‘Climate Change Is Real, But It’s Not the End of the World’: Michael Shellenberger

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If there’s one consistent message coming from activists and politicians pushing the Green New Deal and massive new subsidies for renewable energy it’s that if we don’t take radical action now, life on Earth as we know it will soon be irreversibly destroyed. Greta Thunberg, Rep. Alexandria Ocasio-Cortez (D–N.Y.), and Democratic presidential nominee Joe Biden all have claimed that we have less than a dozen years left in which to save the planet.

The findings of the scientists studying global warming don’t support such alarmist claims, according to the new book Apocalypse Never: Why Environmental Alarmism Hurts Us All. Author Michael Shellenberger argues that deforestation and deaths from extreme weather are actually declining, and concerns about environmental damage from plastics are fundamentally misplaced.

Shellenberger, who began his career as an advocate for more government spending on wind and solar, was eventually disillusioned after witnessing the failure of subsidies to fix the inherent drawbacks of renewables. Named a “Hero of the Environment” by Time magazine in 2008, he is an “expert reviewer” for the Intergovernmental Panel on Climate Change, whose 2018 report has been widely misinterpreted as saying we had just 12 years to stave off catastrophic climate change. Shellenberger also appeared in the 2013 documentary Pandora’s Promise, which was shown at Sundance, and featured several prominent environmentalists who have come around to the virtues of nuclear power. 

Nick Gillespie interviewed Shellenberger over Zoom about Apocalypse Never and why he believes that environmentalism has become a replacement for religion in an increasingly secular world.

Edited by John Osterhoudt

Photo credit: Climate Emergency Sign, John Englart / CC Flickr; Biden with Bear, Michael Forster Rothbart/ZUMA Press/Newscom; Shellenberger on stage, James Arthur Photography/James Arthur/Newscom

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BREAKING: Supreme Court Decides Trump Financial Records Cases and Fate of Eastern Oklahoma

The Supreme Court issued its final decisions of the term today, resolving the long-running dispute over Donald Trump’s financial records and the status of eastern Oklahoma. The Court resoundingly rejected claims of Presidential immunity, but also roundly rejected the House of Representatives’ claims of unlimited investigatory authority. The Court also ruled in favor of Native American claims against Oklahoma, in a 5-4 decision that produced the first and only dissent by Chief Justice Roberts so far this term (and only his second dissenting vote).

The first opinion of the day was McGirt v. Oklahoma, one of the most fascinating (and under-explored) cases of the term. Justice Gorsuch wrote for a five-justice majority that, for purposes of the Major Crimes Act, much of eastern Oklahoma is still “Indiana country,” and therefore the state lacks the jurisdiction to criminally prosecute members of Native American tribes for offenses covered by the Major Crimes Act.

Joined by the Court’s liberals, here is how Justice Gorsuch’s opinion begins:

On the far end of the Trail of Tears was a promise. Forced to leave their ancestral lands in Georgia and Alabama, the Creek Nation received assurances that their new lands in
the West would be secure forever. In exchange for ceding “all their land, East of the Mississippi river,” the U. S. government agreed by treaty that “[t]he Creek country west of the Mississippi shall be solemnly guarantied to the Creek Indians.” Treaty With the Creeks, Arts. I, XIV, Mar. 24, 1832, 7 Stat. 366, 368 (1832 Treaty). Both parties settled on boundary lines for a new and “permanent home to the whole Creek nation,” located in what is now Oklahoma. Treaty With the Creeks, preamble, Feb. 14, 1833, 7 Stat. 418 (1833 Treaty). The government further promised that “[no] State or Territory [shall] ever have a right to pass laws for the government of such Indians, but they shall be allowed to govern themselves.” 1832 Treaty, Art. XIV, 7 Stat. 368.

Today we are asked whether the land these treaties promised remains an Indian reservation for purposes of federal criminal law. Because Congress has not said otherwise, we hold the government to its word.

Chief Justice Roberts wrote a dissent (his only authored dissent of the term), joined by the other conservatives, save for footnote 9 (which Justice Thomas did not join). Justice Thomas also wrote a separate dissent.

The Court also issued a one line per curiam opinion in Sharp v. Murphy, a case raising the same issue that had been held over from last term, presumably because the Court split 4-4. Justice Gorsuch was recused from that case. Sharp was decided 6-2 in accord with McGirt. Justice Thomas and Alito noted their dissent.

