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The Rushmore Report – New Trump Economic Adviser Makes Shocking Prediction About U.S. Economy

President Donald Trump’s new economic adviser has made a stunning prediction about the U.S. economy. The Washington Examiner reports that Larry Kudlow recently met with White House staff, to whom he made the unexpected prognosis. Trump was present, and surprised at the pronouncement. So what did Kudlow say?

Kudlow reportedly predicted the nation’s economy is on the cusp of hitting up to 5% economic growth. He said, “The nation’s economy is on the verge of 4% to 5% growth, or more than double the last decade.” He told the president’s inner circle that many American companies were holding back until the tax reform bill was passed and signed into law.

The former CNBC host told Trump, “We’re on the front end of the biggest investment boom in probably 30 to 40 years.”

Trump responded by saying, “Well, I couldn’t have said it any better.”

Kudlow accepted a job offer from the president last week to replace Democratic economic adviser Gary Cohn as the White House National Economic Council director.

Fox News reported, “Kudlow’s extensive career in finance includes stints working for the Federal Reserve Bank of New York and serving as a chief economist and senior managing director at Bear Stearns, the defunct investment bank that failed during the 2008 financial crisis.

Kudlow served as the associate director for economics and planning in the Office of Management and Budget (OMB) during former President Ronald Reagan’s first term.

About the Author

Ryan Saavedra writes for The Daily Wire.

 

 

The Rushmore Report – Let’s Limit Spending Already

Some people have called for a balanced budget amendment to the Constitution as a means of reining in a big-spending Congress. That’s a misguided vision, for the simple reason that in any real economic sense, as opposed to an accounting sense, the federal budget is always balanced. The value of what we produced in 2017 – our gross domestic product – totaled about $19 trillion. If the Congress spent $4 trillion of the $19 trillion that we produced, unless you believe in Santa Clause, you know that Congress must force us to spend $4 trillion less privately.

Taxing is one way that Congress can do that. But federal revenue estimates for 2017 are about $3.5 trillion, leaving an accounting deficit of about $500 billion. So taxes are not enough to cover Congress’ spending. Another way Congress can get us to spend less privately is to enter the bond market. It can borrow. Borrowing forces up interest rates and crowds our private investment. Finally, the most dishonest way to get us to spend less is to inflate our currency. Higher prices for goods and services reduce our real spending.

The bottom line is the federal budget is always balanced in any real economic sense. For those enamored with a balanced budget amendment, think about the following. Would we have greater personal liberty under a balanced federal budget with Congress spending $4 trillion and taxing us $4 trillion, or would we be freer under an unbalanced federal budget with Congress spending $2 trillion and taxing us $1 trillion? I’d prefer the unbalanced budget. The true measure of government’s impact on our lives is government spending, not government taxing.

Tax revenue is not our problem. The federal government has collected nearly 20 percent of the nation’s gross domestic product almost every year since 1960. Federal spending has exceeded 20 percent of the GDP for most of that period. Because federal spending is the problem, that’s where our focus should be. Cutting spending is politically challenging. Every spending constituency sees what it gets from government as vital, whether it be Social Security, Medicare and Medicaid recipients or farmers, poor people, educators or the military. It’s easy for members of Congress to say yes to these spending constituencies, because whether it’s Democrats or Republicans in control, they don’t face a hard and fast bottom line.

The nation needs a constitutional amendment that limits congressional spending to a fixed fraction, say 20 percent, of the GDP. It might stipulate that the limit could be exceeded only if the president declared a state of emergency and two-thirds of both houses of Congress voted to approve the spending. By the way, the Founding Fathers would be horrified by today’s congressional spending. From 1788 to the 1920s, except in wartime, federal government spending never exceeded 4 percent of our GDP.

During the early ’80s, I was a member of the National Tax Limitation Committee. Our distinguished blue-ribbon drafting committee included its founder, Lew Uhler, plus notables such as Milton Friedman, James Buchanan, Paul McCracken, Bill Niskanen, Craig Stubblebine, Robert Bork, Aaron Wildavsky, Robert Nisbet, and Robert Carleson. The U.S. Senate passed our proposed balanced budget/spending limitation amendment to the U.S. Constitution on August 4, 1982, by a bipartisan vote of 69-31, surpassing the two-thirds requirement by two votes. In the House of Representatives, the amendment was approved by a bipartisan majority (236-187), but it did not meet the two-thirds vote required by Article 5 of the Constitution. The amendment can be found in Milton and Rose Friedman’s “Tyranny of the Status Quo” or the appendix of their “Free to Choose.”

During an interview about the proposed amendment, a reporter asked why I disagreed with the committee and called for a limit of 10 percent of GDP on federal spending. I told him that if 10 percent is good enough for the Baptist Church, it ought to be good enough for the U.S. Congress.

About the Author

Walter Williams is an American economist, commentator, and academic. He is the John M. Olin distinguished Professor of Economics at George Mason University, as well as a syndicated columnist and author, known for his libertarian views. He is published by hundreds of newspapers throughout the United States.

The Rushmore Report – Mass Exodus from Blue States to Red States

While Democrats continue to claim that their policies are superior to those of Republicans, they have one overwhelming piece of evidence working against them. By unprecedented numbers, Americans are moving from Democrat-controlled states to those run by Republicans and conservative ideals.

The delineation is clear. Democrats offer higher taxes, more regulations, and resulting higher costs of living. What do Americans think about this? It’s obvious. Don’t measure their opinions by unreliable surveys – but by moving vans.

