The Beast Is Starving

Starve the federal government? “I just want to shrink it enough so I can take it home and drown it in the bathtub.” ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ March 15, 2024  |  [Sign Up]( The Beast Is Starving, Why Don’t We Just Feed It? “I don’t want to starve the federal government, I just want to shrink it enough so I can take it home and drown it in the bathtub.” – Grover Norquist [Special Reminder: In case you missed our late-day announcement yesterday, [The Real October Surprise]( The Essential Investor has merged with legacy contributors to Agora Financial. The new, larger, more inclusive project is called The Grey Swan Investment Fraternity. If you’re interested in the scope and benefits of our new endeavor, please see what prompted us to merge [here](. If you’ve been a member of The Essential Investor, please keep an eye out for your new benefits.] Dear Reader, March 15, 2024 – We began our exposé of Biden’s proposed $7.3 trillion budget for 2023. But we didn’t get very far. As such, it would be wise to read today’s missive as a work in progress. Your comments, as always, are welcome. Please send the intelligible ones [here](mailto:addison@greyswanfraternity.com). Where to begin? Well, first of all, budgets in Washington don’t work like budgets for normal people. Whoever is editing the 2024 budget Wiki page “gets it”: The United States federal budget for fiscal year 2024 runs from October 1, 2023, to September 30, 2024. For the first months of the fiscal year (which begins October 1), the federal government is operating under a continuing resolution (CR) that extends 2023 budget spending levels as legislators debate the specific provisions of the 2024 budget. The current CR is set to expire in early 2024 (i.e. now-ish). The infamous “continuing resolution” is why we get treated to a round of headlines every few months covering the battle in Congress over another “stop gap” measure. Currently, securing the border and ongoing support for Ukraine are both being held hostage to the political process. Either way, Congress must spend to keep the lights on and national security tight. As a society, we can’t allow elderly folks to eat cat food in their golden years. Nor would it be fair to cut the paychecks of military personnel who live week-to-week counting on the money to raise young families. So we continue to resolve to spend without limits. The last time Congress passed all 12 spending bills of an actual presidential budget was nearly three decades ago in 1996 under president Clinton. Which is also why we get a finance lesson in how the government borrows money every couple of years or so. The last being in May, 2023. “Congress has always acted when called upon to raise the debt limit,” the U.S. Treasury website confidently proclaims. “Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents. “Congressional leaders in both parties have recognized that this is necessary.” The go-to justification for both parties, at the 11th hour mind you, is that “It’s money we’ve already spent, so if we don’t raise the debt ceiling, we’ll default.” A default would be bad for the government’s credit rating. Long-suffering readers will be well aware that a country wielding reserve currency status for the world need not ever default. Ever. There are any number of ways the Fed and Treasury can just “print” money. And so we resolve to keep spending money without limit. (That is, unless said the [nation’s “exorbitant status,” is systematically revoked]( The budget process itself is labyrinthine and opaque. “The last time Congress comprehensively reformed the budget process was in 1974,” wrote Mike Enzi with a budget process proposal for the 115th Congress (2017-2019). “Times have changed, and the 50-year-old process has only grown more dysfunctional and antiquated. It is time for Congress to fix America’s broken budget process.” Enzi’s proposal for refining the process was, itself, 9 pages long. And not acted upon. The short answer is to the question at hand: there’s a “fat chance” we’ll see any of the deficit-reducing benefits promised during Biden’s State of the Union Address. But there’s more… This particular budget faces a number of hurdles before it becomes law. Rather than digest the work of others, allow me to list just a few from the [American Institute for Economic Research (AIER](. CONTINUED BELOW... >>ADVERTISEMENT<< 2024 – The Real Election Year Surprise In 2016, the October Election Surprise was Hillary Clinton’s email scandal… In 2020, the October Election Surprise was the suppression of all the dirty material on Hunter Biden’s “forgotten” laptop… Now, in 2024, we’re forecasting an October Election Surprise that almost no one sees coming — and this time it’ll be way more devastating than anything you’ve seen before. [Click here to learn about 2024’s real