“Rust Belt city benefits from Bidenomics” headlined an article last month in the Wall Street Journal, detailing the economic rebound being experienced by Terre Haute, Indiana, a former manufacturing center in decline for many decades.
Suddenly, due to an infusion of stimulus funding from the 2021 American Rescue Plan Act and the 2022 Inflation Reduction Act, this community is experiencing such a windfall that the mayor is “running out of room on his whiteboard” tracking infrastructure projects. New factories are being built, new home starts have tripled, long vacant properties are rehabbed. The venerable Charlie’s Pub and Grub will get a new roof and awnings.
The new initiatives in Terre Haute are part of the hundreds of billions of dollars in federal subsidies supporting manufacturing, housing, and clean energy ventures doled out during the Biden administration.
But one question was never asked. Where is all this money coming from? You might think “taxpayers,” but the truth is that we spend $2 trillion more every year than we take in. There are no available tax-derived funds available to distribute.
Instead, we spend fantasy money, loans charged off to future generations who don’t vote yet. We really do love them, just not as much as the luxury of getting to have things that we don’t have to pay for.
The Terre Haute story, just one of thousands like it, contains several insights into why spending cuts are so difficult and rare. The public habits of mind we have developed about the role of government and the responsibility of government to live within its means are the ultimate reason we have fallen into such fiscal danger.
Earlier generations of Americans would have been alarmed, not heartened, at the gigantic unfunded Biden spending surge. We instead assume that none of us should endure hardship or decline and that if we do, it is the duty of government to rescue us. Personal responsibility is outmoded.
Government has never been known for its efficiency, so all these “free” things are actually quite expensive. The good news is we still have a productive economy that has generated 1.4% revenue growth, net of inflation, since 2001, the last year the budget was balanced. Reasonably prudent governance would have achieved budget surpluses.
But that’s not what happened. Politicians spent so much feeding our welfare addiction that spending grew by an inflation-adjusted 3.0% annually, creating the true crisis we now face. Present projections by the Congressional Budget Office indicate spending will continue to outpace revenues, absent reform. Our national debt stands at an unimaginable $36 trillion, while borrowing costs are rising.
We’re in deep trouble. It may well be too late to avoid fiscal collapse. Interest on the national debt, the only truly non-negotiable item in the budget, tripled during the Biden years. It now exceeds total defense spending.
Interest payments amount to half of the total amount borrowed We are borrowing money to pay interest on the growing sums already borrowed, with no plan in place to reduce the debt amount, the dreaded Doom Loop.
Yet at this point, millions of families and seniors, businesses and governments manage their finances based on the expectation of federal subsidies, without which they presumably would be bereft. Over 75% of the federal budget goes to support these private expenditures.
Can Trump be the white knight who rescues us from fiscal doom? The logistics aren’t all that ominous (e.g., raising the retirement age of Social Security by two years would help), and Trump has generated more support for cost-cutting than any politician in memory. But it’s a matter of simple arithmetic. We can never balance the budget without addressing entitlements. That’s where the money is.
Entitlements are termed “mandatory” spending, but they are really just creations of Congress which can legally amend them at will, if they have any.
Unfortunately, Trump so far shows more interest in the low hanging fruit (Department of Education, USAID, obvious fraud) than in the hard work of convincing the American people that substantial entitlement reform is risky but necessary. Without him, Social Security and Medicare will remain No-Go zones even for budget hawks.
The task only gets harder as time passes. We’ll see soon.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
Thanks to DOGE and four wunderkind coders in Treasury’s basement, Americans learned this week that their government sent millions to fund a “DEI musical” in Ireland, a “transgender comic book” in Peru, electric vehicles in Vietnam, and an Anthony Fauci exhibit at the NIH Museum.
Faster than Ludicrous+ mode on a Tesla, the Trump admin’s new code bros are sifting through the financial ledger of America’s spending. Just 20 days in office and the new administration has saved the American taxpayer billions of dollars — exactly what Trump promised on the campaign trail. And as the president’s third week unfolded, news worsened for Democrats and America’s permanent bureaucratic state.
It seems the permanent bureaucracy borrowed the U.S.S.R.’s media playbook, funneling millions to left-wing news organizations such as The New York Times, Politico and Reuters. Evidently it wasn’t enough that a Republican in the newsrooms of our state-run media outlets, PBS and NPR, is rarer than a cogent sentence from Kamala.
Democrats, meanwhile, have decided that this Deathstar boondoggle of government spending at its worst is the hill they want to die on. Conservatives watched with glee as Rep. Maxine Waters, Sen. Chuck Schumer, et al, led the Charge of the Lightweight Brigade to USAID’s former headquarters. Cue dopey chant: “wE Will wiN!” (2025 update—no, you didn’t).
