Author Archives: Tom Mullen

Which Presidents Increased Spending the Fastest?

“Can you believe this spending with a REPUBLICAN in the White House????”

I’ve heard it my entire adult life, starting during the Reagan years. I’m not sure how many times Republicans have to increase spending twice as fast as their Democratic predecessors before people get used to the idea that this is what Republican presidents do, regardless of which party controls Congress.

This shouldn’t be a surprise. The Republican Party was born out of the ashes of the Whigs, whose stated goal was to expand the range of things the federal government spent money on. Before the Civil War, most roads were privately owned. Not just privately built; privately owned. Taxpayers didn’t contribute a cent towards them.

Not only did the Republican Party Sovietize the road system, they did the same with railroads and all sorts of other areas of life. Before FDR, it was Republicans who established most new federal departments.

Today, the government has Sovietized the distribution of Covid-19 vaccines and other treatments, a precedent established under the last Republican president.

When you consider the actual records of Republican presidents from Lincoln through Trump, it turns out that Harding and Coolidge were the real “RINOs.”

In the post-WWII era, spending almost always goes up (not counting the obvious decrease right after the war – which led to an economic boom, btw). But I decided to take a look at how fast it went up during the various presidential administrations starting with JFK/LBJ. I used the following methodology:

Measure the increase in yearly federal spending for each president as a percentage of the spending in the last year of his predecessor. For example, spending was $590 billion in the last year of the Carter Administration. It was $1.06 trillion in the last year of the Reagan administration, an increase of $473.4 billion or 80.1%. That comes in at just over 10% per year on average.

You’ll never guess who grew spending at the slowest rate since 1951. Certainly not the Gipper. Nor was it either Bush. No, as a percentage of spending during his predecessor’s last year in office, the president who grew the budget at the slowest rate was Barack Obama.

I broke it all down on Episode 85 of Tom Mullen Talks Freedom. I provide documentation of the outlays and receipts on the show notes page. A summary table is provide below.

Source: https://www.whitehouse.gov/omb/budget/historical-tables/

A few notes:

All spending increases are aggregated for the full term of the presidency and then averaged. Example: to calculate President Obama’s spending increases, 2008 spending is subtracted from the spending during the last year of his presidency (2016) to arrive at an increase of $870 billion over eight years. That total is divided by 2008 spending of $2.9 trillion to arrive at the 29.2% aggregate spending increase. Spending increases for each presidency is calculated in similar fashion.

I combined the presidencies of Kennedy/Johnson and Nixon/Ford as Kennedy and Nixon both served partial terms which were completed by members of their own parties.

Calculations are made for the Trump years 2017-2020 and 2017-2019.

Spending is not adjusted for inflation. All spending is in billions

Of course, regardless of how quickly or slowly it increases, federal spending is always destructive. It’s important to remember the government has failed at every major spending initiative it has undertaken in my lifetime, whether it is military or domestic policy. Vietnam, Iraq, Afghanistan, the Department of Education, the War on Drugs, Covid – it’s always all pain and no gain when it comes to the government. And the price just keeps going up.

Still, it is remarkable that spending goes up so much faster when a Republican is in the White House. The excuse is often made for Reagan that he had a Democratic Congress. But the Republicans controlled the Senate for 6 of Reagan’s 8 years in office, so that claim isn’t even true. The Democrats did have both houses of Congress during George H.W. Bush’s 4 years, but spending didn’t go up as fast during those years. Oops.

The other excuse often brought up in defense of profligate Republican presidents is that Congress “has the purse strings.” This is technically true, but when one looks at the spending proposed by the presidents in question and compares it to what Congress eventually appropriated, there is never much difference.

When an opposition party controls Congress, there is always some demagoguing over financially inconsequential components of the president’s proposal. See “funding Big Bird.” But in general, the executive branch proposes the spending and Congress rubber stamps it. And let’s not forget, no spending can occur without the president’s signature.

There is also some evidence that the combination of a Democratic president and Republican Congress may slow spending increases the most, but comparing spending increases during the first two years Presidents Clinton and Obama were in office (with Democratic Congresses) to spending increases over the remainder of their terms hardly provides conclusive proof.

The record does show that spending seems to grow relatively slowly with a Democratic president and a Republican Congress. And since gridlock in Washington is always good, to the extent we get it, for all sorts of non-fiscal reasons, let’s hope for a Republican landslide in this year’s midterms.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Why We Can’t Stand Prosperity

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“They can’t stand prosperity.” My father used to say it about his beloved Buffalo Bills during periods in the 1970s when they were competitive but couldn’t quite break into the ranks of the elite contenders. He was referring to the team’s maddening habit of ceasing to do what had previously been successful and “snatching defeat from the jaws of victory.”

What he said of the Bills applies to Americans in general.

There is no mystery to why the United States in a matter of decades grew from a few agrarian colonies to the richest, most powerful nation in history, surpassing competitors with over a millennium head start. It was capitalism. Period.

That’s what “the land of opportunity” meant, back when America was so styled. The opportunity was economic opportunity. The million-plus wave of immigrants who came here in the late 19^th and early 20^th centuries weren’t pursuing abstract notions of liberty. They were coming because there was an opportunity to make a materially better life for themselves and their families. That opportunity existed solely because America was economically freer – more “capitalist” – than the countries they left.

While America may be the most prominent example of capitalism’s success, it is by no means the only one. Indeed, history is replete with examples of economic freedom emerging, bringing with it unprecedented prosperity, and eventually being strangled by the re-emergence of state meddling.