Chief Justice Roberts had the majority opinions in both Trump financial records cases, both of which were decided 7-2. First up was Trump v. Vance, in which the Court rejected Trump’s claims of immunity from state grand jury proceedings. The Court was unanimous in rejecting Trump’s claims of absolute immunity, but split 5-2-2 on the proper standard to apply.

Chief Justice Roberts, writing for himself and the Court’s four liberals, concluded that neither Article II of the Constitution nor the Supremacy Clause bar a state criminal subpoena for the personal records of a sitting president, nor do they require a heightened standard. Nonetheless, Roberts also concluded that a sitting President can still make specific objections to specific elements of a subpoena, and the lower courts will have to consider such objections on remand.

His opinion for the Court begins:

In our judicial system, “the public has a right to every man’s evidence.”1 Since the earliest days of the Republic, “every man” has included the President of the United States. Beginning with Jefferson and carrying on through Clinton, Presidents have uniformly testified or produced documents in criminal proceedings when called upon by federal courts. This case involves—so far as we and the parties can tell—the first state criminal subpoena directed to a President. The President contends that the subpoena is unenforceable. We granted certiorari to decide whether Article II and the Supremacy Clause categorically preclude, or require a heightened standard for, the issuance of a state criminal subpoena to a sitting President.

His opinion for the Court concludes:

Two hundred years ago, a great jurist of our Court established that no citizen, not even the President, is categorically above the common duty to produce evidence when called upon in a criminal proceeding. We reaffirm that principle today and hold that the President is neither absolutely immune from state criminal subpoenas seeking his private papers nor entitled to a heightened standard of need. The “guard[] furnished to this high officer” lies where it always has—in “the conduct of a court” applying established legal and constitutional principles to individual subpoenas in a manner that preserves both the independence of the Executive and the integrity of the criminal justice system. . . .

The arguments presented here and in the Court of Appeals were limited to absolute immunity and heightened need. The Court of Appeals, however, has directed that the case be returned to the District Court, where the President may raise further arguments as appropriate.

We affirm the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.

Jsutice Kavanaugh, joined by Justice Gorsuch, concurred in the judgment, arguing that the standard for a state criminal subpoena should be the “demonstrated, specific need” test adopted by the Court in United States v. Nixon.

Justices Alito and Thomas each wrote a separate dissent. While neither embraced the argument that the President is immune from the issuance of any subpoena, they both believed the lower court decision should be vacated as the President may be entitled to relief against enforcement of the subpoena while he remains in office.

The Chief Justice also had the opinion for the Court in Trump v. Mazars, and this decision was also 7-2. In this decision the Court rejected the claims of both sides, reaffirming Congressional authority to conduct oversight, but roundly rejecting the claims put forward by the House of Representatives, and vacating the lower court decisions from  the U.S. Courts of Appeals for the Second and D.C. Circuits. Of note, not a single justice voted to uphold the lower court decisions or to embrace the House of Representatives’ legal theory.

Chief Justice Roberts opinion for hte Court was joined by the Court’s four liberals and Justices Gorsuch and Kavanaugh. Justices Alito and Thomas each dissented.

(developing . . . still being updated)

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Farewell…For Now

Remember: Matter. How tiny your share of it.
Time. How brief and fleeting your allotment of it.
Fate. How small a role you play in it.

– Marcus Aurelius, Meditations

For the past ten years, I’ve spent most of my waking hours learning how the systems we live under function and how wealth and power operate and consolidate in the U.S. as well as globally. I’ve learned a lot and I’ve shared a lot. If I could go back and do it all over again, I would.

I dedicated all that time and energy to writing and engaging on the big issues of our era for two main reasons. First, I felt there was a window of opportunity to turn the ship around and reform the system to avoid needless additional widespread suffering and upheaval, which to me was guaranteed given the destructive path to which our ruling class was obstinately committed. Second, my decade on Wall Street offered some valuable insight into the inner workings of financial feudalism and how it systematically and intentionally enriches certain small segments of the populace while enslaving the masses via perpetual colossal debt issuance coupled with reoccurring central bank bailouts for the creditor and financial asset speculator class. This wasn’t widely appreciated when I first started writing about it, so it became a personal mission to inform as many people as possible.

continue reading

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BREAKING: Supreme Court Decides Trump Financial Records Cases and Fate of Eastern Oklahoma

The Supreme Court issued its final decisions of the term today, resolving the long-running dispute over Donald Trump’s financial records and the status of eastern Oklahoma. The Court resoundingly rejected claims of Presidential immunity, but also roundly rejected the House of Representatives’ claims of unlimited investigatory authority. The Court also ruled in favor of Native American claims against Oklahoma, in a 5-4 decision that produced the first and only dissent by Chief Justice Roberts so far this term (and only his second dissenting vote).

