Crowding Out: The Fed May Be Killing the Private Sector to Save the Government

Estimated Reading Time: 2 minutes

The Federal Reserve’s balance sheet reached its all-time high in May 2022. Since then, it was supposed to drop at a steady pace and shed three trillion US dollars by 2024. The normalization of monetary policy was built on the idea of a soft landing for the economy. However, the Fed may be killing the private sector to save the government.

Curbing inflation requires a significant reduction in the money supply and aggregate demand. However, if government deficit spending is left untouched, the entire burden of normalizing monetary policy will fall on families and businesses.

The current situation is the worst possible. The Fed’s balance sheet is not falling as fast as it should; government spending has not even been scratched, but the money supply is falling at the fastest pace since the 1930s, and rate hikes are hurting the productive economy while the government seems unaware of the need to reduce its bloated budget.

The first-quarter GDP figure is extremely concerning. Government spending showed yet another big rise at +4.7 percent, much higher than expected. However, consumption, at +3.7 percent annualized, was well below estimates and driven by a worrying new record in credit card debt. Even more concerning, gross private domestic investment fell by a massive 12.5 percent.

There is robust evidence of a negative trend in the real economy. Rising federal expenditure, more bureaucracy, higher taxes, and weaker activity in the part of the economy that drives growth and jobs.

Rate hikes have two direct negative effects on the economy if the government does not reduce its deficit spending spree. They mean higher taxes and a massive crowding out of available credit. The government deficit is always going to be financed, even if it is at higher rates, but this also means less credit for businesses and families. The crowding-out effect of the public sector over the productive economy means lower productivity growth, weaker investment, and declining real wages as the government keeps inflation above target by spending additional units of newly created currency, but the productive sectors find it harder and more expensive to find credit. Additionally, the government borrows at a much lower cost than even the most efficient and profitable businesses.

It is impossible to achieve a soft landing for the economy when the Federal Reserve ignores the signals of the banking system and the real economy. The first pillar of a true soft landing must be to preserve the real disposable income of workers and the job creation and investment capabilities of businesses.

When the government continues to increase spending, there is no signal of the mildest budgetary control, and the entire “landing” comes from the private sector, what we get is upside-down economics.

The Federal Reserve has stopped paying attention to monetary aggregates just as the money supply is contracting at an almost historic pace. Even worse, the money supply is contracting but federal deficit spending is untouched, and the debt ceiling was raised again.

The money supply is collapsing due to the inevitable credit crunch and the difficulties faced by consumers and businesses. It is impossible to grow with rising taxes, persistent inflation—a tax in itself—and carrying the entire burden of the normalization of monetary policy.

Fighting inflation without cutting government spending is like dieting without eliminating fattening foods.


This article was published by the Ludwig von Mises Institute and is reproduced with permission.

WATCH: FBI Shows Up at Childhood Home of Pro-Life Activist

Estimated Reading Time: 5 minutes

Two agents with the Federal Bureau of Investigation visited the childhood home of a pro-life activist and told the woman’s mother that they wanted to speak with her, according to footage obtained by The Daily Signal.

Elise Ketch is a member of the Progressive Anti-Abortion Uprising, a group of mostly left-leaning activists who believe that abortion is the murder of a human child. PAAU particularly gained prominence after the group exposed the bodies of five premie-sized aborted babies, known as “The Five,” from the clinic of Washington, D.C., abortionist Cesare Santangelo.

The 26-year-old officially joined PAAU in December 2022 after volunteering with the group for a few months.

Her entrance into the pro-life group came as PAAU activists Lauren Handy, Jonathan Darnel, and Herb Geraghty faced charges from the Justice Department for violating the Freedom of Access to Clinic Entrances Act, which “prohibits threats of force, obstruction and property damage intended to interfere with reproductive health care services” (the DOJ has commonly used “obstruction” in charging pro-life activists with blocking the entrance to an abortion clinic).

Ketch has participated in PAAU’s “Pink Rose Rescues,” wherein activists attempt to enter an abortion facility and “quietly hand out pink roses to people in the waiting room”—then leave upon being told that they are trespassing. The roses have information about pregnancy resources, such as the phone number for Let Them Live, Ketch explained.

She also participated in a nonviolent demonstration on March 23, 2022, where she and other PAAU members were arrested for blocking the street outside the Rayburn House Office Building as they sought to draw attention to “The Five.” It had been a year since their discovery of the baby bodies, and D.C. authorities have thus far stonewalled investigations into the babies’ deaths.