Murray Rothbard documents this phenomenon occurring repeatedly throughout Europe in the pre-colonial period. More recently we’ve seen it in Asia, with the rise of the “Asian Tigers” in the 1990s, culminating in the rise of prosperity in China. During the same years, both Scandinavia and Canada dramatically cut taxes, regulations, and government spending to save their economies from becoming what Venezuela is today.

Throughout history, countries that freed their economies from mercantilist or socialist controls, even if not completely, have seen a dramatic reduction in poverty and rise in living standards. Nowhere is the opposite true.

Yet, in almost every case, including America, people just “can’t stand prosperity.” There is always and everywhere an instinct to kill the goose that laid the golden egg. Even among Americans today who by no means consider themselves socialist, there is an inherent resistance to allowing the conditions that has made the lives they lead possible.

Why?

Ludwig Von Mises wrote an entire book exploring the reasons for the “anti-capitalistic mentality.” I believe his insights were correct, especially in in terms of academia’s resentment towards the way free markets reward less educated, “vulgar” businessmen with more wealth than they enjoy themselves.

Walter Block has done research with fellow academics indicating there is an evolved preference in humans to prefer what he calls the “direct benevolence” associated with socialism over the “indirect benevolence” of the market economy.

Then, there is the plain, old human failing called, “envy.” The market economy results in the most prosperity for the most people, but it doesn’t distribute that prosperity equally. In fact, it doesn’t “distribute” prosperity at all. It allows each individual to keep the fruits of his labor and dispose of them as he sees fit. Some people are able to produce more than others and therefore accumulate more wealth.

There are some people who simply cannot abide this. Forget that no system has ever produced economic equality, least of all socialist systems, but the fact that no one even seems to be trying to correct this unjust inequality, in the envious person’s eyes, makes him resentful of the capitalist system that allowed the rich person to accumulate so much more than he.

While the above explanations certainly provide part of the answer, I do not believe they address the primary reason so many people are resistant to economic freedom. We use reason to overcome our passions and even our evolved instincts every day. But there is one instinct, one emotion that I believe transcends all the rest in motivating us to be suspicious of freedom.

Read the rest at Tom’s Patreon…

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

When Libertarians Won Landslides

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“If libertarianism works, why has there never been a libertarian country?” We hear it all the time from those whose historical perspective can be measured in weeks and months. We also know the answer to this question: “There has been: the United States of America.”

The American republic was libertarian to the core at its birth. The Declaration of Independence posited the existence of natural rights that preexist government, and that government is instituted for one purpose and one purpose only: “to secure these rights.”

Conservatives don’t believe this. Thomas Hobbes and Edmund Burke didn’t believe it. Nor did Russell Kirk. Republican politicians may claim to believe it to get votes, but they legislate as if they do not. True conservatives believe the purpose of government is to restrain man’s savage inclinations. What liberty is permitted is subordinate to that end.

Neither do liberals believe in this “American Creed.” Like their philosophical father, Jean-Jacques Rousseau, they believe the purpose of government is to restore some mythical “equality” that existed in nature before private property evolved and ruined everything. A just society, Rousseau and the liberals contend, requires, “the total alienation of each associate, together with all of his rights, to the entire community.”

Rights cannot be both inalienable and totally alienated. This worldview, like the conservative, is fundamentally opposed to the ideals of the Declaration.

In opposition to Hobbes, Rousseau, and their contemporary Edmund Burke, the founding generation were all “channeling” John Locke in 1776. Jefferson called Locke one of the three greatest men who ever lived on multiple occasions. Near the end of his life, he penned a resolution for the Board of Visitors of the University of Virginia to ensure it was Locke’s worldview that was taught to students.

When George Mason referred to himself as “a man of 1688,” he was referring to the Glorious Revolution and English Bill of Rights, both inspired by Locke’s principles.

So far from these founding principles had the republic strayed under Federalist rule, believed Thomas Jefferson, that he referred to his presidential election as “the revolution of 1800.” In his first inaugural, he called for a return to libertarian principles, describing “a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”

It was not the only time Jefferson asserted a libertarian role for government. In an 1816 letter to Francis Gilmer, he wrote, “No man has a natural right to commit aggression on the equal rights of another; and this is all from which the laws ought to restrain him.” In his Notes on Virginia, Jefferson wrote, “The legitimate powers of government extend to such acts only as are injurious to others. But it does me no injury for my neighbour to say there are twenty gods, or no god. It neither picks my pocket nor breaks my leg.”

These principles won election after election and led to the death of two opposing parties, the Federalists and the Whigs, in the first half of the 19^th century. The Federalist platform of high protectionist tariffs, government infrastructure projects, and a central bank was defeated over and over again until the new Republican Party found success by being on the right side – the libertarian side – of the slavery issue.

The new party was able to ride a coalition of former Whigs and abolitionists to victory in 1860 and dominance over American politics for the next half century. Unfortunately, the Republicans were on Alexander Hamilton’s side rather than Jefferson’s on most policy matters.

Still, it was not until the Progressive Era that Jefferson’s libertarian principle was officially repudiated by Woodrow Wilson, directly, and indirectly by the American electorate when they put Wilson in the White House. Wilson couldn’t have been clearer that it was a government limited to enforcing the libertarian non-aggression principle that had to go. He wrote in The New Freedom,

“We used to think in the old-fashioned days when life was very simple that all that government had to do was to put on a policeman’s uniform, and say, “Now don’t anybody hurt anybody else.” We used to say that the ideal of government was for every man to be left alone and not interfered with, except when he interfered with somebody else; and that the best government was the government that did as little governing as possible. That was the idea that obtained in Jefferson’s time. But we are coming now to realize that life is so complicated that we are not dealing with the old conditions, and that the law has to step in and create new conditions under which we may live, the conditions which will make it tolerable for us to live.”