 

(developing . . . still being updated)

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The Obamacare Birth Control Coverage Fight That Never Ends

bsiprfphotos030925

Tuesday’s ruling on birth control from the U.S. Supreme Court was a win for freedom of religion and economic liberty. Here’s more background on Trump v. Pennsylvania, which was the latest round of legal fighting over the Affordable Care Act’s (ACA) contraception mandate. That mandate required employers to offer their workers health insurance plans that provided birth control options with no point-of-sale cost to enrolled employees.

Tuesday’s 7-2 ruling in the Trump administration’s favor says that the ACA gives the federal Health Resources and Services Administration (HRSA) “broad discretion to define preventive care and screenings and to create the religious and moral exemptions.” Pennsylvania argued that the ACA does not allow some employers to not cover birth control for religious or moral reasons.

The mandate was a top-down way to ensure U.S. women have “access” to birth control, though it did nothing for women who are unemployed, undocumented, stay-at-home caregivers, self-employed, working at small businesses, working as independent contractors, working less than full-time, etc., etc. In the last decade, the ACA mandate has become the be-all-end-all birth control issue for Democrats. Meanwhile, over-the-counter access to birth control has fallen out of fashion or even become a point of contention for many progressive groups, women’s advocates, and left-leaning politicians.

Rather than working to expand birth control access through some other mechanism than Obamacare, these groups have focused myopically on the religious/moral exemption to contraception coverage with a public relations campaign on how Republicans want to take away birth control for everyone.

For instance, here’s what the Democratic National Committee had to say: “This decision is an egregious attack on the rights of women and those seeking reproductive care, especially in communities of color…. Make no mistake: reproductive health care is on the ballot in 2020. And the American people are ready to elect a president they can trust to protect it.”

Brigitte Amiri of the American Civil Liberties Union called it “a shameful decision” that “grant(s) a license to discriminate” and “will exacerbate existing inequalities, falling hardest on people with the fewest resources and people of color.”

And here’s how The New York Times editorial board described it yesterday:

Only days after surprising the nation by striking down a strict anti-abortion law in Louisiana, the Supreme Court under Chief Justice John Roberts reminded Americans once again that it is no friend to reproductive rights, or to the vast majority of women who will use some form of birth control in their lifetime.

The abortion case the Times refers to is June Medical Services LLC v. Russo, in which the Court struck down a Louisiana law requiring abortion doctors to have admitting privileges at a nearby hospital. The medically unnecessary restriction was viewed by a majority of the court as an unconstitutional requirement designed to deny women access to abortion. June was a good decision for supporters of legal abortion access, and one perfectly in line with previous Supreme Court rulings on similar laws.

But it’s simply silly to pretend like that case has anything to do with the ACA birth control rule. They turn on totally different issues, none of which is as simplistic as whether Supreme Court justices are friendly to reproductive rights. And it’s downright absurd to cite the ruling in Trump v. Pennsylvania as evidence the Court opposes birth control or is hostile to the majority of American women who will use contraception in their lifetimes.

The fact that a small class of employers may now may now opt out of the Obamacare contraception mandate has no bearing on whether most U.S. women will have access to affordable birth control. The vast majority of U.S. women with employer health insurance still will; and the huge numbers of U.S. women without sponsored health insurance plans will still have to find another way. Luckily, there are still lots of ways to obtain inexpensive birth control pills even without health insurance.

Besides, if access to birth control is the real concern—and it’s an important one, in my opinion—there are much better ways to go about it.

Yet these supposedly pro-reproductive rights groups have spent the better part of a decade trying to force certain beliefs and actions on the small minority of people and companies opposed to birth control (to the possible benefit of a very small fraction of U.S. women employed by these entities) and to preserve the sanctity of a complicated employer-based insurance scheme while all but ignoring real barriers to birth control access, like the fact that it requires medical visits and physician permission slips, or is tied to health insurance in the first place.