Before all the spending porn (as the great Louisiana wag, Senator John Kennedy dubbed it), Democrats’ opinion polls were in the gutter, with a disapproval rating of 57%.
Do the Dems think rushing to the barricades to defend out-of-control spending will earn them the respect and admiration of the American public? Expect their approval ratings to continue to sink like the Hindentanic.
USAID is just the beginning.
Wait until DOGE bites into the Department of Defense, which has never passed an audit.
In 2019 while on reserve duty at the Pentagon, I was thrown into yet another meeting chockablock with PowerPoint slides, so beloved by our military. This particular meeting was to cover the results of a service-wide audit. To summarize about 187 slides and 2 hours: we failed.
All the top brass in the room somberly listened to the auditors describe $5 billion worth of missing aircraft engines, leases for buildings and land that did not exist, accounting systems closer in age to the abacus than a modern spreadsheet, and miles of missing debits and credits.
As the most junior officer in the room, I kept quiet but closely studied the faces of my superiors. They too, kept quiet, only murmuring “next slide” as disaster after financial disaster was flashed across the screens.
My inner fiscal hawk prayed that the service chief would flip the table over and channel Col. Nathan “YOU CAN’T HANDLE THE TRUTH” Jessep. But he remained impassive and the meeting dissolved with a whimper and no plans for reform.
That night leaving D.C., I happened to bump into a very senior republican senator at Reagan National Airport and thought it my civic duty to share the (unclassified) events of earlier in the day. I told the venerable appropriator that the audit had revealed billions in waste, fraud, and abuse, and even suggested he should make a request to see the failed audit for himself.
(In the hindsight afforded by three years working in the U.S. Senate, I now know how utterly naive this moment was).
He paused a moment, then said, “Well, you know how these things are. That’s Washington for you.”
I felt sick at the time, which is likely the same feeling many Americans are having this week as they see the grift laid bare in our nation’s capital.
But the good news is that Trump and his DOGE team have restored the hope that government might be right-sized and returned to solid financial footing.
On Friday, when he was asked about the job Elon Musk is doing, the President remarked, “I think we’re going to be very close to balancing budgets for the first time for many years.”
What a tantalizing prospect — a government that spends within its means may truly bring about the golden age of America promised in the president’s inaugural address.
Morgan Murphy is a contributor to The Daily Caller News Foundation, military thought leader, former press secretary to the Secretary of Defense, and national security advisor in the U.S. Senate.
Things are just not going well for the leftwing activist groups, billionaire-funded NGOs and trial lawyer firms who have recruited a growing number of state and local government entities to sue U.S. oil and gas companies involving specious claims for damages caused by climate change. In recent months, the lawfare campaign, coordinated mainly from the offices of one San Francisco-based firm, has suffered a series of adverse judicial decisions in what appears to be a rising consensus in the nation’s courts.
Just two weeks after suffering a major setback in a decision involving Anne Arundel County, Maryland, the pushers and funders of this lawfare campaign were tossed out in a case targeting ExxonMobil, Chevron and additional defendants in New Jersey. There, Superior Court Judge Douglas H. Hurd dismissed the Garden State’s lawsuit with prejudice based on the same federal primacy arguments which prevailed in recent decisions in New York City and Baltimore, as well as in the Anne Arundel case.
In seeking damages, New Jersey adopted similar tactics adopted in the other cases that make up this lawfare campaign, claiming they’ve been harmed by “climate change” impacts allegedly caused by the emissions by oil companies, but attempting to couch the damages as violations of state laws unrelated to air pollution. But Hurd was having none of it.
“Despite the artful pleading by the Plaintiffs in this case,” the judge says in his decision, “this court finds that Plaintiffs’ complaint, even under the most indulgent reading, is entirely about addressing the injuries of global climate change and seeking damages for such alleged injuries.”
The problem for the states, cities and counties who have signed up for this lawfare campaign in the hopes of grabbing some big bucks from Big Oil is that their arguments inevitably amount to a local effort to de facto regulate air quality, an area of regulation in which the federal government has always asserted its primacy. There’s a very good reason for this: If every city, county and state in America were allowed to regulate air quality, the economy would soon grind to a halt as it becomes impossible to do business in this country.
Like the judges in the other cases decided thus far, Hurd conceded to that reality in dismissing the New Jersey case, saying, “As Defendants state in their moving brief, ‘the federal system does not permit a State to apply its laws to claims seeking redress for injuries allegedly caused by interstate or worldwide emissions,’” adding, “In conclusion, only federal law can govern Plaintiffs’ interstate and international emissions claims because ‘the basic scheme of the Constitution so demands.’”