On April 18, around 2:45 p.m., FBI agents went to the home of Tracy Ketch, Elise Ketch’s mother. Ring camera footage provided to The Daily Signal shows two women standing on the front porch of Ketch’s childhood home in Woodbridge, Virginia. The women identified themselves as Ashley Roberts and Kathleen Brown.

“We are both with the FBI,” Roberts told Ketch’s mother. “We just need to speak with her regarding some information that was sent to us.”

When Tracy Ketch informed the agents that Ketch no longer lives at that residence, Roberts asked for Ketch’s residence or phone number.

“She’s not in any trouble,” Roberts assured Tracy Ketch with a smile, the footage shows. “We just have some information we need to ask her about.”

“We would tell you all the information because, like I said, she’s not in any trouble, but just out of respect for her, we’d like to speak with her first,” Roberts says, adding with a shrug, “and then, if she feels like talking to you, which I’m sure she will because it’s nothing … ”

The incidents that these activists were involved in all took place before they were members of PAAU, the group’s founder, Terrisa Bukovinac, told The Daily Signal. Ketch does not believe that she has ever been involved in any kind of activity that would allow authorities to bring FACE Act charges against her.

More Ring camera footage viewed by The Daily Signal shows Ketch’s mother stepping onto the front porch and calling her daughter.

“I have two FBI agents at the front door,” she tells her daughter.

“FBI agents,” Ketch can be heard repeating, as Roberts breaks into a smile. “Mom, don’t tell them anything.”

“Ok, what do you want me to do?” she asks her daughter. As Ketch speaks, her mother waves the agents off the porch and opens the front door, stress written across her face.

The FBI did not immediately respond to requests for comment from The Daily Signal for this story.

Elise Ketch told The Daily Signal that she has “no idea what information the FBI was sent” that would require her to talk to them. But she has a few guesses.

“My colleague at Progressive Anti-Abortion Uprising, Lauren Handy, is indicted under the FACE Act and is being prosecuted by the federal government,” she said. “It’s plausible that these FBI agents aimed to collect information from me to help build their case against her.”

“While they reassured my mother that I was not in trouble, it’s also possible that they see me as a threat due to my pro-life activism and intended to investigate me,” Ketch speculated. “Yet, to my knowledge, they never attempted to follow up with me or my attorney, so I believe the FBI’s true motive behind their visit to my parents’ home was to intimidate me and my team.”

The visit made her concerned for her family’s safety, Ketch said, adding, “I refuse to back down.”

“This weaponization of our government institutions protects the abortion industrial complex, and it reinforces that we must disrupt these unjust power structures,” she said. “The most prevalent domestic threat to our country is the murder of thousands of preborn people by abortion each day. It is not terrorism to nonviolently intervene and rescue these powerless children before their slaughter. I’m willing to risk my own freedom and sacrifice my rights in order to secure theirs.”

Bukovinac, PAAU’s founder, told The Daily Signal that she believes “the feds are desperate to find a reason to shut us down and they’re not above coming to our parents’s homes to try to find what they’re looking for.”

“The FBI is targeting PAAU members because our activism challenges the property lines of and disrupts commerce for the abortion industrial complex,” Bukovinac said. “We are especially a problem for them because we are nonviolent and therefore our efforts and ideas are rapidly catching on.”

The incident comes as Republicans accuse the Department of Justice of targeting pro-life activists, like Catholic father Mark Houck, who was arrested at gun point in front of his children (a jury later found him not guilty of the DOJ’s FACE Act charges).

Meanwhile, despite over 100 leftist attacks on Catholic churches and pro-life pregnancy centers across the nation since the leak of the draft opinion showing Roe v. Wade would be overturned, the DOJ has only charged four people with FACE Act violations for these offenses.

And in December 2022, Associate Attorney General Vanita Gupta said herself that the DOJ has been targeting pro-life activists through the FACE Act as a response to the Supreme Court’s June 2022 decision to overturn of Roe v. Wade.

The associate attorney general described the overturn of Roe v. Wade as a “devastating blow to women throughout the country” that took away “the constitutional right to abortion” and increased “the urgency” of the DOJ’s work—including the “enforcement of the FACE Act, to ensure continued lawful access to reproductive services.”

