Tag: economy

How Much is the Federal Government Worth to You

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2/27/25

We consumers are making decisions on what to buy every day. Do I get the premium brand ice cream of the store labeled one? Do I drive 4 more blocks to save a penny per gallon on gas? Can I afford that vacation or should I save the money for my retirement? These are real decisions that are made every day across America and by folks in every socioeconomic stratum. The lack of information available has thwarted our ability to make the same decisions when it comes to our federal government? DOGE has changed that.

Any discussion of value must begin with the service/product being provided. Just what is being offered for “consumption”? In the case of the federal government, it is supposed to be spelled out in the Constitution. Clearly outlined in the preamble are the two things; personal safety including defense of our territory, and coordination of economic activity. While the particulars of these two delineated functions are left to the interpreter, it is clear that over the course of our nearly 250 years as a country, the definitions have been severely expanded.

Most Americans understand the need for money to be spent on our “defense”. Does that include sex change operations for servicemen and women? What about funding of United Nations  “peacekeeping” forces stationed in remote African countries? CIA activities in Panama? Is healthcare a “right” that the government is bound to provide? Is personal economic success (ex. universal income) part of the promotion of general welfare? We voters only get to answer these questions through our elected Representatives who may, or more likely, do not have any clue on whether these are proper expenditures. They are relying on bureaucrats who are “experts” on the situations. Many of whom are employed because we are spending the money so as to be heavily biased.

Through DOGE, we are seeing more clearly how far afield of the Constitutional dictates we have veered. A return to basics where we question every dollar can help voters gauge which candidates are being better stewards of their money. With the findings being presented through DOGE, voters must ask the question, “Do you support this expenditure and if so, why?” Through the revealing of each check being signed by our government, we better understand the worth of that purchase against our value proposition. We can then apply it to the representative’s/candidates’ answer.

Instead of choosing who to represent you by which color lawn sign they use, the light of knowing where your tax dollars are being spent will provide more substantial reasons on which to make your selection. How much is that worth to you?

A Case for Tariffs

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9/27/24

Tariffs are as old as countries. Every nation has used them to some extent. In some cases, it was punitive to countries selling products they either sold at less than cost or subsidized. In others, it was to protect a domestic industry deemed important to the country. Think, businesses that employ large numbers of workers. The tariffs that seem to find a way to stay in place through both party’s administrations are those that are imposed for “national security” reasons.

Tariffs are being labeled as inflationary because they pass along the cost (tariff) to the consumer. Of course, the collected tariff goes to the state. But wait a minute! What if tariffs are coupled with tax policies that offset the additional cost of the increased prices?

If more goods are produced domestically, even at higher costs (labor primarily), those workers are earning income, paying taxes and contributing to the overall economy. When coupled with tax policies that reward domestic production, the net effect can actually be growth in both per capita income and revenue for the state. Such was the case during Trump’s first term.

When the issue involves a national security item, it is incumbent that we take every action to perform the single most important duty of the federal government, secure our nation. It requires sourcing materials, establishing redundancy and assuring adequate production capabilities. Think WWll mobilization. Determining national security items can be daunting but at the basest level, must include raw materials for materiel and armaments and manufacturing capabilities to produce them.

The final case for protectionist policies like tariffs is we have the most desirable market in the world. Every entrepreneur would love to have access to our  market. Yet, other countries restrict our access to their markets. For example, China was given entre to the world economy through membership in the World Trade Organization in 2001. The thinking was that under then leader Xiao Ping, businesses would have unfettered access to the billions of Chinese consumers. Comparative advantage would find equilibrium where goods and services would flow to the country positioned to offer the best value. That held while Ping was opening up the China market but now under XI, we find how one-sided the trade has become.

Many countries, including some of our allies, have market practices that are similar to those of China while we remain a bountiful basket for them. The use of tariffs, helps to even the playing field and, importantly, when coupled with other fiscal practices, can lead to greater prosperity for our country. It is high time for the USA to treat its market place like the jewel it is and only allow for fair traders to have access. If tariffs are required to get their attention, so be it.