Friends of reproductive freedom should forget about forcing every single employer in the country to pay for worker’s contraception and work more on things that could make a difference to all girls and women, regardless of their employment status or legal and social circumstances. That means removing requirements for a physician’s prescription and yearly visits, allowing the over-the-counter sale of safe and much-tested oral contraceptives, expanding options for who can consult on birth control (i.e., letting pharmacists and nurses do it, not just physicians), removing limits on how many packs of pills people can get at a time, and pushing for community-based solutions to making sure the most vulnerable have access.

Instead, Democrats in Congress are doubling down on the health insurance approach.

“In an immediate response to the Supreme Court’s decision to uphold the Trump administration’s controversial rule that allows employers to refuse to cover their employees’ birth control under their company health insurance plan, a group of federal lawmakers announced today they will be filing new legislation tomorrow to repeal the rules before they can take effect,” states a press release from Democratic lawmakers who are introducing what they’re calling the “Protect Access to Birth Control Act.”

The bill, sponsored by Reps. Diana DeGette (D–Colo.), Judy Chu (D–Calif.), Barbara Lee (D–Calif.), and Lois Frankel (D–Florida), “would repeal three rules the Trump administration put in place in October 2017 to allow employers to opt not to provide their employees with access to free birth control as part of their employer-sponsored health care plan” if they have religious or other ethical objections.

In an amazingly Orwellian statement, they’re defining this as a blow against having employers involved in people’s birth control decisions.

“A decision about whether to use birth control is one that should be between a patient and their doctor—and no one else,” said a statement from DeGette, Chu, Lee, and Frankel. “Giving an employer the ability to interject themselves in that decisions—by limiting a patient’s access to free birth control—is unconscionable.”


FREE MINDS

Tech ties to law enforcement revealed. From NBC News:

On Wednesday, newly published research from the technology accountability nonprofit Tech Inquiry revealed that the Department of Defense and federal law enforcement agencies including Immigration and Customs Enforcement, the FBI, the Drug Enforcement Agency and the Federal Bureau of Prisons, have secured thousands of deals with Google, Amazon, Microsoft, Dell, IBM, Hewlett Packard and even Facebook that have not been previously reported.


FREE MARKETS

Biden proposes his own version of ‘America First.’ Biden “is proposing sweeping new uses of the federal government’s regulatory and spending power to bolster U.S. manufacturing and technology firms,” reports CNBC.

Biden calls for a $400 billion, four-year increase in government purchasing of U.S.-based goods and services plus $300 billion in new research and development in U.S. technology concerns. Among other policies expected to be announced Thursday, he proposes tightening current “Buy American” laws that are intended to benefit U.S. firms but can be easily circumvented by government agencies.


QUICK HITS

Ugh: “The United States reported more than 60,000 new COVID-19 cases on Wednesday, the biggest increase ever reported by a country in a single day, according to a Reuters tally.

• Protesters are suing Columbus, Ohio, police.

• Read Jesse Singal and Matt Welch on the Harper’s free speech letter.

• “A unanimous U.S. Supreme Court held that the ‘ministerial exception’ to federal anti-discrimination law shielded a parochial school from a federal disability lawsuit filed by a discharged teacher,” Damon Root explains.

from Latest – Reason.com https://ift.tt/3feEh2B
via IFTTT

The Obamacare Birth Control Coverage Fight That Never Ends

bsiprfphotos030925

Tuesday’s ruling on birth control from the U.S. Supreme Court was a win for freedom of religion and economic liberty. Here’s more background on Trump v. Pennsylvania, which was the latest round of legal fighting over the Affordable Care Act’s (ACA) contraception mandate. That mandate required employers to offer their workers health insurance plans that provided birth control options with no point-of-sale cost to enrolled employees.

Tuesday’s 7-2 ruling in the Trump administration’s favor says that the ACA gives the federal Health Resources and Services Administration (HRSA) “broad discretion to define preventive care and screenings and to create the religious and moral exemptions.” Pennsylvania argued that the ACA does not allow some employers to not cover birth control for religious or moral reasons.