It doesn’t get much plainer than that.

Jefferson had defined liberty as, “unobstructed action according to our will, within the limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’; because law is often but the tyrant’s will, and always so when it violates the right of an individual.”

For Wilson, it was something quite different. “Human freedom consists in perfect adjustment of human interests and human activities and human energies,” wrote Wilson. Of course, it was the government that was to do the “adjusting” necessary to achieve this “new freedom.”

The Great Reset is the logical conclusion of this reasoning.

The 20^th century was dominated by progressives attempting to do precisely what Woodrow Wilson said needed to be done: adjust mankind until they achieved their utopian vision of perfect equality and “social justice.” Today, those adjustments have reached the ridiculous extremes they were always destined to reach.

From time to time, the Republican Party, notably during the Reagan years, has opposed this vision with a watered-down libertarian message, always riddled with loopholes that allowed it to expand the government even faster than the liberals when elected. But notice it was the libertarian message that resonated. Ask rank and file Republicans what attracts them to conservatism, and they will often say things like “limited government” and “God-given rights.” George W. Bush won in 2000 promising “a humble foreign policy.’ But these are antithetical to true conservative principles.

The Libertarian Party has recently had a dramatic change in leadership. The Mises Caucus won every national committee seat it ran a candidate for, including the national chair. It won based on repudiating what it said was weak party leadership too concerned with not offending anyone and too focused on approval from the progressive establishment. The new leadership promises a bolder, purer libertarian message focused on the issues that truly affect the lives of most Americans.

To them I humbly offer this advice: Do not forget we are not conservatives or liberals or any combination of the two. We do not fall on any “spectrum” between right and left. We are not “socially liberal, but fiscally conservative.” We see the world in a completely different way, based on completely different principles than conservatives or liberals, Republicans or Democrats.

I use the words, “conservative” and “liberal” solely in a political sense. They have nothing to do with one’s personal preferences, although many try to blur the line between personal and political to skew the libertarian message one way or the other. These political terms refer exclusively to the role of government, or for hardcore Rothbardians, what can be responded to with force even in a stateless society. Our answer is simple: only a previous violation of property rights.

Americans are starving for a radical message. That explains both the Trump phenomenon and the success of Bernie Sanders and “the Squad.” But unlike these conservatives and liberals, libertarians can point to a clear record of success when their principles were implemented. It was called the Industrial Revolution and the meteoric rise in living standards for the majority of society.

Libertarians should resist pedantic distinctions between “classical liberal” and “libertarian” – they are one in the same, merely at different points in development. As the late, great Will Grigg once said, “I reserve the right to get smarter over time.” So do libertarians, who have learned over time to apply their principles more consistently than their proto-libertarian ancestors.

Do not be afraid to take “extremist” libertarian positions. Jefferson cut military spending by over 90 percent. Libertarians should run on doing likewise. That’s what allowed Jefferson and his party to eliminate all internal taxes. But it doesn’t end there.

All of the damage done during the progressive era must be undone. Repeal the New Deal root and branch. Close the federal Department of Education and then go to work on ending public schooling at the state and local levels. Legalize competing currencies for the dollar. And once sound money’s superiority to central bank larceny is clear to all, End the Fed.

Unlike fringe issues like “legalizing sex work,” however valid they might be from a libertarian perspective, these are the policies that can change the lives of every American citizen. They also have the potential to reawaken that yearning for liberty that Bastiat said, “makes the heart beat faster and shakes the world.” At the same time, they will be most viciously opposed by all the forces who benefit from an unfree world.

If you’re not being falsely labeled a racist, a bigot, a Russian operative, a fascist, or all of the above by the totalitarian establishment, you’re probably not being effective. Refuse to engage the enemy on its terms. Trust that there is an untapped yearning for freedom out there in those who see through these cheap, cartoonish tactics, especially now as the Regime is failing so spectacularly.

The 20^th century saw a reversal in the trend towards human freedom. The 21^st has so far been worse. We are at a crossroads. It is not hyperbole to say the choice is freedom or slavery. Let no one for a moment be confused as to which side we’re on.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Why are people so averse to blaming government for its obvious failures?

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“These are the times that try men’s souls,” wrote Thomas Paine in late 1776, when the newly independent American states were at war with the mightiest empire in the world and not doing terribly well. Seven more years of hardship lay ahead, during which even John Adams’ family would struggle to keep body and soul together during the lean years of the Revolutionary War. Abigail Adams sold pins, handkerchiefs, and other trade goods sent home by her husband to feed the family while he was away making history.

246 years later, things aren’t nearly so bleak for Americans…yet. But they do suffer from the worst inflation in decades, growing shortages of food and other items, and an impending economic “hurricane,” if JP Morgan Chase CEO Jamie Dimon is correct.

The difference is this hardship is completely self-inflicted and unnecessary. Americans don’t suffer deprivation now to preserve newly declared independence and found a republic that will go on to inspire the world. They suffer from policies their own government imposed upon them, starting with Covid lockdowns, that have done no good whatsoever while causing immense harm.

With Washington, D.C., it’s always all pain and no gain.

