Americans of all persuasions have reached a rough consensus in favor of cutting government spending. We all, with the possible exception of hard-left Democrats, know that our present course is unsustainable and will lead to fiscal ruin.
Yet so far, no politician in a position to do so has been able to accomplish the feat. Ronald Reagan’s heart was in the right place, but he wasn’t able to get a reluctant Congress to go along without giving up his dream of ending the Cold War.
Most presidents and congresses since have been MIA in fiscal discipline. Donald Trump, although successful in many policy initiatives, failed utterly in this most critical area of all.
But now there is suddenly hope arising from an unexpected quarter – Argentina. Javier Milei, their new president, has shown after one year that it is in fact possible to reduce the size and scope of the state. It takes clear vision and resolve, not just bluster and campaign slogans that melt under populist pressure to spend.
Milei’s political persona is brash and flamboyant. He sported a chainsaw during his presidential campaign to dramatize his zeal for cutting spending. But he is a serious economist, a former university professor who has published over 50 academic papers. He fully understands the relationship between free-market principles and economic growth.
He doesn’t pander. During his campaign, he was candid about the effect of the large cuts in spending he contemplated including the termination of tens of thousands of jobs, the elimination of government agencies, and the loss of regulatory protection many would experience.
Here’s the key. Unlike most politicians who make extravagant promises, he did what he said he would. The International Monetary Fund confirms that in his first year, he cut government spending by an astonishing 30%, he eliminated or downsized 12 government ministries, he canceled 80% of public infrastructure projects, and he reduced the public payroll by 20%.
The results already speak for themselves. Argentina has a balanced budget for the first time in 10 years. The first quarterly surplus appeared in April. Significantly, inflation has been reduced from an intolerable 25% monthly in 2023 to about 2% per month currently. Argentina’s credit ratings are starting to improve. Output is beginning to expand.
Once Argentina’s banks ceased printing money to cover chronic deficits, economic pain was bound to ensue. Massive debt is still out there. As Milei warned, unemployment is up and the poverty rate has jumped to nearly 50%.
Yet Argentines seem willing to stick with the program. The amazing drop in inflation (they have their money back) and the belief that the pain will be worth the gain seems to be keeping up morale. Milei’s approval rating is 55% and rising, with few signs of widespread discontent.
It helps that deregulation has already produced benefits. The Milei government has improved everyday life by slashing red tape around things like air travel, divorce, and satellite Internet. A housing boom has developed with rent deregulation. Rents have stabilized and mortgages are once again available. The poverty rate is already falling.
The left is not impressed, of course. Al-Jazeera calls Milei’s presidency a “disaster.” The BBC worries that he is “influencing” America’s new policy makers, asserting that “taking inspiration from Milei to reduce the size of government doesn’t make any sense.” The New York Times frets about the hardships being forced on Argentines.
The tantrum on the left is understandable. Argentina, once a wealthy nation, has been brought low by decades of autocratic, collectivist economic governance. Milei convinced voters that Argentina should not follow Cuba, Venezuela, and other failed economies down the “soak the rich” path.
He preached not more government but less, not more trade barriers but fewer, not higher taxes but lower. If Argentina succeeds, leftists have some serious explaining to do.
The incoming American administration seems interested in learning from Argentina’s experience. “The deficit was the root of all evils – without it, there’s no debt…no inflation,” Milei counsels.
There is no secret sauce either, just the basic sound economic principles that are the known roots of prosperity. We don’t need more study at this point, just the steely determination to do the right thing.
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.
Congressman David Schweikert (R-AZ-01) offered his fellow Congress members a gift in his weekly speech on Thursday. The former Arizona State Treasurer and nation’s de facto accountant presented solutions to the problems “that directly contribute to rising costs and decreasing wages in America.” In a press release last week, Schweikert shared video of his speech in which he points out the Consumer Price Index (CPI) for November reflected a 2.7 percent price increase from November of last year, indicating continuing inflation while wages continue to stagnate.