The decision in the New Jersey case no doubt comes as a real disappointment for the billionaire-funded foundations and NGOs who spent years pushing for the state attorney general’s office to bring a case. In 2023, Energy Policy Advocates obtained emails detailing tactics employed by the Rockefeller-funded Center for Climate Integrity (CCI) to convince various cities and counties in the state to sign onto the lawfare campaign.
Those emails revealed close coordination between CCI and New Jersey officials, even to the extent of CCI funding an “Accountability University” to educate lawfare participants about the best tactics and talking points to deploy in their big money grab efforts.
CCI even offered to “ghost write” opinion pieces for public officials and “serve as an extra set of hands,” adding, “…there are absolutely no legal obligations. Since we are a 501 c3, there is no pledge or legal sign on’ required. Rather, we view ourselves as an extra set of hands to help public officials…”
So, what’s the point of all this, you might ask? Well, the point is that when you see one of these lawsuits brought by a city, county or state government, just know that none of this is happening organically. Also know that this big money grab costs these companies millions to defend themselves, and we all end up paying for it at the gas pump and in our home utility bills. Maybe it’s time we all demand these billionaires and trial lawyers find more productive ways to spend their time and money.
David Blackmon is a contributor to The Daily Caller News Foundation, an energy writer, and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
President Trump’s historic victory in the November election gave him a clear mandate from the American people. And so far, he hasn’t wasted any time getting to work. In his first month back in office, Trump signed 45 Executive Orders (EO) in an effort to put America first and undo much of the damage created by the Biden administration. And that’s especially true with his executive actions to unleash American energy.
Ending the Net Zero Climate Cult Fantasy
For four years under President Biden, the American people were forced to endure an administration that was hellbent on pursuing a net zero agenda. Across the country, they pushed these radical and costly climate action plans to fundamentally transform and restrict the energy options available to consumers. Along with this came calls from the Left to ban gas stoves, gas cars, gas-powered lawn equipment, and hundreds of other draconian ideas to limit the freedom of the American people.
If the high cost of these plans wasn’t enough, they have also proven to be unreliable. States and countries that have committed to energy sources like solar and wind as part of this net zero fantasy have experienced rolling blackouts, continually demand that their customers use less, and eventually have to make haste to open reliable sources of generation they had closed down. Isn’t that right, California?
But Trump’s Executive Order 14154 unleashes fossil fuel production and use in America while unwinding much of the damage caused by the Biden administration…
Exactly a century ago this year, the Supreme Court, in its decision in Pierce v. Society of Sisters, recognized the right of parents to direct the education of their children, writing that “[t]he fundamental theory of liberty upon which all governments in this Union repose excludes any general power of the State to standardize its children . . . The child is not the mere creature of the state.” Today, just as they did a century ago, parents rely on the courts to serve as a backstop against abusive government policy.
Sadly, some courts in America are shutting the door of justice in the face of parents seeking to vindicate their rights and the rights of their children. In a case out of Wisconsin called Parents Protecting Our Children v. Eau Claire Area School District in the Seventh Circuit, the federal court of appeals with jurisdiction over cases arising in Wisconsin, Illinois and Indiana, parents challenged the school district’s policy directing school officials to hide a child’s “social gender transition” from their parents. As the school told its employees, “parents are not entitled to know their kids’ identities.That knowledge must be earned.”
Incredibly, the Seventh Circuit found that the parents’ harm in that case was merely speculative. Apparently, since plaintiffs must show harm to have standing to sue, parents must wait until they find out that their son’s school has been helping him dress as a girl and use the girls’ restroom for six months before they can challenge the policy.
The Supreme Court chose not to review the Seventh Circuit’s decision in that case. Justice Samuel Alito wrote a short dissent, joined by Justice Clarence Thomas, explaining that the parents’ harm is not speculative and that “some federal courts are succumbing to the temptation to use the doctrine of Article III standing as a way of avoiding some particularly contentious constitutional questions.”
Nor is this an isolated incident of judges dodging the controversy of gender ideology. The Fourth Circuit, the appeals court with jurisdiction over Maryland, West Virginia, Virginia, North Carolina and South Carolina, came to the same conclusion in John and Jane Parents 1 v. Montgomery County Board of Education. A district court in Ohio did the same in Doe v. Pine-Richland School District.
Parents’ fundamental rights to direct the upbringing of their children, and the right of children to be free from ideological indoctrination by school officials, depends on courts that are willing to protect those rights. That is why Advancing American Freedom is filing an amicus brief asking the Supreme Court to take up Blake Warner’s challenge to an Eleventh Circuit rule which effectively requires parents to hire a lawyer before they can represent their children’s interests in court. Specifically, while people can bring their own claims in court without a lawyer, and parents can sue on behalf of their children, the Eleventh and some other courts have found that parents cannot sue on behalf of their children without hiring a lawyer. While Mr. Warner’s claim is not related to gender ideology, his challenge to this rule is essential because his success would ensure that parents who are unable to afford an attorney can still seek judicial protection for the rights of their children.