As of early May 16, there have been at least 87 attacks on pregnancy resource centers and 157 attacks on Catholic churches since the May 2022 Dobbs leak, according to CatholicVote trackers. Many of these buildings have been vandalized with threats such as, “If abortions aren’t safe, neither are you,” making the attacks incidents of suspected pro-abortion violence.

Pregnancy resource centers are typically run by pro-life women who seek to offer expectant mothers alternatives to abortion. Such centers provide diapers, baby clothes, and resources for both mothers and fathers, empowering them to care for their children, overcome addictions, build community, and find jobs.

Houck and his wife Ryan-Marie previously told The Daily Signal that they believe they were targeted by President Joe Biden’s Justice Department in an effort to intimidate, silence, and scare the family for their pro-life work—praying outside abortion clinics for the women headed inside to abort their unborn babies.


This article was published by The Daily Signal and is reproduced with permission.

Conservatives and the Lure of Relativism

Estimated Reading Time: 4 minutes

Editors’ Note: This piece is an excerpt from Hadley Arkes’s latest book, Mere Natural Law, available now from Regnery.


Accepting the idea that democracy is all about process undermines the very principles of our regime.

Years ago, I was brought into a meeting with the American Civil Liberties Union (ACLU) to state “the other side” in a case dealing with a band of Nazis in Skokie, Illinois. The self-styled Nazis were seeking to parade, with swastikas and armbands, in a community containing many Jews who had survived the Holocaust. David Hamlin of the ACLU declared at the time that the First Amendment “protects all ideas—popular or despised, good or bad…so that each of us can make a free and intelligent choice.” In Hamlin’s translation, it was a matter of being “popular” or “despised”—to be despised was merely to be “unpopular.” It was no part of his understanding that certain things may be, in themselves and in principle, truly despicable. And now it may be the height—or the depth—of irony that this position of the ACLU seems to be settling as the position even of conservatives on the Court.

But during the debate over the Nazis in Skokie I had pointed out that the real threat did not come from that ragtag bunch calling itself the American “Nazis.” The more serious danger was a political class talking itself into the notion, as David Hamlin had it, that we must be free to hear the Nazis because we must be free to choose the Nazis and their policies in a free election. The assumption, in other words, is that democracy is all process and no substance: that people are free to choose anything—to choose slavery or genocide—as long as it is done in a democratic way with the vote of a majority. In this understanding, it would be legitimate for the American people to choose the Nazis or the white supremacists because their ends are no less legitimate than any other set of ends on offer in our politics.

But the very freedom to choose a candidate or a party in a free election sprang, of course, from the “proposition,” as Abraham Lincoln called it, that “all men are created equal,” that the only rightful government over human beings depends on “the consent of the governed.” The Nazis, on their racial principle, rejected that founding premise and, with it, the regime of free elections. To say that it was legitimate to choose the Nazis in an election was to say that it was legitimate to choose the party that would end free elections. And as it acted out its character, it would sweep away also that regime of absolute freedom of speech that the ACLU affects to treasure. But if that regime of freedom was good in principle, we could not be warranted in choosing to sweep it away. If that regime is not rightful in point of principle, then the principle of “all men are created equal” could not itself be true. It could not be, as Lincoln thought it was, a “self-evident” or necessary “truth, applicable to all men and all times.” It could be, at best, only something true now and then. If it is not an enduring truth, it must only be an opinion, no more or less true than any other set of opinions on offer in the political landscape.

Again, the real danger posed by that case in Skokie was not that of the gaggle of a dozen would-be Nazis on the street. The deeper danger was that lawyers from the best schools, heading the ACLU, would talk themselves out of the very principles that marked this regime and the ground of their own freedom. But the even sadder move is that a corps of gifted conservative judges, bracing for a wave of intolerance, seem willing now to adopt as their own the jural doctrines on speech established by the ACLU.

Only a year after Matal v. Tam, [the Supreme Court’s] slide into a tactical relativism would be taken a step further in the famous case of Jack Phillips, the Masterpiece Cakeshop baker who had refused to design a cake to celebrate a same-sex wedding. The case did not exactly have a resounding resolution. For Justice Kennedy, the swing vote, the case turned on the fact that the Colorado Civil Rights Commission had gone out of its way to show a gratuitous contempt for Phillips and for the Christian convictions that reinforced his moral judgment. Justice Alito rightly sensed the need to say something more emphatic in defense of religious freedom. He drew to his side his new colleague, Justice Gorsuch, and together they risked taking this emerging, half-hearted relativism just a bridge too far. For now, the two justices were moved to say that “just as it is the ‘proudest boast of our free speech jurisprudence’ that we protect speech that we hate, it must be the proudest boast of our free exercise jurisprudence that we protect religious beliefs that we find offensive.”