In April, 2020, I asked, rhetorically, “When the Coronavirus Shutdown is over, will anyone blame their governments for the economic devastation they caused?”

Read the rest at Tom’s Patreon…

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

QT by the Federal Reserve Starts This Month and It Could Get Ugly

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There are some people who think the Federal Reserve is irrelevant in today’s economy. Rather than exerting control, they argue, the Fed merely “chases” the market rate of interest, eternally behind the curve and not having near the effect someone who, say, wrote a book called, It’s the Fed, Stupid might believe.

John Tamny is an example. He agrees with us free market types on most things, but not the Fed. He says the Fed is “a rate follower, not a rate setter.”

I don’t agree on the whole, but there are examples where the Fed is chasing the market, rather than making it, in terms of its interest rate policy. The recent explosion in 10-year Treasury bond yields, well beyond the Fed’s target fed funds rate, and the Fed’s subsequent interest rate increases, is an example.

But since 2008, interest rate policy and control of the money supply are not as intimately linked as they once were, for reasons I explain in today’s episode of Tom Mullen Talks Freedom. For that and other reasons I discuss, we ain’t seen nuthin’ yet in terms of the effects Fed policy is going to have on financial markets and the economy.

Of course, all the Fed is doing is trying to fight the price inflation it caused itself with previous monetary inflation. And if lowering prices was the only effect removing dollars from circulation was going to have, there would be no need to worry about it (the same is true for adding dollars – they could just give us all a million dollars a year!).

The Fed has finally found itself between that rock and hard place Austrian economists predicted they would reach, where there is no good option. Remove money from the economy aggressively and risk dramatic deflation of financial markets and economic malaise or don’t remove money and allow inflation to persist.

Don’t forget to check out my Patreon . There are exclusive articles and transcripts of all podcasts there. VIP members also get access to all my online courses. The first is already available and more are coming soon!

Be among the first to come on board at patreon.com/tommullentalksfreedom!

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

SCOTUS Proves Once Again It Is the Wrong Body to Determine Federal Powers

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A leaked draft of an opinion written by Justice Alito of the U.S. Supreme Court suggests the Court is prepared to strike down the 1973 Roe v. Wade decision that found unconstitutional state laws prohibiting abortion. The ruling would also strike down modifications made in the Planned Parenthood of Southeastern Pa. vs. Casey decision of 1992.

If the final decision is substantively the same as the draft, it will continue a process of “re-federalization” that has been gaining momentum since the 2016 election cycle. Many viewed the Donald Trump presidency as divisive, but Trump’s election was more revelatory of existing divisions than divisive itself.

Long before Trump declared his candidacy, many states had already effectively nullified federal marijuana regulations and immigration laws. Talk of Texas seceding from the union had resumed during the Obama administration; similar rumblings in California began soon after Trump was inaugurated.

What has inspired the most rancor on both sides are cultural issues: abortion, what is taught in schools, who is allowed to get married, who is and is not required to bake the wedding cake, and who is and is not allowed to cross the borders, immigration being both a cultural issue and an economic one.

There is also an underlying dissatisfaction with economic outcomes, which are most affected by the monetary system and the New Deal regulatory structure, although neither conservatives nor liberals seem anxious to address either.

None of the federal powers above, including regulating immigration, are expressly delegated to the federal government in the Constitution. They were all “discovered” by the Supreme Court using reasoning arguably as dubious as that employed in Roe v. Wade.

The whole idea of judicial review for constitutionality is a suspect one. The reason for having a written Constitution in the first place is to ensure there is no confusion about what powers the federal government has been delegated and not delegated. It should not be necessary to hold a legal proceeding, followed by a lengthy written decision by the “finest legal minds in the land” to determine whether or not a given power is delegated to the federal government in a five-page document.

If there is any doubt at all, an amendment should be offered. That is the only honest way to obtain consent of the governed for a new power. Acquiring power through the court system is a transparent attempt to do so without the consent of the governed, with knowledge aforethought that you are imposing authority that would not be granted voluntarily.

Article V of the Constitution provides the means by which consent of the governed is obtained by the federal government. It is not obtained through federal elections. They merely determine who exercises power, not what power is exercised.

Neither are amendments ratified by a simple majority of United States citizens. They are ratified by a supermajority of the states, who are the parties to the Constitution. They formed a federal government, not a national one, for the express and stated purpose of preventing a simple majority of all U.S. citizens from ruling over a unitary nation.

This is clear from notes on the constitutional convention taken by James Madison and Robert Yates. Forming a national government with the states as mere subdivisions was thoroughly discussed and rejected. The union would be a federation of states with limited powers delegated to the federal government and all others retained by the states or the people.

This is more than just academic pedantry. The United States is a boiling cauldron of political hatred about to boil over. Once the abortion decision is official, we can expect a repeat of the rioting we saw in 2020 over George Floyd. We saw even the typically orderly right give into similar behavior last January. There is no reason to believe things will simmer down anytime soon.

Article V provides a way out of this. Offering amendments to grant the federal government those powers it has illegitimately acquired in the past through the courts will result in one of three outcomes for each disputed issue: 1) the amendment will be ratified as offered, 2) the amendment will be revised through negotiation into something a supermajority of states accept and then ratified, or 3) the amendment will fail completely, making clear to all this is a power that must be reserved to the states.

Perfection is unattainable in any political process. But any of the three outcomes above would provide a pressure valve on the issue in question. Amendments should be offered for all powers obtained by the federal government through the courts in the past, no matter how long ago the acquisition occurred: regulation of abortion, immigration, healthcare, education, and marriage included.