The mandate was a top-down way to ensure U.S. women have “access” to birth control, though it did nothing for women who are unemployed, undocumented, stay-at-home caregivers, self-employed, working at small businesses, working as independent contractors, working less than full-time, etc., etc. In the last decade, the ACA mandate has become the be-all-end-all birth control issue for Democrats. Meanwhile, over-the-counter access to birth control has fallen out of fashion or even become a point of contention for many progressive groups, women’s advocates, and left-leaning politicians.

Rather than working to expand birth control access through some other mechanism than Obamacare, these groups have focused myopically on the religious/moral exemption to contraception coverage with a public relations campaign on how Republicans want to take away birth control for everyone.

For instance, here’s what the Democratic National Committee had to say: “This decision is an egregious attack on the rights of women and those seeking reproductive care, especially in communities of color…. Make no mistake: reproductive health care is on the ballot in 2020. And the American people are ready to elect a president they can trust to protect it.”

Brigitte Amiri of the American Civil Liberties Union called it “a shameful decision” that “grant(s) a license to discriminate” and “will exacerbate existing inequalities, falling hardest on people with the fewest resources and people of color.”

And here’s how The New York Times editorial board described it yesterday:

Only days after surprising the nation by striking down a strict anti-abortion law in Louisiana, the Supreme Court under Chief Justice John Roberts reminded Americans once again that it is no friend to reproductive rights, or to the vast majority of women who will use some form of birth control in their lifetime.

The abortion case the Times refers to is June Medical Services LLC v. Russo, in which the Court struck down a Louisiana law requiring abortion doctors to have admitting privileges at a nearby hospital. The medically unnecessary restriction was viewed by a majority of the court as an unconstitutional requirement designed to deny women access to abortion. June was a good decision for supporters of legal abortion access, and one perfectly in line with previous Supreme Court rulings on similar laws.

But it’s simply silly to pretend like that case has anything to do with the ACA birth control rule. They turn on totally different issues, none of which is as simplistic as whether Supreme Court justices are friendly to reproductive rights. And it’s downright absurd to cite the ruling in Trump v. Pennsylvania as evidence the Court opposes birth control or is hostile to the majority of American women who will use contraception in their lifetimes.

The fact that a small class of employers may now may now opt out of the Obamacare contraception mandate has no bearing on whether most U.S. women will have access to affordable birth control. The vast majority of U.S. women with employer health insurance still will; and the huge numbers of U.S. women without sponsored health insurance plans will still have to find another way. Luckily, there are still lots of ways to obtain inexpensive birth control pills even without health insurance.

Besides, if access to birth control is the real concern—and it’s an important one, in my opinion—there are much better ways to go about it.

Yet these supposedly pro-reproductive rights groups have spent the better part of a decade trying to force certain beliefs and actions on the small minority of people and companies opposed to birth control (to the possible benefit of a very small fraction of U.S. women employed by these entities) and to preserve the sanctity of a complicated employer-based insurance scheme while all but ignoring real barriers to birth control access, like the fact that it requires medical visits and physician permission slips, or is tied to health insurance in the first place.

Friends of reproductive freedom should forget about forcing every single employer in the country to pay for worker’s contraception and work more on things that could make a difference to all girls and women, regardless of their employment status or legal and social circumstances. That means removing requirements for a physician’s prescription and yearly visits, allowing the over-the-counter sale of safe and much-tested oral contraceptives, expanding options for who can consult on birth control (i.e., letting pharmacists and nurses do it, not just physicians), removing limits on how many packs of pills people can get at a time, and pushing for community-based solutions to making sure the most vulnerable have access.

Instead, Democrats in Congress are doubling down on the health insurance approach.

“In an immediate response to the Supreme Court’s decision to uphold the Trump administration’s controversial rule that allows employers to refuse to cover their employees’ birth control under their company health insurance plan, a group of federal lawmakers announced today they will be filing new legislation tomorrow to repeal the rules before they can take effect,” states a press release from Democratic lawmakers who are introducing what they’re calling the “Protect Access to Birth Control Act.”

The bill, sponsored by Reps. Diana DeGette (D–Colo.), Judy Chu (D–Calif.), Barbara Lee (D–Calif.), and Lois Frankel (D–Florida), “would repeal three rules the Trump administration put in place in October 2017 to allow employers to opt not to provide their employees with access to free birth control as part of their employer-sponsored health care plan” if they have religious or other ethical objections.

In an amazingly Orwellian statement, they’re defining this as a blow against having employers involved in people’s birth control decisions.