October Election Surprise »]( It’s not at all what you think. CONTINUED... [Biden’s budget bankrupts America]( overspend, overtax and overregulate” reads an opinion piece in the Washington Times by Vance Ginn. “In President Biden‘s recent State of the Union address, he painted a rosy economic picture, touting what he called ‘Bidenomics’ as the driving force behind what he claims is a robust economy. He pointed to a low unemployment rate, the absence of a recession, and a lower inflation rate as evidence of success. Reality, however, tells a different story. And Mr. Biden’s recently released irresponsible budget sends the federal government and America further toward bankruptcy. “Despite the president’s assertions, the economy and inflation remain top concerns for most Americans. The disconnect between the headlines and the lives of ordinary citizens underscores the profound challenges facing the nation’s economic landscape.” Continue reading [here](. [“Unrealized Gains Tax” is an Economic Fallacy]( by the aforementioned Vance Ginn, Ph.D., founder and president of Ginn Economic Consulting, LLC. “Taxing unrealized capital gains on property, stocks, and other assets is [not just]( a [bad idea]( it’s an economic fallacy that undermines economic growth and personal liberty. Unfortunately, President Biden’s $7.3 trillion budget [proposes such]( a federal tax. Vermont and ten other states have made similar moves. “This tax should be rejected, as it is fundamentally unjust, likely unconstitutional, and would hinder prosperity and individual freedom. “A tax on unrealized capital gains means that individuals are penalized for owning appreciating assets, regardless of whether they have realized any actual income from selling them.” Continue reading [here.]( It’s also unconstitutional. Here’s why: [The Unconstitutional Tax on “Unrealized Capital Gains”]( Philip Magness, the Independent Institute and Research Fellow at AEIR. “The Biden Administration’s 2023 budget bill made headlines by proposing a so-called ‘billionaire tax,’ imposing a 25-percent minimum rate on the “unrealized capital gains” of the wealthiest Americans. The Biden measure rests on an economic falsehood. The new proposal rests on the work of far-left academics such as Thomas Piketty and Gabriel Zucman, who erroneously claim that wealthy Americans pay a lower tax rate, on average, than the poor. “This assertion arises from a compounding of basic empirical errors, beginning with the blurring of the distinction between income (annual earnings) and wealth (net worth) as well as a fair amount of intentional statistical manipulation.” Continue reading [here](. Beyond the short time-frame… and the constitutional hurdle… to make it stick, the new tax law required to accrue any fiscal benefits would have to stay in place for 10 years – well beyond Biden’s second term. The 2024 budget is philosophically at odds with a free and prosperous people. And morally bankrupt. It presupposes that ‘wealth,’ even that reserved by the .01%, would be better used if redistributed according to the political talking points of the party in power. Either party. God forbid, they try to pass a decent balanced budget. Of course, what’s new, right? Why try to hide it?  The very premise of the budget process depends on voter greed. The late Alexander Tytler, Lord Woodhouselee, a Scottish advocate, judge, writer, and historian who was a Professor of Universal History and of Greek and Roman Antiquities at the University of Edinburgh, observed before his death in 1813: A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largesse out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy. Who are we to say the electorate hasn’t already collectively arrived at that point in history? So it goes, Addison Wiggin, The Wiggin Sessions P.S. Like I said, these thoughts are a work in progress. [Place your comments accordingly.](mailto:addison@greyswanfraternity.com) P.P.S. As unlikely as a budget dependent on a ten-year span, there’s one more item to consider: the steady and increasing pace of the dollar’s demise. “With the creation of the FED in 1913,” our friend [Mark Jeftovic]( wrote this morning, “the intent was to have a system of central control of the money supply, to provide a backstop in times of crisis, and to have a gold-based monetary system. “However, the outcome led to a handful of powerful global bankers rather than a few powerful centralized institutions. Shedding light on the inner workings of the FED and BIS exposes a few harsh truths: exploitation at the highest levels of society.” That U.S. dollar is dependent on the kindness of the constituent nations in the global monetary order. [Which is another reason to keep an eye on the date October 1, 2024](. Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com. 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