While we’re at it, why not settle the very first constitutional crisis the way it should have been settled: an amendment granting the government the power to incorporate a bank.

Given the exponential growth of the federal government over the past one hundred years, dozens of amendments should have been offered during that period. Yet, since 1933 only six have been ratified, one of those being what would have been the Second Amendment if ratified when originally proposed in 1789.

Both conservatives and liberals are reluctant to pursue the constitutional amendment process because it is difficult by design. But there are only two ways to exercise power: with the consent of the governed and without it. Americans have chosen the latter over the past century, taking the relatively easy, dishonest route to power through the court system. That has led us to where we are now: at each other’s throats.

We would be wise to retrace our steps and determine the federal government’s powers legitimately before we have a real insurrection on our hands.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

True federalism would have prevented Covid lockdowns

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In one sense, the Covid-19 era revitalized American federalism. While every U.S. state except South Dakota at first followed the advice of the federal government’s various national public health agencies and their spokesman, Anthony Fauci, M.D., eventually more and more diversity began to emerge in the way individual states responded to the virus.

In September of 2020, after televising a roundtable of non-government scientists from Harvard and Stanford, Governor Ron DeSantis reopened Florida completely and banned local jurisdictions from fining people for noncompliance with mask mandates.

Observing the political gains DeSantis enjoyed from lifting restrictions and the absence of disaster predicted by all opposed to DeSantis politically, Iowa’s governor lifted all restrictions in February 2021, followed closely by Gov. Abbot of Texas the following month.

While states with Republican governors trumpet their states as “free states” due to generally less severe and shorter-lived lockdowns, and proponents of decentralization from across the political spectrum point to this as a triumph of local government, federalism completely failed in the most important respect. Every United States citizen, regardless of the decisions of their state and local elected leaders, is being forced to pay for lockdowns equally.

Although Covid relief was federally funded, it wasn’t paid for with higher taxes. It would have been impossible to collect more taxes from a society producing considerably less wealth. Instead, the money was created by the Federal Reserve and handed out through programs created by the CARES Act and subsequent legislation.

We are feeling the effects of that money creation combined with decreased production now. Although his Republican critics would like to blame President Biden for rising prices today (and he has certainly contributed to them, especially energy prices), the majority of the spending authorized and new money created occurred while Trump was still in office.

M1 showed the supply of dollars at $4 trillion in February 2020. It was $16 trillion by May 2020 and $18 trillion when Trump left office in January 2021. It was just over $20 trillion as of January 2022.

President Biden, on the other hand, has largely failed to get most of the spending he wanted beyond an early Covid relief bill similar in size to the CARES Act. However, due to the mechanics of the way money gets spent by the federal government after it is appropriated by Congress, even much of the money appropriated in 2020 wasn’t spent until 2021.

That and the general lag between new money creation and the resulting rise in consumer prices is why price inflation only began in earnest in 2021. But this is not to lay the blame at Trump’s or Biden’s doorstep. Rather, it was the very bipartisan departure from reality, including by most the American public, that a large percentage of the economy could be turned off while people went on consuming as they did before.

Many otherwise “fiscally conservative” people threw up their hands and justified Covid bailouts on the grounds that those ordered to close their businesses or stay home from their jobs weren’t “at fault,” and therefore were entitled to bailouts.

It doesn’t matter who was at fault for lockdowns. Goods that are not produced cannot be consumed. One cannot consume more than one produces unless someone else provides the difference. Scarcity does not make exceptions for assignment of blame, political theories, or feelings. Even if lockdowns significantly reduced Covid deaths, which they didn’t, one still had to face the reality that producing enough to survive takes priority over avoiding the virus.

The truly “federalist” approach to Covid-19 would have been to allow each state to decide and pay for the policies it chose to implement in response to the virus. Politicians spoke in absolutes, saying lockdowns were “necessary.” Well, producing enough to survive was more necessary. This would have been true even if the virus had turned out to be as deadly as it was originally touted.

Had governors been forced to face reality and decide how to respond to lockdowns without external bailout money, there may not have been any lockdowns at all. If there were, they would have been fewer, of less severity, and of shorter duration.

This would not have made a bit of difference overall in the number of Covid deaths, as the retrospective comparisons of “open” vs. “locked down” states so clearly show.

Like TARP in 2008 and every other bailout, profits have been privatized and costs socialized. People who elected governors who took a more realistic approach to Covid and who themselves balanced the personal risk of contracting the disease more realistically with the responsibility of supporting themselves are paying the same cost in runaway inflation as those whose governors closed their economies completely and kept them closed for much longer periods of time.

Today, Americans are being asked to again support a departure from reality. The U.S. government, the most prolific invader of foreign nations in the past seventy years, has proclaimed Russia’s invasion of Ukraine beyond the pale and imposed drastic sanctions in response. President Biden has acknowledged this will have a cost to American citizens, although he has vastly understated the cost.

The president and others have tried to shift the blame for present economic pain onto Putin. This is dishonest for two reasons. One, it is not Putin’s invasion but the sanctions in response to the that will cause economic hardship, just as it wasn’t “Covid” but the government response to the virus that caused the economic fallout we’re experiencing now.

Most importantly, the economic consequences of Biden’s Russia sanctions have not even begun to be felt by American consumers. They are just now suffering the effects of Covid lockdowns. The Russia sanctions could have far more onerous economic consequences, especially if they result in a new world economic order where a significant portion of the global population no longer uses the U.S. dollar as its reserve currency. That is a reality Americans are not ready to face.