Is the assumption now that nothing going under the name of religion may ever embrace anything that is in principle wrong or despicable—that offensiveness is simply in the eye of the beholder? But what of Satanism? How can the affirmation of radical evil be consistent with anything that we could consider “religion” rightly understood? And yet, as bizarre as it sounds, that is precisely the argument that some conservatives have fallen back upon that in order to secure religious freedom from the prejudices of the irreligious or the people hostile to religion, it is necessary that we stop presuming to cast judgments on any religious teachings as legitimate or illegitimate, defensible or indefensible. But this affirming of relativism, this radical denial of the grounds of moral judgment, has the perverse effect of undercutting the very ground on which we would offer a moral defense of religion. Or an account, in other words, of just why religion is worth protecting.


This article was published by The American Mind and is reproduced with permission.


is the Founder and Director of The James Wilson Institute on Natural Rights and the American Founding. He was the main advocate, and architect, of the bill that became known as the Born-Alive Infants’ Protection Act. Among other books, he is the author of Natural Rights and the Right to Choose (2002), and Constitutional Illusions and Anchoring Truths: The Touchstone of the Natural Law (2010), both with Cambridge University Press. A longtime member of the faculty at Amherst College, and The Edward Ney Professor of Jurisprudence, since 2016 he has assumed emeritus status.

Home Sales Plunge, Supply Rises, Prices Drop Year-over-Year Most since 2012. Even Investors Pull Back

Estimated Reading Time: < 1 minute

All-Cash sales plunge 22% as investors don’t feel like overpaying either. The 2023 version of the spring selling season is here.


OK, it’s spring selling season, the famously best times of the year to sell a home, because that’s when prices rise and sales rise due to hot demand from home buyers who were hiding out in the winter. But this year?

The median price of all types of previously owned houses, condos, and co-ops whose sales closed in April fell year-over-year by 1.7% to $388,800, the third month in a row of year-over-year declines, according to the National Association of Realtors. A debacle we haven’t seen since February 2012, when the market emerged from Housing Bust 1. From the peak last June, the median price declined by 6% (historic data via YCharts):

For single-family houses, the median price fell 2.1% year-over-year, the third year-over-year decline in a row, to $393,300. For condos, the median price still ticked up 0.7% year-over-year, to $348,000.

But it’s still spring selling season when prices always rise from one month to the next. Even during Housing Bust 1, the median price often rose month to month during spring selling season, and sometimes by quite a bit. And the median price in April was up from March, but that increase was smaller than the increase in April 2022 (+4.3%). Hence the larger year-over-year decline (historic data via YCharts):

Sales of all previously owned homes fell by 3.4% in April from March, to a seasonally adjusted annual rate of sales of 4.28 million homes, solidly entrenched in the dismal levels of Housing Bust 1……


Continue reading this article at Wolf Street.

Arizona News: May 22, 2023

Estimated Reading Time: < 1 minute

The Prickly Pear will provide current, linked articles about Arizona consistent with our Mission Statement to ‘inform, educate and advocate’. We are an Arizona based website and believe this information should be available to all of our statewide readers.


Governor Hobbs Thumbs Nose At Election Integrity And American Manufacturing

Fontes Fumed Over Budget, Stormed Through State House

Protecting ESAs In The Budget Is Good News For Education And The State’s Surplus

Riley Gaines Urges Congress To Pass Rep. Lesko’s ‘What Is A Woman’ Law

Arizona lawmakers send Hobbs school ‘restroom accommodation’ bill

Mesa Public Schools Leaves Out Parents

Legislature Focused On Future Of Water

Phoenix, Prescott high performers in new economic growth index

Tempe votes down $2.1B Coyotes’ arena, entertainment complex proposal

Ben Avery Shooting Facility Switches To Summer Hours

University Housing Biden Center Took Funds From Firm Controlled By China’s ‘Supreme Organ Of State Power,’ Docs Show

Estimated Reading Time: 3 minutes

The University of Pennsylvania received over $500,000 from a company that serves as an investment arm of the Chinese Communist Party (CCP) after it opened Joe Biden’s think tank in 2018, according to the university’s foreign gift reporting records.