The Arizona Republican stressed the need for Congress to pursue a modernized immigration approach based on talent and merit in 2025, which promotes both productivity and wage growth while simultaneously offsetting declining birth rates and population decline.
Schweikert explained, “Here’s the reality: if the president is looking at you in the camera, and telling you [we have] the best economy ever—that’s not factual—but why don’t you feel it? It’s because much of America is poorer today than the day President Biden took office. If you live in the Phoenix-Scottsdale area—my home—if you don’t make 27 percent more today than the day President Biden took office, you are poorer.
Having someone telling you, ‘Oh, the economy is great,’ and yet, you’re having trouble paying for things… The reason we made this board, functionally, for you to maintain your purchasing power. If you are an average American in my district, these numbers are substantially higher because I am from a district with some of the highest inflation in America. If you are not making $1,115 more a month—because that’s what you have to be [making] from four years ago—your purchasing power… you’re poorer.
And I think that’s the reason that voters turned and said, ‘Okay, I see these Democrats running lots of ads saying crazy things,’ but yet, it turns out the voters are actually really smart. They would look at their checking account. They’d look at the cost of their kids’ clothes. They’d look at the grocery store and try to figure out why in the last week of the month they were losing their minds under stress.”
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The congressman stressed the incoherence of current immigration policy, which invites foreign nationals into the U.S., educates them in our institutions, and then ships them back to their home countries rather than encouraging skilled legal immigrants to become citizens. In the release, Schweikert notes, “When wages go up, we actually take in more tax receipts and then begins the cascade event of changing society and the economy for the future and the better.”
Regarding reforming the tax code to favor research and development and immigration laws to favor talent-based immigration, he posited, “One of our economists is trying to model what would happen if you said we’re going to do expensing of research and development because we know that pops economic growth. But if you also did talent-based immigration at the same time, you may get a multiplier effect. This is thinking like an economist. This is what we have to do to get ourselves out of this hole.”
America’s friends of limited government have had a rough go lately. Government bureaucrats and spenders of all stripes have been living it up.
Since 2001, the last time the federal budget was balanced, federal revenues have shown healthy growth of 3.9% annually, while inflation averaged only 2.5%. These figures would normally signify a sound, sustainable economy. But spending has grown at a rate of 5.5%, so instead we have a destabilizing gross federal debt of $36 trillion.
The response of the Biden/Harris administration to this looming catastrophe was to double down on spending. In an era of relative peace and prosperity, they kept mindlessly passing out money to win political points.
The hope now is that the Trump/Vance administration can reverse this madness. If so, the Department of Education (DOE) would be a good place to start. It is a prototype bureaucracy that has grown and prospered despite a complete lack of mission success.
The DOE was created in the 70s, ostensibly to improve the chronically ailing achievement scores in government schools. But in spite of the hundreds of billions spent, it has totally failed. Instead, it has provided steady employment for thousands of education bureaucrats who administer federal grants and programs, and write jargon-laden academic papers, yet have made no discernible difference in the quality of American education.
Remember Goals 2000, Every Student Succeeds, or No Child Left Behind? What about the Office of Safe and Healthy Students, the Education Facilities Clearinghouse, or offices dedicated to American-Asians, Native Hawaiians, American Indians, Hispanics, African-Americans, and other hyphenated groups singled out for special treatment? Of course you don’t, unless you are one of the lucky recipients of their largess.
But DOE has been worse than useless. It provides a platform for the teachers’ unions, by far the most influential protector of the status quo and obstruction to school choice. The damaging COVID shutdown was the latest blow to union-run public schools delivered by the DOE/unions dynamic duo.
Most private schools and charters, with access to the same medical information, kept their schools mostly open. Their students didn’t suffer the crippling learning loss that the unfortunate wards of the DOE did.