Regardless of whether Putin’s invasion of Ukraine was justified, America may not be able to afford the combined cost of Biden’s sanctions and the Covid lockdowns. Ignoring that reality may have fatal consequences for both America’s economy its political order.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

China is surpassing the U.S. economically because it is freer than it was; America is less free

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Outwardly, everyone condemns the Chinese government, run by the Chinese Communist Party (CCP). Their society is authoritarian and “anti-democratic” while in America, as the song goes, “at least I know I’m free.”

Yet, no one seems to believe freedom leads to greater economic prosperity or human happiness. Inherent in every political discussion about China is the idea that authoritarianism produces better results and the United States is handicapped by its devotion to freedom. Americans enviously note that when China’s central government decides to do something, they are not encumbered by adversarial processes inherent in the U.S. Constitution.

This is also the assumption underlying the trade wars. China has “taken advantage of” the United States by being more economically mercantilist while the United States has foolishly allowed its industry to migrate to China and other countries because of relatively freer trade policies.

That is demonstrably false. Manufacturing still comprises about the same percentage of real GDP as it has throughout the post-WWII period. The problem with American manufacturing isn’t the amount produced but what is produced. American manufacturing is far too skewed towards producing weapons and other items without utility, misdirected by a monetary system that allows resources to be directed towards unproductive ends.

The emergence of China as an economic power certainly provides the United States new competition, but that emergence is not a result of China’s authoritarianism. On the contrary, China’s economy has grown exponentially in the past thirty years because it is significantly less authoritarian, especially in the economic sphere, than it was previously.

Americans never seem to ask themselves why a country with four times the population didn’t have a much larger economy than the United States during the twentieth century. The answer is simple: communism. China had as authoritarian an economic system as has ever existed in human history. While they are by no means laissez faire now, they are far more “capitalist” in relative terms. This is the key to their success, not the authoritarianism that remains from the communist years.

The United States, on the other hand, is relatively less free than it was at almost any time in its history, with the exception perhaps of the 1930s and 40s. And its trajectory is towards more and more government intervention into the economy and life in general.

The United States became the most powerful economy in the world for the same reason the United Kingdom, comprised of two tiny islands with relatively small populations, was the most powerful before the United States. It had the freest markets. It was the most “capitalist,” for lack of a better single word.

The United Kingdom squandered its wealth trying to maintain a vast global empire that gave its government prestige but drained its wealth and led it to debauch its currency. Sound familiar? Empire may be made possible by capitalism, but it is not an inherent part of capitalism. Empire is anti-capitalist. Capitalism is about property rights and voluntary exchange. Empire demands taxes and misdirection of capital into production of arms and other imperial necessities that do not add to the happiness of the taxpayers.

Weapons, soldiers, and military infrastructure beyond what is needed for defense have no utility. Sooner or later, the productive part of the imperial economy can no longer afford to subsidize the unproductive part.

This has been the end of every empire in history. It is also the reason the USSR had a much more painful transition from communism to capitalism than China – it had an empire of other communist republics draining its already misdirected resources.

While the global standing army the United States maintains is a significant reason for its economic decline, it is not the only reason. In all areas of economic and social life, America has become less free with each passing year.

Americans have become accustomed to its government surveilling its phone calls, e-mails, and financial transactions. The New Deal regulatory structure, under which bureaucrats in executive branch agencies make most of the laws by fiat, rather than Congress in an adversarial process, continues to metastasize. Its entitlement programs, designed to cover the last few years of life, now demand the resources to cover decades of life beyond retirement.

The privilege of printing the world’s reserve currency has done the most damage to the dynamism of the American economy. All inflation leads to malinvestment, but the inflation made possible by the global dollar standard has led to bubbles that very well may comprise half of U.S. GDP.

Certainly, there are millions of people employed in the cartoonishly bureaucratic education and healthcare industries who are adding no value to consumers. As guaranteed student loans have redirected trillions towards the education industry, millions of administrative jobs have been added to the system that aren’t necessary to teach reading, writing, and arithmetic. Meanwhile, the education results continue to decline.

Healthcare is in much the same shape. That part of the industry on the cutting edge, where profits and losses are still available, which operates under the most capitalist circumstances, continues to produce miracles of innovation. But the rest, the heavily subsidized, increasingly bureaucratic part, is sclerotic and in decline.

In many ways, routine American medicine is still practiced the way it was in 1970. Why? Because it has no reason to improve. It’s on the dole, with half of all healthcare spending comprised of government spending. There is no reason to improve medical or business practices when your income is guaranteed by taxpayers. See the DMV.

Just ask yourself why you’re still asked to fill out multiple forms capturing your insurance information when the office already has it. In fact, they wouldn’t even give you the appointment until they not only got your insurance info but verified your eligibility with the insurer. But they still ask you to write it down on two different forms when you get to your appointment. Non-subsidized industries cannot afford inefficiencies like this.

What made America richer and more powerful in the past was being significantly freer than any other country in the world. And by “freer,” I do not mean more “democratic.” Democracy was not the key to American freedom; it was limited government. It was the fact that the vast majority of American economic and social life was not up for a vote. Rather, most decisions were left to the discretion of the private sector and the individual.

What made China destitute during the same period was its complete lack of freedom. There was nothing else keeping China from building the economy it has today. But since the late twentieth century, America has headed in one direction on the freedom scale and China in the other. It is not unreasonable to ask whether they haven’t now met at a point far lower than America’s freer past.

