward to sending a final  bill based on this framework to President Trump’s desk as soon as possible.”

 

ANTHONY WEINER JAILED

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The former Democrat Congressman and front-runner for mayor of New York, Anthony Weiner, has been sentenced to twenty-one months in a Federal prison followed by three years of supervised release for child pornography offences.

Weiner pled guilty in May to charges of transferring obscene material to a minor, a crime which carries a maximum penalty of ten years.

During the sentencing, Weiner begged for leniency and wept on several occasions. He told the court:

“The crime I committed was my rock bottom. I have lost so much and appropriately so … I long ago  forfeited the right to ask for the benefit of the doubt from you or from anyone.”

Prosecutors had sought a two-year custodial sentence. However, Weiner’s attorneys argued that their client’s “remarkable process” over the past year and the fact he had never attempted to meet with the victim warranted a lighter sentence. Judge Denise Cotes dismissed the defence’s argument, stating Weiner’s crime was serious enough to warrant jail time.

ANTHONY WEINER TO BE SENTENCES ON SEPTEMBER 25TH

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Disgraced former Democrat Congressman from New York, Anthony Weiner, is facing up to ten years in prison when he is sentenced on September 25th for sending sexually explicit images of himself to a minor.

Court papers filed by prosecutors this week alleges that on two occasions, February 18th and 23rd 2016, Weiner used graphic and obscene language to convince a fifteen-year-old girl to expose herself and masturbate while he watched on Skype. The court papers also allege at Weiner, 53, was aware of the fact that girl was underage.

Prosecutors are asking that a two-year jail sentence be imposed on Weiner who pleaded guilty in May to sending sexually explicit images of himself to a minor.  Weiner pled guilty as a part of a plea bargain that would mean he would only have to serve a sentence of twenty-one to twenty-seven months.

TRUMP TO REPEAL DACA

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President Donald Trump has officially ended the Deferred Action for Childhood Arrivals, or DACA, policy.

President Trump had criticised DACA during his 2016 Presidential campaign. In an official statement, President Trump stated:

“As President, my highest duty is to defend the American people and the Constitution of the United  States of America. At the same time, I do not favour punishing children, most of whom are now adults,  for the actions of their parents. But we must also recognize that we are a nation of opportunity  because we are a nation of laws.”

Trump continued:

“The legislative branch, not the executive branch, writes these laws — this is the bedrock of our Constitutional system, which I took a solemn oath to preserve, protect, and defend. In June of 2012, President Obama bypassed Congress to give work permits, social security numbers, and federal benefits to approximately 800,000 illegal immigrants currently between the ages of 15  and 36. The typical recipients of this executive amnesty, known as DACA, are in their twenties.  Legislation offering these same benefits had been introduced in Congress on numerous occasions  and rejected each time.”

President Trump reportedly plans to give US Congress six months to pass legislation that would address the hundreds of thousands of DACA immigrants. According to the Daily Beast, there are approximately eight-hundred-thousand immigrants that benefit from the DACA policy. All of these people could feasibly be deported.

DACA, which was created by an executive action in 2012, was started by Former President Obama, to protect illegal immigrants who had arrived in the United States as children.  The policy has been in legal limbo for years with ten Republican-led states threatening to sue over the alleged unconstitutionality of the policy.

Under DACA, applicants are required to prove they have immigrated to the United States illegally, must pay a US$495.00 application fee, and renew their deferment every two years. Once the applicant has been accepted, they are eligible for social security cards, welfare benefits, and are eligible for work and study permits.

Former President Obama has released a statement accusing President Trump of casting a shadow on some of America’s “best and brightest young people.”  Former President Obama stated on Facebook:

“Some 800,000 young people stepped forward, met rigorous requirements, and went through background checks. And America grew stronger as a result. But today, that shadow has been cast over some of our best and brightest young people once again.”

Former President Obama continued:

 “To target these young people is wrong – because they have done nothing wrong. It is self-defeating – because they want to start new businesses, staff our labs, serve in our military, and otherwise contribute to the country we love. And it is cruel.”

Predictably, the left has vowed to increase “resistance” against President Trump. Similarly, Democrats have accused President Trump of racism. New York Attorney General, Eric Schneiderman, has claimed he will sue to protect DACA immigrants living in New York. Schneiderman stated:

“President Trump’s decision to end the DACA program would be cruel, gratuitous, and devastating to tens of thousands of New Yorkers—and I will sue to protect them. Dreamers are Americans in every  way.”

Left-wing documentary filmmaker, Michael Moore, stated on twitter:

“To the streets! Find out where the DACA protest is where u live and SHOW UP! If we are ever to be  a decent country, this is your moment.”

Karine Jean-Pierre of MoveOn.org has claimed that President Trump’s decision only serves to advance the “white supremacy agenda.” Similarly, Modern Family producer, Danny Zuker, showing true left-wing tolerance to different opinions, told Christians: “if you support [Donald Trump’s] decision to end DACA your Christianity is bulls***. But on the other hand f*** you.”

Some Republicans, including Republican Congressman from Wisconsin, Paul Ryan, have urged President Trump to hold off rescinding DACA so a legislative agenda can be achieved. Ryan stated:

“The president’s announcement does not revoke permits immediately, and it is important that those affected have clarity on how this interim period will be carried out. At the heart of this issue are  young people who came to this country through no fault of their own, and for many of them it’s the  only country they know.”

Republican Senator from Oklahoma, James Lankford, and Republican Senator from Arizona, John McCain, meanwhile have argued that children should not be punished for the actions of their parents.

In the end, rescinding DACA and other disastrous Obama-era immigration policies will be important steps in allowing the United States to reclaim control over its borders and immigration.