Between 2018 and 2020, China Everbright Group, a “state-owned financial conglomerate,” donated $523,840 to the University of Pennsylvania following the February 2018 launch of the Penn Biden Center for Diplomacy and Global Engagement, according to UPenn’s foreign gift reporting records. China Everbright Group was founded in 1983 with the backing of the State Council, which is composed by the heads of each Chinese government ministry and is China’s “supreme organ of state power,” according to the Chinese government.

Moreover, China Everbright Group also appears to have ties to Hunter Biden’s Chinese business ventures, according to multiple financial disclosures.

At the time of the donations, state-owned Central Huijin Investment Ltd. held a majority of China Everbright Group’s shares, according to Chinese state-owned bank records for 2018, 2019 and 2020.

The State Council appoints the board of directors and supervisors for Central Huijin Investment, which invests “in accordance with authorization by the State Council,” Huijin’s website states.

In October 2018, China Everbright Group donated $18,140 to UPenn, according to foreign gift reporting records released by Fox News Tuesday, which were obtained by Americans for Public Trust.

Two months later, China Everbright Group made another $314,110 donation to UPenn in December 2018, foreign gift reporting records show.

The following year, China Everbright Group made a third donation of $191,590 to UPenn in September 2019, according to the records.

China Everbright Group also has links to Hunter Biden’s business dealings, according to financial disclosures.

China Everbright Group was listed as parent company” of China Everbright Bank in 2014, according to multiple reports.

In turn, 2014 SEC filings show that China Everbright Bank was a “major investor” for Bohai Harvest RST, where Hunter Biden served as “board member” at the time.

Meanwhile, China Everbright Bank’s former “international business department” head, Hua Zhixiang, has been listed as an “investment partner” on Bohai Harvest’s website since 2015 and remains currently listed as such.

In addition to China Everbright Group’s donations to UPenn, on May 16, Fox News identified over $7 million that UPenn received from Chinese sources linked to Hunter Biden after the Penn Biden Center was established.

Based in Washington, D.C., the Penn Biden Center aims to “develop and advance smart policy and strengthen the national debate for continued American global leadership in the 21st century,” according to its website.

Last week, the House Oversight Committee released a report detailing how foreign money flowed through a web of companies to Biden family members’ bank accounts as part of an alleged “influence peddling” scheme. Among other things, the House report alleges that, in 2017, “Chinese nationals and companies with significant ties to Chinese intelligence” attempted to conceal the source of a $100,000 wire transfer to Hunter Biden’s “professional corporation” called Owasco P.C.

In the past, the U.S. government has alleged that China Everbright Group harbors ties to Chinese intelligence and influence operations.

For example, the U.S.-China Economic and Security Review Commission (USCC) identified China Everbright Group’s vice-chairman and president, Gao Yunlong, as one of 26 Chinese government officials affiliated with the CCP’s “United Front” in 2018.

The CCP uses so-called “United Front” work to “co-opt and neutralize sources of potential opposition to the policies and authority of its ruling CCP,” according to USCC, and its activities “are coordinated by the CCP’s United Front Work Department.”

The FBI recently described the United Front Work Department as “an entity that reports directly to the Central Committee of the CCP and works to further the CCP’s goals,” in a May 2023 press release.

UPenn’s spokesperson told the DCNF by email that the university “reported all foreign contributions as required and they have been publicly available on the Department of Education website for some time.”

“No foreign funds were contributed anonymously and no foreign funds were directed to the Penn Biden Center,” the spokesperson wrote.

However, UPenn’s spokesperson declined to explain the university’s policy for accepting donations from the Chinese government.

China Everbright Group also came under scrutiny for its alleged ties to influence peddling and CCP influence operations in the 1990s, according to multiple reports.

In 1998, Republican congressional investigators alleged that China Everbright Group directed at least $30,000 of illegal funds into the Democratic National Committee’s 1996 campaign coffers through President Bill Clinton’s fundraiser, Charlie Trie, The Washington Post reported.

Although China Everbright Group’s culpability in the 1996 DNC campaign financing scandal remains unclear, Trie ultimately pled guilty to violating federal election laws in 1999 related to his role in funneling more than $600,000 to the DNC from China, according to The Washington Post.

The White House did not respond immediately to the DCNF’s request for comment.

Hunter Biden could not be reached for comment.


This article was published by the Daily Caller and is reproduced with permission.