On Jan. 29, President Trump issued an executive order that, among other things, ordered the removal of federal funding from schools that engage in “social transitions of a minor student” and directed the attorney general to work with state and local officials “to enforce the law and file appropriate actions” against school officials who “facilitate the social transition of a minor student.” Trump’s order is important but know that gender ideologues will undoubtedly stage massive resistance. Parents must remain vigilant, and courts must begin to take their claims seriously. The Supreme Court should entrench parents’ rights by taking Mr. Warner’s case and striking down the counsel mandate.
Donald Trump’s renewed pledge to “Make America Great Again” requires nothing less than reigniting economic growth and prosperity. Wealth creation is essential. Yet as Congress prepares to extend and expand upon Trump’s landmark Tax Cuts and Jobs Act of 2017, he can take matters into his own hands by issuing an executive order to index capital gains for inflation.
Taxing inflationary “phantom” capital gains is an unfair and ill-advised policy that punishes risk and success.
Consider this: You invest $1,000, and after four years of Joe Biden in the White House, you sell that investment for $1,100. But since inflation raged during Biden’s tenure, the $1,100 you receive will be worth less in real terms than the $1,000 you invested. And yet, under current law, you will pay a tax on your $100 capital “gain.”
Talk about perverse!
“As has been well documented,” writes Alan Auerbach, University of California economist, “realized capital gains may be subject to tax rates that easily exceed 100% of real gains in the presence of inflation.”
But it’s the law. And not only would eliminating it be the fair thing to do for investors, it would ignite a surge of American prosperity.
Eight years ago, the late Treasury economist Gary Robbins estimated that indexing capital gains for inflation would, by 2025, create an additional 400,000 jobs, grow the U.S. capital stock by $1.1 trillion and boost GDP by roughly $500 billion. Because capital gains were never indexed, average household income today is $3,600 lower than it could have been otherwise.
However, it’s never too late to start doing the right thing.
Congress has repeatedly toyed with indexing capital gains. In fact, indexing capital gains used to be a bipartisan issue. In the early 1990s, congressional Democrats touted indexing as an effective way to boost economic growth and benefit workers.
“If we really want to increase growth,” said a youthful Chuck Schumer, the then-future Senate minority leader, “there are proposals that we can do. I would be for indexing all capital gains, savings and borrowings.”
Having mastered the ways of the D.C. swamp, Schumer now opposes indexing capital gains. Listen to Congressman Schumer, not Senator Swamp.
Indeed, as Trump emphasized in 2019, “Indexing is something that a lot of people have liked for a long time. It’s something that would be very easy to do. It’s something that I am certainly thinking about.”
Looking forward, the Congressional Budget Office estimated last month that federal capital gains tax receipts will total $2.8 trillion over the decade ahead. If only one-fourth of those tax receipts—a conservative estimate—are due to taxing phantom gains, American taxpayers will pay $700 billion in taxes on income that doesn’t exist.
Opponents of capital gains indexation say the subsequent revenue loss would be too great. But inasmuch as inflationary gains should not have been taxed in the first place, a revenue loss is a good thing. It represents the correction of a tax injustice.
The second-order effects that Robbins documents should remove any reservations based on revenue loss. Without the federal tax on inflationary gains, asset prices will adjust until they reach a new, higher equilibrium. Investors will see their portfolios appreciate bigly.
It’s a safe bet that millions of American investors and pensioners would choose a Dow Jones average of 50,000 with indexation over a Dow Jones average of 44,500 without indexation.
As taxpayers realize real capital gains, the federal government will collect billions of dollars in new tax revenue. Federal tax revenue may ultimately be higher with indexation, not lower.
There is the question of whether Trump has the legal authority to issue an executive order instructing the Treasury secretary to issue new regulations indexing the capital gains cost basis for inflation. It comes down to whether the governing Internal Revenue Code section covering the definition of the word “cost” is sufficiently ambiguous to allow regulatory reinterpretation. Congress never specifically mandated that “cost” was to be determined in nominal terms, nor did it prohibit the use of real valuation.
According to a watershed 2012 paper by Charles Cooper and Vincent Colatriano in the Harvard Journal of Law & Public Policy, “jurisprudential developments over the last two decades have confirmed . . . that Treasury has regulatory authority to index capital gains for inflation.” With that justification, Trump has little reason to hold back.
James Carter is a contributor to The Daily Caller News Foundation and a principal with Navigators Global. He previously headed President Donald Trump’s tax team during the 2016-17 transition and served as a deputy assistant secretary of the Treasury for then-President George W. Bush.