According to United Van Lines, the top ten states people are leaving include the following states, whose state legislatures are dominated by Democrats: Wisconsin, Ohio, Massachusetts, Connecticut, New York, New Jersey, and Illinois. The only red states to make the list are Kentucky, Utah, and Kansas.

And the top ten states people are moving to include the red states of Idaho, South Dakota, South Carolina, North Carolina, Alabama, Nevada, and Colorado. The only solidly blue states that are receiving significant migration are Vermont, Oregon, and Washington.

Last week, CBS in San Francisco reported that the number of people leaving the ultra-liberal Bay Area has reached its highest level in more than a decade. Topping the list of reasons: high taxes, stifling regulations, and high cost of living.

Further, the cities people are leaving more than any other are all in blue states: San Francisco, New York, Los Angeles, Washington, D.C., Chicago, Detroit, Dayton, and Milwaukee. And the cities people are moving to are mostly in red states: Phoenix, Atlanta, Dallas, Nashville, Tampa, and Miami.

The American Legislative Exchange Council ranks states according to their economic performance. Eight of the top ten states are conservative, while only two are liberal.

Perhaps the most telling data that compares red states to blue states pits the nation’s two largest states against each other: reliably blue California and reliably red Texas. The Chief Executive Magazine’s annual Best and Worst States for Business surveys hundreds of CEOs each year. And for 12 years in a row, they found California to rank dead last in terms of states that are friendly to business. Texas, on the other hand, ranked first each of the past 12 years.

So which is the better place to live – red states or blue states? Based on any fair criteria, the answer is ruby-red clear.

The Rushmore Report – Let’s Limit Spending Already Copy

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About the Author

Walter Williams is an American economist, commentator, and academic. He is the John M. Olin distinguished Professor of Economics at George Mason University, as well as a syndicated columnist and author, known for his libertarian views. He is published by hundreds of newspapers throughout the United States.

The Rushmore Report: Are Liberal Policies Good for America?

When Seattle passed a $15 an hour minimum wage law, liberals cheered. That was three years ago. What did it accomplish for the poor – who the law was intended to help? A new report from the University of Washington finds that the law is actually hurting the very people it was intended to help. Since the passage of the law, the study finds, the average worker has clocked nine percent fewer hours and earned $125 less per month.

“If you’re a low-skilled worker with one of those jobs, $125 a month is a sizable amount of money,” Mark Long, a UW public-policy professor and an author of the report told the Seattle Times. “It can be the difference between being able to pay your rent and not being able to pay your rent.”

It’s all about simple math. Every company has a personnel budget. They have a limited amount of money to pay in salaries. When the government dictates they must pay employees more money, one of two things will happen, and either is bad for the poor. First, they will lay off some workers in order to have the money to pay the other workers. Second, if they don’t do that, they will simply raise their prices for consumers, which will again affect the poor. Additionally, forced wage hikes lead to inflation, meaning the poor will eventually have to pay more for a loaf of bread.

Count McDonald’s among the growing list of companies that is fazing out workers in order to save money. Automation is replacing workers.

Still not convinced? Setting the actual proof aside – the failed Seattle experiment – ask yourself this simple question. If $15 per hour is better than $10 per hour, and if – as liberals claim – the hike has no negative effects, why not raise minimum wage to $20 per hour? Why not $50 per hour? If $15 per hour has no negative effects verses $10 per hour, why stop there? That’s mean-spirited. Why not pay everyone much, much more?

One doesn’t have to be an economist to understand the simple math. When government steps in and mandates higher wages, small business owners either shut down, pay fewer employees (meaning lay-offs), or charge more for their services. Either way, the working class is harmed the most.

When government dictates that a company must pay its employees more money, said company doesn’t suddenly have more money to pay its employees. So, for example, instead of paying out $1 million in annual pay spread across 50 workers ($20,000 each), they will now pay 33 workers ($30,000 each), leading to lay-offs. Or worse yet, the company will eliminate all such employees, using modern automation instead.

So the working poor are hurt the most.

Other liberal policies are just as harmful to the working poor. Here are a few examples.

1. Climate change

New regulations rolled out by the Obama Administration, in a response to climate change (they used to call it global warming) have resulted in higher energy prices. Green energy still costs more than fossil fuels. And the poor spend a much higher percentage of their income on energy than the rich.

2. Environmentalism

Imposed regulations result in higher costs for factories. Environmental amenities are expensive. This affects all of us, but especially the working poor, who can least afford it.

3. National security

Open borders result in more crime. Sanctuary cities result in more felons going free and killing innocent lives. Pulling out of Iraq results in ISIS. More money spent on the welfare state results in less money for national security.

None of this is to impugn the motives of liberalism. But there are these pesky things we call facts. Fact: Obamacare gave us a 200% increases in premiums instead of the 25% promised cut. Fact: The war on poverty has left us with a higher poverty rate than ever – $20 billion later.

Let’s return to the most recent experiment in liberal economics. I’m sure the government of Seattle meant well when they raised the minimum wage to $15 per hour. But good intentions did little to help the thousands who were laid off. And good intentions did little to help the small business owners who could no longer afford to stay open.

Liberalism is a legitimate view. It is held by roughly a third of Americans. But I posit that there is a competing view that has proven superior when applied.

It’s called capitalism.

By all accounts, California is governed by pure liberalism, while Texas is governed by conservative capitalists. And guess which state is losing thousands of business owners and workers to the other state – every day?

And if you have a friend in Seattle who is benefiting from the highest minimum wage in America, you may want to send him a check – because he is making $125 a month less today than before he got his “raise.”