“A decision about whether to use birth control is one that should be between a patient and their doctor—and no one else,” said a statement from DeGette, Chu, Lee, and Frankel. “Giving an employer the ability to interject themselves in that decisions—by limiting a patient’s access to free birth control—is unconscionable.”


FREE MINDS

Tech ties to law enforcement revealed. From NBC News:

On Wednesday, newly published research from the technology accountability nonprofit Tech Inquiry revealed that the Department of Defense and federal law enforcement agencies including Immigration and Customs Enforcement, the FBI, the Drug Enforcement Agency and the Federal Bureau of Prisons, have secured thousands of deals with Google, Amazon, Microsoft, Dell, IBM, Hewlett Packard and even Facebook that have not been previously reported.


FREE MARKETS

Biden proposes his own version of ‘America First.’ Biden “is proposing sweeping new uses of the federal government’s regulatory and spending power to bolster U.S. manufacturing and technology firms,” reports CNBC.

Biden calls for a $400 billion, four-year increase in government purchasing of U.S.-based goods and services plus $300 billion in new research and development in U.S. technology concerns. Among other policies expected to be announced Thursday, he proposes tightening current “Buy American” laws that are intended to benefit U.S. firms but can be easily circumvented by government agencies.


QUICK HITS

Ugh: “The United States reported more than 60,000 new COVID-19 cases on Wednesday, the biggest increase ever reported by a country in a single day, according to a Reuters tally.

• Protesters are suing Columbus, Ohio, police.

• Read Jesse Singal and Matt Welch on the Harper’s free speech letter.

• “A unanimous U.S. Supreme Court held that the ‘ministerial exception’ to federal anti-discrimination law shielded a parochial school from a federal disability lawsuit filed by a discharged teacher,” Damon Root explains.

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Has the U.S. Government Finally Spent Too Much?

topicseconomy

When COVID-19 arrived in America, Uncle Sam was already deep in debt. The federal government was poised to have a permanent annual budget deficit of at least $1 trillion. Debt was already sky high thanks to demographic trends and a few entitlement programs that experts had warned us about for decades. But after the most recent three months of frenzied, bipartisan spending, those previous balances seem like small potatoes.

Emergency spending related to COVID-19 has increased government outlays by $3.6 trillion. The net deficit impact of this fiscal incontinence is roughly $2.4 trillion. So far, $1.4 trillion of this authorized spending has been committed. Another $400 billion has been authorized through executive action, with a net deficit impact of $80 billion. And $300 billion of that $400 billion has already been committed.

The Federal Reserve has made what is essentially an open-ended commitment to continually buy debt from states, municipalities, and businesses, and to purchase treasury bonds, notes, and bills. The Fed has printed and loaned out $2 trillion so far and is expected to create $3.5 trillion in new money by the end of 2020.

Where is all the new spending going? There was the creation of a $500 billion fund for businesses with under 10,000 employees or less than $2.5 billion in annual revenue—a fund that includes $25 billion for passenger air carriers, $4 billion for cargo air carriers, and $17 billion for businesses “critical” to national security. Eligibility for Economic Injury Disaster Loans from the Small Business Administration was expanded, in addition to $649 billion in small business loans to companies with fewer than 500 employees though a newly formed Payroll Protection Program.

Medicare payments to medical providers from May 1 to December 31 have been increased; Congress has suspended federal student loan payments and interest through September 30 and created a Higher Education Emergency Relief Fund; and a new line of credit was extended to the U.S. Postal Service. With millions thrown out of work, Congress passed significant paid leave legislation and an unemployment insurance expansion. It also sent checks directly to millions of Americans.

Looking at the spending that had passed as of early May, Brian Riedl of the Manhattan Institute predicted that the budget deficit would be $4.28 trillion in 2020 and $2.19 trillion in 2021. This year’s deficit is estimated at 19.3 percent of gross domestic product (GDP), nearly double the peak deficits during the Great Recession and second only to the deficits during World War II. Over 10 years, that spending is projected to add nearly $8 trillion to the national debt, pushing the debt held by the public to $41 trillion, or 128 percent of the annual GDP, within a decade. This debt-to-GDP ratio will exceed even that at the height of World War II. Moreover, the national debt came down after that war ended—but continued Social Security and Medicare shortfalls will keep the current debt rising indefinitely.