Ronald Reagan was the first of many leaders to advocate for the DOE’s elimination. But like bureaucracies everywhere, DOE is dedicated above all else to its own preservation, which is the one goal in which it has succeeded. It won’t be easy, but returning education policy to the states would be a great service to future generations of students.
The Department of Housing and Urban Development (HUD) has a similar failed history. When it was created in 1964, the U.S. homeownership rate was 64%. After six decades of HUD stewardship, the homeownership rate is still 64%.
It’s not like they haven’t tried. HUD’s mortgage companies – Ginnie Mae, Freddie Mac, and Fannie Mae manage multiple housing programs with federal finance agencies, all with the goal of controlling costs and boosting home ownership.
Yet under HUD’s “leadership,” home prices have far outstripped inflation. When HUD was created in 1967, the average home price was $22,000, about three times the average family income. Today the average home costs $500,000, seven times income. Meanwhile, European households without a comparable bureaucracy average 69% home ownership.
HUD has spent about $4 trillion since its inception with little to show for it. The housing market would function at least as well if the government simply got out of the way.
As these and other bureaucracies have grown and prospered, we have developed a very centralized form of government. In the land of the free, we have grown comfortable sending our tax money to Washington for faceless bureaucrats to return to us, always with strings attached.
We get the healthcare, the education, the roads and other goodies that government decrees. Government buys or subsidizes everything from unpopular electric cars and trains, state and local government public safety departments, “climate initiatives,” and much more.
Reforming an entrenched bureaucracy, much less eliminating it, is extraordinarily difficult. Yet the present could be a rare opportunity to repair this destruction to our way of life. We must be fearless and strategic in reducing government excess and providing a successful economic future for our descendants.
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.
Hard to believe it was just four years ago that President Joe Biden was elected with a promise to unite the country. After the misery of COVID-19 deaths and lockdowns and the riots in the streets of major cities, Americans wanted to be united by a unifying national purpose.
Alas, it never happened. Instead, Biden and his leftist allies were drunk with power and swerved the Democratic Party even further to the left. This alienated half the country, with a ruinous and unpopular progressive agenda on every issue, from running up massive debts to rampant inflation to transgenderism to electric vehicle mandates.
The country was only further torn asunder.
Can President-elect Donald Trump learn from these blunders and be the president who unifies the country by embracing traditional American ideals? The Make America Great Again agenda has some rough edges for sure, but if presented right, led by a message of hope, not malice, Trump can deliver an idealistic policy that the vast majority of Americans can embrace.
The way to do this is for Trump, as we approach our 250th birthday, to strike up the theme of a New American Patriotism. This should be a red-white-and-blue message centered around a renewed appreciation and celebration of American virtue and greatness. What better way to pull the country together? It should be an extension of the Reagan message of America being a “shining city on a hill” and a “beacon of freedom” for the rest of the world.
Which we are.
For at least a generation and maybe two, our schools and our universities have denigrated America’s moral standing. We have been lectured that we should be ashamed of our nation’s past, not proud of our founding and our achievements of spreading freedom and free enterprise across the planet.
The hard left magnifies America’s failures — particularly slavery and segregation — not the magnitude of our successes and our virtue. Foreigners who visit the United States often can’t believe the extent to which our media, entertainment industry and intellectual class obsess over our moral failings.
Biden was particularly guilty of this, when he falsely accused the United States of being a systemically racist country.
Wrong, Joe.
A strong case can be made that America is today the world’s greatest and perhaps only multiracial success story. The melting pot isn’t just a history-book fantasy. It is real. The rapid increase in interracial and intercultural marriages is making racial distinctions almost obsolete. The rapid rise in incomes of Asians, Hispanics and, to a lesser extent, Blacks should be celebrated.
Recent polling suggests that our citizens do appreciate American greatness. The only group that doesn’t is the ideologically isolated cultural and “highly educated” elite. The vast majority of Americans of every race and income category believe America is “the greatest country on Earth.” But many white liberal elites reject this notion.
