Tag Archives: taxes

Shocking Disclosure: I LOOKED AT THE U.S. BUDGET!

27 Sep

By Lanny Morgnanesi

I had an hour to kill, and I did something peculiar with that precious time.

 I went online and found President Trump’s proposed federal budget for fiscal year 2027. My first reaction was negative, since the fiscal year begins Oct. 1 and the budget would not be approved by Oct. 1. There was disappointment and confusion. Nevertheless, I moved on.

Looking closer, I expected a cold, impersonal grouping of numbers on a spreadsheet and perhaps a pie chart or two. I expected a complete list of expenditures, a complete list of revenue sources, and estimates of what our growing deficit will be. At the end of the 92-page document there are indeed a few incomplete summary tables, but overall, this was a text document, and hardly cold and impersonal. Rather, it was political, with constant and consistent swipes at liberal programs and the policies of former President Joseph Biden. Nasty little comments throughout.

This particular budget deals mainly with discretionary spending, but not mandatory spending like Social Security and Medicare. And in addition to showing incomplete expenses, there are no revenue figures. No revenue numbers at all. This means readers of the budget do not know where the money is coming from, how much is coming in, if it will be enough to cover expenses, and how much it will add to our $40 trillion deficit.

Before looking at some of the numbers, let’s first look at some of the politics.

Russell T. Vought, director of the Office of Management and Budget, says in the message to Congress that begins the document, “When President Trump took office, the Nation was facing a financial catastrophe under the failed leadership of the Biden Administration. Under the fiscal status quo, the deficit was exploding and Federal spending was being wasted on futile, ineffective programs.  In just one year, the Trump Administration has made historic progress on righting our fiscal ship—the speed and scope of which have not been seen in Washington for many years.”

Then we get into a discussion of programs and their funding.

One thing you can’t help notice is the slamming of environment/climate change spending, which this budget refers to as the “Green New Scam.” That term is mentioned 21 times in the document. Another noticeable touch is there is no Department of Defense, only the Department of War.

The actual budget work begins with the Department of Agriculture. An interesting passage is this: “The Budget significantly reduces formula grants that act as pre-determined earmarks for university pet projects. USDA research will instead be competitively awarded to projects in the national interest, as opposed to the woke radical left projects these grants previously funded.”

The preface to the Department of Education says: “The Budget puts the Department of Education (ED), which has failed the Nation’s children, teachers, and families, on a path to elimination. Nationally, approximately 70 percent of eighth graders are below proficient

in reading and math. These abysmal results demonstrate that Federal control of education is not working.”

The Budget eliminates the Minority Business Development Agency, which the Trump budget says “promotes certain activities that violate the Civil Rights Act of 1964. In 2024, a U.S. District Court found MBDA’s presumption of ‘social disadvantage based on race or ethnicity’ in its funding decisions to be unconstitutional. Divisive and discriminatory diversity, equity, and inclusion (DEI) practices are the core mission of MBDA, which is why the Budget eliminates the Agency.”

Under the Department of Commerce we learn, “At the end of the Biden Administration, HUD reported that street homelessness increased 20 percent since 2020, hitting the highest level ever recorded despite an over 50-percent increase in funding … and the Congress providing the highest levels of funding ever devoted to homelessness programs in 2024.”

The budget then goes on to cut $393 million from homeless assistance programs.

Here are other winners and losers:

War — up 43.7 percent

Agriculture — down 19 percent

Environmental Protection – down 52.4 percent

Justice – up 13 percent

Health and Human Services – down 12.2 percent

Nuclear Security – up 12.4 percent

National Science – down 54.7 percent

Small Business – down 67.2 percent

Veteran Affairs – up 8.7 percent

Labor – down 25.9 percent

NASA – down 23 percent

When writing any budget, certain assumptions must be made. The Trump budget is written with some very optimistic assumptions that, if proven wrong, will mess up the whole budget. For example, Trump’s budget expects growth, or GDP, to be roughly 3 percent for the long term. The Congressional Budget Office and the Federal Reserve put that figure at around 2 percent.

An even more critical figure is the amount of interest the government will pay on 10-year treasury notes, which are loans to our government for taxes we don’t want to pay. The interest we pay now on our $40 trillion debt is $1 trillion a year, more than we currently spend on our military. Trump thinks the interest rates will stay at 3.3 percent until at least 2036. Right now, the rate on 10-year notes is 5.1 percent. If anything can blow up the budget, it is higher interest on our loans.