The numbers above assume no new additional spending. But of course such an assumption is utterly unrealistic. As of this writing, Democrats have proposed another $3 trillion stimulus bill. While that particular legislation probably won’t get very far in the GOP-controlled Senate, by the time you receive this copy of the magazine, it isn’t crazy to assume that President Donald Trump will have signed a massive spending bill with more Republican support. The White House is already talking about a cut to the capital gains tax and a payroll tax holiday that would likely speed up the Social Security trust fund depletion date by five or six years.

Extravagant money printing, increased spending, government meddling in the labor market, and corporate bailouts are sure to have consequences—but how exactly will those consequences play out?

I’m most uncertain about the first item on that list. Scholars can’t seem to agree about the likely effects of printing money under the current circumstances.

Deflation happens when the prices of goods and services drop. Although such an outcome would be hard on some businesses, others would appreciate the falling input costs, and consumers would reap large benefits. The latter half of the 19th century, which was marked by long periods of deflation, was also a period of remarkable economic growth.

Basic economic theory suggests that printing money should decrease its value, driving up prices. However, as long as the demand for goods is crippled by the current public health crisis, the pressure on prices will likely be downward, even with an increased money supply. The speed at which the economy is reopened and American consumers resume spending their money—as well as the speed at which production returns to normal—will determine how much (if any) inflation we eventually see. It’s virtually impossible to know ahead of time how these competing forces will balance out.

Even without severe deflation or inflation, a long-term increase in government outlays is bad news for America’s future. While emergency spending generally falls over time as the underlying crisis passes, economist Robert Higgs persuasively documented in his book Crisis and Leviathan that some emergency spending does not ever go away; government grows permanently larger as a result of intervention.

This is very much a problem. In a recent analysis of the current situation, economist Jamus Lim wrote that “large fiscal expenditures, as well as more loans by households and firms, will lead to sharp increases in public and private debt in the near future” and that “increases in total debt to GDP have significant negative effects on [economic] growth.”

In a review of academic papers published since the Great Recession, my Mercatus Center colleague Jack Salmon and I confirmed that insight. All but two of the studies found a negative relationship between high levels of government debt and economic growth. The empirical evidence overwhelmingly supports the view that a large amount of government debt hurts economic growth, and in many cases the impact gets more pronounced as debt increases. Prior to the COVID-19 crisis, Salmon and I calculated that “the effects of a large and growing public debt ratio on economic growth could amount to a loss of $4 trillion or $5 trillion in real GDP, or as much as $13,000 per capita, by 2049.” And spending has only shot upward since.

Is there a best-case scenario? Sure. If a vaccine or a cure is discovered rapidly, Uncle Sam will lose a large part of its excuse to keep spending money at this rate. There is a chance that many of the rules and regulations lifted during the crisis won’t be coming back, which could unleash new avenues for innovation and economic growth. And considering the abysmal failure of the federal government to head off and respond to the crisis, one can hope we’ll see a newfound recognition that our big-spending and unwieldy government is a problem, not a solution. But a lot of denial is required to believe these best-case scenarios are realistic.

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Has the U.S. Government Finally Spent Too Much?

topicseconomy

When COVID-19 arrived in America, Uncle Sam was already deep in debt. The federal government was poised to have a permanent annual budget deficit of at least $1 trillion. Debt was already sky high thanks to demographic trends and a few entitlement programs that experts had warned us about for decades. But after the most recent three months of frenzied, bipartisan spending, those previous balances seem like small potatoes.

Emergency spending related to COVID-19 has increased government outlays by $3.6 trillion. The net deficit impact of this fiscal incontinence is roughly $2.4 trillion. So far, $1.4 trillion of this authorized spending has been committed. Another $400 billion has been authorized through executive action, with a net deficit impact of $80 billion. And $300 billion of that $400 billion has already been committed.

The Federal Reserve has made what is essentially an open-ended commitment to continually buy debt from states, municipalities, and businesses, and to purchase treasury bonds, notes, and bills. The Fed has printed and loaned out $2 trillion so far and is expected to create $3.5 trillion in new money by the end of 2020.

Where is all the new spending going? There was the creation of a $500 billion fund for businesses with under 10,000 employees or less than $2.5 billion in annual revenue—a fund that includes $25 billion for passenger air carriers, $4 billion for cargo air carriers, and $17 billion for businesses “critical” to national security. Eligibility for Economic Injury Disaster Loans from the Small Business Administration was expanded, in addition to $649 billion in small business loans to companies with fewer than 500 employees though a newly formed Payroll Protection Program.