Another example: White conservatives and Hispanics soundly reject the idea that America is systemically racist. According to Pew Research Center, “about six-in-ten Black adults say racism” is a problem in America today. But it is telling that many white liberals also believe this.
Is there still racism in America? Of course, yes. But it is not “systemic,” and the nation is becoming less racially polarized with every passing year.
America’s inventiveness, our innovation and our technological prowess, which propelled the world into the modern age and helped reduce poverty rates by 90%, are somehow sinister. Damn those fiends Thomas Edison and Henry Ford.
Fortunately, these are views of a class of modern-day intellectuals who never produced anything but instead sow the seeds of miscontent and division. They certainly have the right to hold these blame-America-first ideals, but we don’t have to allow them in our classrooms to pollute the minds of our kids.
This is an extension of the Reagan metaphor of America as a “shining city on a hill” and a “beacon of freedom” for all the world. It’s truer today than ever before, and Trumpnomics will make it all the more true.
Stephen Moore is a contributor to The Daily Caller News Foundation and a visiting fellow at the Heritage Foundation. His new book, coauthored with Arthur Laffer, is “The Trump Economic Miracle.”
Thanksgiving dinner will cost less than it did last year, but it will still be harder on your wallet than before President Joe Biden took office.
Per the Farm Bureau’s annual analysis of Thanksgiving dinner staple costs, the price reduction of nearly five percent from last year is “moderate” and not near enough to undo the “dramatic increase” that occurred two years ago.
A Thanksgiving meal still costs 20 percent more than it did in 2019: about $58 for a feast for 10 this year. Last year, the same meal size cost about $61, and in 2022, it cost about $64.
This annual Thanksgiving dinner survey relies on shoppers across 50 states and Puerto Rico to survey their local grocery store’s prices for classic feast items: turkey, stuffing, sweet potatoes, dinner rolls, peas, cranberries, celery, carrots, pumpkin pie ingredients, whipping cream, and milk.
The “moderate” price reduction only occurred with some of these classic holiday foods — others rose in price. Costs were lower for turkey, sweet potatoes, peas, carrots and celery, pumpkin pie mix, pie crusts, and milk, but costs were higher for dinner rolls, cranberries, whipping cream, and stuffing.
The reason for prices of certain items going up while others have gone down has to do with the type of item. Increases occurred mainly in processed products due to nonfood inflation and labor shortages driving up costs for partners across the food supply chain. An exception occurred for fresh cranberries, but the 12 percent price increase is considered a stabilization of pricing after an 18 percent decline from 2022 to 2023. The Farm Bureau noted that, even with the price increase and adjusting for inflation, fresh cranberries have their lowest cost since 1987.
The average costs are as follows: $25.67 for a 16-pound turkey, $2.35 for 12 ounces of fresh cranberries, $2.93 for three pounds of sweet potatoes, 84 cents for half-pound of carrots and celery, $1.73 for 16 ounces of green peas, $3.40 for two nine-inch pie shells, $4.08 for 14 ounces of cube stuffing, $4.16 for one pack of dinner rolls, $4.15 for 30 ounces of pumpkin pie mix, $3.21 for one gallon of whole milk, and $1.81 for one-half pint of whipping cream.
The Farm Bureau also reported significant cost disparities based on region. Those in the Western states face at least 14 percent higher costs for a Thanksgiving dinner for 10, or $67. Comparatively, those in the Southern states have the lowest cost: $56 for a party of 10. The Northeastern states will have an average cost of $57, and the Midwestern states will have an average cost of nearly $59.
Those price disparities grow much more when adding less-traditional Thanksgiving favorites: ham, Russet potatoes, and green beans. Southerners, Northeasterners, and Midwesterners would only pay anywhere from $81 to $83 to add those favorites to their dinners. However, Westerners would have to pay over $93 for the same spread.
Farmers take the biggest brunt of inflation, experiencing lower and more volatile prices. The USDA projects that national net farm income will fall by $6.5 billion this year.
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