The Morning Rant: Minimalist Edition

Deficit spending is an absolutely awful thing, and necessary only in dire circumstances. I think most people will agree that our deficit spending during World War II was a good idea. And temporary deficits for discrete and limited reasons may be good political policy.

But over the past 30 years we have lost our f*cking minds and spent at rates that are unfathomable. According to Murray Rothbard, during the Great Depression, total tax burden almost doubled. What would be required today to approach some sort of parity with that time? 95% marginal tax rates? $5/gallon gas tax? 50% capital gains tax? And even with that the math simply does not add up.

Without a significant decrease in government spending lasting for decades, we are in a money-printing spiral that will end very, very badly.

The arguments made against any sort of government responsibility with its check book are legion. "It will hurt the poor." "It will destroy the middle class." "It will depress the economy and we will have another depression." The deficit is too large and the debt can't be paid!" "Besides, governments can run deficits indefinitely!"

But they can't. Just ask the silent and ignored people in the flyover states how they are doing with stagnant wage growth and skyrocketing inflation. Or first-time home buyers who can't afford more than a tiny home far from work because government borrowing crowded out private lending.

Inflation is caused by government. There is no other economic player with the power to cause it, and anyone who suggests otherwise is a liar or a fool...or both. It is also an incredibly destructive thing, and entire societies can be brought to their knees by its depredations.

But with sufficient will, inflation can be ended. And how is that done?

DOGE-Style Efficiency Cuts Deliver Argentina's First Budget Surplus in 123 Years.

In just one year, President Javier Milei has transformed Argentina’s economic landscape, slashing the national budget deficit to zero for the first time in 123 years. This is a historic milestone in his presidency, which began on December 10, 2023.

Milei took over an economy crippled by rampant inflation, where supermarkets had to adjust prices daily. However, with his aggressive cutbacks to the size of the state, often symbolized by his wielding a chainsaw, Milei has steered the country back toward fiscal stability.

Argentinian inflation plummeted from a staggering 200 percent in 2023 to a mere 2.7 percent by October 2024. This dramatic reduction was celebrated by Milei in a recent broadcast, in which he stated, “The deficit was the root of all our evils—without it, there’s no debt, no emission, no inflation. Today, we have a sustained fiscal surplus, free of default, for the first time in 123 years.”

Think what Donald Trump can do in four years, and then realize that no economic policy, no government program, no deficit spending can revive an economy faster than simply allowing the people to make their own economic decisions. That's what deficit reduction allows, and that is the glory of the free market.

Donald Trump and his capable advisors have the opportunity to take Javier Milei's grand experiment with Argentina and extrapolate it to the biggest economy on earth. We saw what Donald Trump's mostly rational economic and government policies were able to achieve during his first term. Simply decreasing regulation and government interference in the economy resulted in a truly impressive economic expansion. If that returns, and add to it a marked decrease in government spending, our economy will return to its former glory, with the opportunity for long-term economic growth that will go a long way toward repairing the damage done by the Biden junta's rabid spending and top down control of the economy.

[Crossposted at CutJibNewsletter]

posted by CBD at 11:00 AM

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