My hour of free time had almost ended, so I put away the budget. I spent a couple more minutes, however, looking for Congress’ version of the budget, assuming it might be more detailed. I couldn’t find one. Quickly then, I looked at the U.S. Constitution to see what it says about Congress and the budget. Although Congress clearly oversees spending and taxation, there is no constitutional edict requiring it to prepare a budget.

My hour was up, and so I went out to cut my grass, trying to be a good steward of both my property and my neighborhood, even if those with much larger responsibilities have chosen to ignore theirs.

As its old enemy grows weak and it grows strong, China hasn’t forgotten World War II

23 Aug

Almost 11 years have passed and the war in Afghanistan is still a war. It has helped drain the treasury of a nation that doesn’t want to pay taxes.

An even bigger threat to that treasury and to global peace is occurring thousands of miles away in the Pacific. Its roots are deep, dating at least to 1937, when Japan invaded China.

The Chinese of today look at Americans and wonder how we can be friends with the Germans and the Japanese. We’ve forgotten World War II. They haven’t. Their country was occupied. Ours was not.

The hate never dissipated.

Around 1985, Chinese consumers were getting their first chances to buy televisions. Many were imported from Japan. Many didn’t work right. True or not, the perception was that Japan was dumping its faulty products on China. As the TVs failed, anger rose, then raged. Demonstrations were held to criticize the government for allowing this to happen and for being a party to this loss of face.

The protests continue.

E-mail has been circulating all over China calling for the boycott of Japanese products. One complaint in the e-mail is that the bosses of Japanese companies in China treat their Chinese employees like dogs. Beneath that remains the revulsion of doing business with a nation that murdered millions of Chinese and committed vicious, wide-scale atrocities that included massive gang rapes and burying people alive.

Americans don’t realize it, but almost 90 percent of Japan’s fighting forces in World War II were in China, not the islands we fought over.

While powerful back then, the Japanese of today are struggling to recover from a lengthy economic malaise.  As they do, they watch China grow wealthy and strong. Out of frustration, a bunch of them jumped in boats last weekend and landed on an Island that China claims. They planted Japanese flags.

This lit a fuse back in China, and several thousand took to the streets in protest.

All very interesting, and right now harmless. If, however, these skirmishes escalates and Vietnam, the Philippines, Indonesia and Taiwan also feel threatened, the U.S. could be lured in.

Anticipating the future, our presence in the Pacific already has grown. If the events of last week continue, it is likely to grow further.

Will there be a dialogue or will it just happen? In such a case, Americans will have to ask themselves: Is this our role, and are we willing to pay for it?

 

I think debate is needed now, while it is only pleasure craft and civilians taking over disputed islands, while decisions on budgets and taxes are still pending, and while national lunacy is still treatable.

This one could make Afghanistan look like a street fight.

Lanny Morgnanesi

Unlike the U.S., the Danes are blissful, successful and highly taxed

18 Jul

There’s a happy little country in Europe that is so successful, foreigners pay to put money in its banks.

That’s called negative interest. Denmark, population 5.5 million, asks for it and gets it. Mounds and mounds of Euros from the troubled European nations are flowing into Denmark as a safe haven. According to Bloomberg Businessweek, the negative interest is low, with two-year debt yielding between minus .05 percent and minus .08 percent, but it shows the strength of that economy.

Unlike the U.S., Denmark has a positive trade balance, relatively low government debt and an unemployment rate of about 6 percent. (compared to about 9 in the U.S.) The Danes are said to be some of the most contented people in the world.

Oddly, or perhaps not, Denmark has the highest rate of taxes in the world.

Isn’t that ironic?

We in the United States are, for the most part, miserable and worried about our jobs, the economy and taxes. Our total taxes, according to the Organization for Economic Co-operation and Development, are 24 percent of GDP. In Denmark, people are completely satisfied with paying taxes equal to 48 percent of GDP.

“We have a luxury problem,” said Jacob Graven, chief economist at Denmark’s fourth largest bank.

Sometimes, solutions to seemingly unshakable problems can be found in the most unlikely, 180-degree alternatives. To often, however, the ether of the American culture has convinced us they are off-limits, extremely dangerous and will erode and ultimately destroy our way of life.

Why are we Americans, known for innovation, so averse to opening our minds? Who is responsible for closing them, and how did they manage to do such a great job of it?