There is no reason for Americans to fear China eventually having a larger economy than the United States. That would be the natural result of having so much larger a population. But if America wants to regain its economic power in a post-dollar dominated world, it must stop imagining China’s success to be a product of its remaining authoritarianism and get back to what created America’s wealth in the first place: far more limited government, freer markets, and maximum individual liberty.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

A grass roots foreign policy

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Us Military: List Of Us Military Bases for United States Military Bases World Map – Printable Map

Four weeks ago, I predicted, “American taxpayers are going to be regaled with propaganda about the need to increase military spending in reaction to Putin’s invasion and accede to even more troops deployed overseas.”

Right on cue, Gen. Tod Wolters, U.S. European Command chief, did precisely that.

“I think what we need to do from a U.S. force perspective is look at what takes place in Europe following the completion of Ukraine-Russia scenario and examine the European contributions, and based off the breadth and depth of the European contributions, be prepared to adjust the U.S. contributions. And my suspicion is we’re going to still need more,” he said.

Following the Ukraine-Russia scenario? So, once the Ukraine-Russia war is over, in which zero American soldiers fought, American taxpayers should pay for even more soldiers deployed in Europe to…what? Not fight again?

This isn’t to say American troops should fight in the Ukraine-Russia war, even though it was started by the U.S. State Department. It’s an acknowledgement that they cannot fight in the Ukraine-Russia war, as Joe Biden has so far retained the mental capacity to realize.

The rationalization for this would be to deter Vladimir Putin from invading the territory of a NATO country in the future. But Putin is never going to do that for the same reason Biden is not allowing U.S. troops to be involved in Ukraine. Nuclear powers cannot go to war unless they are ready for the war to end with a nuclear exchange. Period.

Thus, as I argued at the beginning of this conflict, the conclusion to draw from the past four weeks is a dramatic cut in U.S. overseas deployments. Warehousing hundreds of thousands of troops overseas that will never be used for any legitimate purpose is simply a dead weight loss on the U.S. economy.

If Joe Biden insists Americans suffer food shortages in order to signal their virtue in futile sanctions on Russia for its supposedly “unprovoked” invasion of Ukraine, then they should respond to him by demanding the overseas military government jobs program – because that’s all it is at this point – be eliminated to help ease the pain.

But what can average Americans do about this? Congress will appropriate the funds for more military spending and, no matter whom they elect president, that president will continue to deploy troops overseas.

Well, for everyone who styles themselves “politically incorrect,” believing they are tougher than the “snowflakes” who can’t bear to hear hard truths, here is some truly politically incorrect talk.

Warning: Saying something half the country will applaud you for, whether it is the liberal or conservative half, is not “politically incorrect.” Telling a truth no one wants to hear is truly politically incorrect. If you don’t want to hear that, stop reading now.

Stop joining the military. Stop encouraging your children to join the military. Stop crowing to the world about how proud you are your children joined the military. We need the military cut drastically, now more than ever.

I can already hear the rationalizations. So, let me address the most common.

“I didn’t join the military to fight unconstitutional wars; I joined to defend the Constitution.” Sorry, this excuse doesn’t hold water. The U.S. government has been fighting unconstitutional wars for almost eighty years at this point. Its record during this century alone is enough that no reasonable person can possibly believe they will be deployed to defend the Constitution.

That’s especially true because the Constitution is not under threat from any foreign power. Not even if the military were cut in half. Not even if it were cut by two-thirds. Want proof? Russia’s military spending is one tenth that of the U.S. on an annual basis. Why is their constitution still intact?

No reasonable person can believe joining the military in 2022 will result in them being deployed to do anything other than more of what the U.S. military has been doing for our entire lives.

“But the military is already stretched to exhaustion.” Yes, this is true. The military is stretched to exhaustion because the government has it doing all sorts of things that harm rather than “serve” U.S. taxpayers. Take away the personnel and U.S. presidents won’t have that choice.

“If people stop joining the military, they will just start drafting soldiers.” Fine. Let’s get to that point and talk about civil disobedience then. Massive movements have formed around vaccine mandates, wrongful police shootings, and controversial public-school curriculums. Whatever one thinks about any of those causes individually, they all pale in comparison to mass murder of foreign populations that never attacked the United States.

I wrote a few days ago that Americans are not ready for the reality that will set in when much of the world ceases to use the U.S. dollar as the world’s reserve currency. There are plenty of painful corrections in the domestic economy that are inevitable – zombie jobs that but for government spending underwritten by monetary inflation wouldn’t exist.

Disbanding the worldwide standing army would be one of the least painful corrections to bear. Not only would the net economic loss be eliminated, but hundreds of thousands of military personnel serving no useful purpose overseas would be freed up to do productive work here at home.

It’s hard to blame an eighteen-year-old for joining the military, especially when, on one hand, the government has made it so economically attractive with perks like free college and, on the other, when all of society tells him or her it is a fine and noble pursuit.

America needs to get back to its founding attitude of suspicion of standing armies. John Adams sought political favor by trying to outmaneuver Congress in taking credit for disbanding the entire army. His successor Thomas Jefferson was re-elected in 1804 based on cutting taxes and paying down the national debt after cutting military spending (mostly the navy as the army was already gone) by over 90 percent.

Americans have derived no benefit from eighty years of foreign wars. So, while we’re facing reality, let’s knock off the reflexive, “Thank you for your service.” No American taxpayer has been “served” by any of these wars.