Medicare payments to medical providers from May 1 to December 31 have been increased; Congress has suspended federal student loan payments and interest through September 30 and created a Higher Education Emergency Relief Fund; and a new line of credit was extended to the U.S. Postal Service. With millions thrown out of work, Congress passed significant paid leave legislation and an unemployment insurance expansion. It also sent checks directly to millions of Americans.

Looking at the spending that had passed as of early May, Brian Riedl of the Manhattan Institute predicted that the budget deficit would be $4.28 trillion in 2020 and $2.19 trillion in 2021. This year’s deficit is estimated at 19.3 percent of gross domestic product (GDP), nearly double the peak deficits during the Great Recession and second only to the deficits during World War II. Over 10 years, that spending is projected to add nearly $8 trillion to the national debt, pushing the debt held by the public to $41 trillion, or 128 percent of the annual GDP, within a decade. This debt-to-GDP ratio will exceed even that at the height of World War II. Moreover, the national debt came down after that war ended—but continued Social Security and Medicare shortfalls will keep the current debt rising indefinitely.

The numbers above assume no new additional spending. But of course such an assumption is utterly unrealistic. As of this writing, Democrats have proposed another $3 trillion stimulus bill. While that particular legislation probably won’t get very far in the GOP-controlled Senate, by the time you receive this copy of the magazine, it isn’t crazy to assume that President Donald Trump will have signed a massive spending bill with more Republican support. The White House is already talking about a cut to the capital gains tax and a payroll tax holiday that would likely speed up the Social Security trust fund depletion date by five or six years.

Extravagant money printing, increased spending, government meddling in the labor market, and corporate bailouts are sure to have consequences—but how exactly will those consequences play out?

I’m most uncertain about the first item on that list. Scholars can’t seem to agree about the likely effects of printing money under the current circumstances.

Deflation happens when the prices of goods and services drop. Although such an outcome would be hard on some businesses, others would appreciate the falling input costs, and consumers would reap large benefits. The latter half of the 19th century, which was marked by long periods of deflation, was also a period of remarkable economic growth.

Basic economic theory suggests that printing money should decrease its value, driving up prices. However, as long as the demand for goods is crippled by the current public health crisis, the pressure on prices will likely be downward, even with an increased money supply. The speed at which the economy is reopened and American consumers resume spending their money—as well as the speed at which production returns to normal—will determine how much (if any) inflation we eventually see. It’s virtually impossible to know ahead of time how these competing forces will balance out.

Even without severe deflation or inflation, a long-term increase in government outlays is bad news for America’s future. While emergency spending generally falls over time as the underlying crisis passes, economist Robert Higgs persuasively documented in his book Crisis and Leviathan that some emergency spending does not ever go away; government grows permanently larger as a result of intervention.

This is very much a problem. In a recent analysis of the current situation, economist Jamus Lim wrote that “large fiscal expenditures, as well as more loans by households and firms, will lead to sharp increases in public and private debt in the near future” and that “increases in total debt to GDP have significant negative effects on [economic] growth.”

In a review of academic papers published since the Great Recession, my Mercatus Center colleague Jack Salmon and I confirmed that insight. All but two of the studies found a negative relationship between high levels of government debt and economic growth. The empirical evidence overwhelmingly supports the view that a large amount of government debt hurts economic growth, and in many cases the impact gets more pronounced as debt increases. Prior to the COVID-19 crisis, Salmon and I calculated that “the effects of a large and growing public debt ratio on economic growth could amount to a loss of $4 trillion or $5 trillion in real GDP, or as much as $13,000 per capita, by 2049.” And spending has only shot upward since.

Is there a best-case scenario? Sure. If a vaccine or a cure is discovered rapidly, Uncle Sam will lose a large part of its excuse to keep spending money at this rate. There is a chance that many of the rules and regulations lifted during the crisis won’t be coming back, which could unleash new avenues for innovation and economic growth. And considering the abysmal failure of the federal government to head off and respond to the crisis, one can hope we’ll see a newfound recognition that our big-spending and unwieldy government is a problem, not a solution. But a lot of denial is required to believe these best-case scenarios are realistic.

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