Soon before Milton Friedman’s dying in 2006, I had the privilege of interviewing him over dining in San Francisco. What are the three things we need to do to make America more profitable, I asked him in the last question.
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His reply I have never forgotten:” First, enable universal school option, second, develop free trade, next and most importantly, minimize government spending”. Before Joe Biden and Barack Obama, that was much ago.
There aren’t many issues in America that didn’t get attributed to the expansion of a large, ineffective state.
It is interesting that both of the government’s biggest inflation burst occurred during the current era. The first was the massive growth of the welfare state known as the “war on poverty” led by Lyndon B. Johnson in the 1970s, which saw prices almost double. Second was the post-COVID-19 spending blitz in the last year of Donald Trump’s first term, followed by the Biden$ 6 trillion spending spree, with the Consumer Price Index sprinting from 1.5 % to 9.1 %.
Fluke? Even. But I have a question.
It is clear that there is a connection between federal flesh and the dollar’s declining buying power. In both instances, Federal Reserve income printing was used to finance the Washington investing blitz. The plane money led to a rise in prices. ( I also find it amusing that 11 Nobel Prize-winning economics wrote in the New York Times in 2021 that the Biden multitrillion-dollar saving binge doesn’t produce prices. Did they have psychedelic drugs?
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Despite the COVID-19 crisis ending more than a year ago, the federal budget avalanche hasn’t stopped. We are three times into the 2025 fiscal season and on pace to devote an all-time-high$ 7 trillion and use$ 2 trillion. If we stay on this program, the federal funds had reach$ 10 trillion over the next generation.
This path to financial purgatory is impossible to follow. It risks blowing away the Trump administration.
Trump should demand a package of up to$ 500 billion in rescissions right away when he assumes office, which the previous Congress authorized but hasn’t yet used. By cutting back on the subsidies for clean energy, nearly$ 100 billion could be saved. Why are we nonetheless spending money on COVID-19?
By ending business welfare programs like the buckets stuffed with tax dollars that are thrown at businesses like Intel in the CHIPS Act, we may save tens of billions of dollars. Elon Musk’s Department of Government Efficiency is now tracking down the last of the tree’s branches.
This elimination of bloated federal investing is necessary for the recovery of the economy and for reversing the revenue losses suffered by the middle class under Biden, in addition to the extension of the Trump income slice of 2017.
Because inflation is still a curse, this is especially essential. Since the Fed started cutting interest rates in October, both commodity prices and mortgage rates have increased by nearly 5 %, in part because of the state expansion’s ability to create a dangerous environment.
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Nothing could dampen the enthusiasm and enthusiasm of the new Trump administration more than a resume of prices at the gas station and the food store. If the cost of all starts to go up once more, Trump’s record-high approval rating will go down immediately.
Cutting saving won’t be easy. The weight won’t just appear from Bernie Sanders Democrats. He will need to persuade legislators in his own party, many of whom are now supporting Green New Deal meat projects in their regions.
Trump may borrow a line from Nancy Reagan: Only say low– to fugitive government spending. Say yes to what Friedman titled his famous guide:” Socialism and Freedom”.