Counter to the government’s propaganda about “freedom not being free,” Americans have become poorer and less free because of the military mischief they have allowed their government to get them into.

Before resorting to eating bugs, as their elites suggest, Americans should take foreign policy into their own hands by ceasing to join the military, discouraging their children from doing so, and ceasing to perpetuate the falsehood that Americans are freer because of the wars its government has fought.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Peace in Ukraine will not end the economic world war declared by the Biden administration

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Equities markets are slightly up today while gold and oil are down as investors digest news of progress in peace talks between Ukraine and Russia. While a deal between the countries would most importantly end the bloodshed and, secondarily, ease the immediate economic pressure the war is causing, it would not end the economic war I wrote about last week.

That war was declared by the United States when it banished Russia from its SWIFT system, seized its FOREX assets, and demanded the whole world boycott Russian exports (something even many NATO allies were unable to do).

Russia’s first response was to announce it would only accept rubles in payment for its natural gas exports to “unfriendly countries.” Over the weekend, it made another move. It put the ruble back on the gold standard domestically, allowing its central bank to buy gold at a fixed price of 5,000 rubles per gram (approximately 155,550 per troy ounce).

This immediately strengthened the ruble against the U.S. dollar. On Friday, RUB/USD was over 102. As of this writing, it had dropped to just under 88.

As Tom Luongo explains, this effectively sets up an opportunity for Russia to sell oil, natural gas, and its myriad other natural resource exports at a discount for gold. This will eventually bring the ruble back to its pre-war value in USD of 75.

Washington obtusely seeks to prevent Russia from selling its gold while Russia has no plans to do so. It is buying gold at a discount based on the demand for its exports.

Even if a treaty is secured and the U.S. offers to readmit Russia to SWIFT, releases its frozen assets, and end the boycotts, it’s hard to imagine Russia accepting the offer. Why put itself in the same position again when it is holding all the cards as an exporter of vital resources with a positive trade balance?

Not only Russia but every country in the world is now on notice that any reserves it has in dollars could be rendered worthless at the whim of the U.S. government. This provides tremendous incentive for most of the world to find a store of wealth and medium of exchange other than the U.S. dollar.

Americans are not ready for the reality that will be imposed if the dollar loses its world reserve currency status.

This isn’t immediately apparent to them because they believe they have the world’s most productive economy, based on having the largest GDP. It is true that U.S. GDP priced in dollars was the largest in the world at approximately $22 trillion in 2021. China was second at $16 trillion.

The problem with GDP is it merely measures total money spent in the economy. It does not measure the value of things that were produced. Since value is subjective, it is a matter of how much an economy produces for which people would truly be willing to give up something of value in return. This willingness depends upon what is produced having what economists call “utility,” a product’s usefulness in fulfilling some purpose for the consumer, whether a need like food or a luxury like a fancy car.

A large percentage of what the U.S. economy produces has no real market value.

Rising prices are not the only negative consequence of monetary inflation. Inflation also misdirects capital towards nonproductive use. That is why at the end of a business cycle, when the economy crashes, there is high unemployment. All of the people misdirected into unprofitable enterprises must be let go and redirected towards productive work – towards producing products whose value to others exceeds their cost of production.

The U.S. dollar’s status as the world’s reserve currency has allowed its central bank to inflate the currency far beyond what it would be able to get away with otherwise. This has caused huge distortions in the U.S. economy. In other words, it has directed capital towards producing products whose value does not exceed their cost of production.

What value have Americans received in return for spending more on their military establishment than the next ten countries combined? How were they better off for the military spending 20 years and trillions of dollars in Afghanistan? How do they benefit from maintaining a global standing army that will never be used against a nuclear power, as was just confirmed after Russia invaded Ukraine?

What additional value have they received for paying the highest prices in the world for healthcare and education?

What these and other malinvestments have in common is they are not funded voluntarily. The military is 100 percent tax funded. Half of all healthcare spending is government spending. College education is largely underwritten by government-guaranteed loans, meaning taxpayers guarantee them whether they want to or not.

Even outside of government-funded enterprises, capital is misdirected towards nonprofitable use by monetary inflation. Houses and automobiles, for example, are bid up beyond their true market value because of the artificially low interest rates of the loans that make their inflated prices affordable.

Like taxation, monetary inflation transfers purchasing power involuntarily from holders of dollars to those receiving the loans. That means there is no market discipline acting upon the borrowers and lenders. No one was asked to voluntarily give up something of value to underwrite the loan. Therefore, capital is much more likely to be invested unprofitably.

Yes, all countries in the world have fiat currencies that they inflate, but no other country has been able to do it on the scale and with the impunity the U.S. has while enjoying reserve currency status. This has directed huge amounts of people and resources towards unproductive ends.

Foreigners have paid Americans to waste resources and collect salaries for non-value producing jobs in government, health care and education bureaucracies, finance, and other bubble industries by accepting American exports of dollars in return for imports of valuable products.

Removing this privilege will cause an enormous deflation of some economic sectors and the complete disappearance of others. Millions of people employed unproductively, as well as millions of others who sell to them, will be devastated. The result will be a sharp reduction in living standards for virtually all Americans outside of the very wealthiest strata.

While this cleansing of waste in the economy might be beneficial at some point in the future, it will be unimaginably painful for most Americans in the present. For a country already near a political boiling point, the economic reality on its way could blow the lid.

America is not ready.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?