A Book to Help Young Americans Understand Economics: Economics in Action by Brian Balfour

Estimated Reading Time: 5 minutes

Very few young Americans learn anything about economics. Some high schools offer it, but the courses are usually taught by teachers who have scant knowledge of the field, using books that are heavily laden with anti-market sentiments. Such books reinforce socialistic ideas about worker exploitation, the supposed instability of capitalist economies, the need for governmental welfare systems, and many other interventions. The seeds of hostility towards economic freedom are planted in those classes, as well as in many others high school students take.

Then, in college, the economic myths and misconceptions learned in high school are apt to be reinforced, even if the student takes an economics course. The typical college Econ 101 course is rooted in Keynesian analysis and is rife with discussions about market failures that only government action can supposedly solve. This steady exposure to, as Ludwig von Mises called it, the anti-capitalist mentality, helps to explain why so many young Americans say they would prefer to live under socialism.

Clearly, we need better teachers and better textbooks.

Here is some good news in that regard. Thales Academy, a network of private schools that began in Raleigh, NC and has spread into South Carolina, Virginia, and Tennessee, has developed and published a textbook for use in its high school economics course entitled Economics in Action. The book was written by Brian Balfour, Senior Vice President of Research at the John Locke Foundation, and it is written from the Austrian standpoint. That is to say, it is rooted in the thinking of Karl Menger, Eugen von Bohm-Bawerk, Ludwig von Mises, and other economists (whether actually from Austria or not) who emphasize that the understanding of economics must begin with the logic of individual action.

Balfour patiently explains to students that the laws of economics derive from the fundamental point that human beings only act when they believe that doing so will make them better off. That is the basic axiom from which the entire discipline flows. Economics is thus a science of reason, not of statistics. It is open to everyone, not just those who are comfortable with abstruse mathematics. You won’t find any equations in the book, just clear, persuasive English.

One of the first and most important lessons that readers of Economics in Action will grasp is that only individuals act. We often hear that “the economy” is behaving in a certain way, like “sluggish” or “overheated,” but Balfour explains that such notions are misleading. When we speak of “the economy” we are talking about the great network of individuals who produce and trade, not a thing capable of action on its own.

In their decision-making, individuals are constantly faced by scarcity. There are limits on time and the resources available. Therefore, people must choose carefully, making the trade-offs that best suit their own circumstances and values. The millions of people who comprise “the economy” are guided in their choices by prices and opportunity costs (the most valuable option that must be given up to do something else). The book explains how prices come about as a natural consequence of the basic axiom — people trying to make themselves better off — and how trade will occur if and only if the trading partners think they will both gain. The picture that emerges for students is that order comes from the millions of individual actions, an order that no one planned or needs to direct.

Seeking to make themselves better off, people naturally tend to specialize in whatever they do best and trade with others to obtain goods and services that they couldn’t produce efficiently for themselves. The resulting division of labor is a crucial part of the spontaneous economic order, one that the book shows is vital to prosperity.

Also vital to prosperity is entrepreneurship. Balfour explains to his readers that when individuals see opportunities for profit that others have not, they can earn a lot for themselves by assembling the resources necessary to produce the new good or service. If their vision turns out to be accurate and consumers really do want the product, they will make profits, which are usually reinvested in the business to expand output. But if the entrepreneur is mistaken, the result will be losses, indicating that he has wasted resources. The important point here is that economic liberty encourages people to look for improvements, rewarding them if they’re right.

Some students might be thinking that this free market system sounds good, but couldn’t it be made better if the government stepped in to accomplish certain desirable goals?

Economics in Action has the answer to that question: No.

What if the government tossed out the system of private property and liberty in favor of socialism? Large numbers of Americans profess that we’d be better off because socialism is more “fair.” Balfour makes it clear that socialism necessarily means enormous waste of resources, because it lacks a price system. Not only that, but socialism leaves little or no room for entrepreneurship, so progress would grind to a halt.

Well, what if the government were to try to help poor workers by demanding that employers pay wages that are higher than the levels that prevail in the market?

In his chapter “Interventions in the Market,” Balfour explains why all varieties of government interference with the natural economic order will have undesirable effects. Minimum wage laws prevent some workers from being able to find jobs (at least, legal ones); maximum price laws inevitably cause shortages in the market and impede the increase in production that’s needed; laws against “price gouging” after natural disasters make things worse by driving away profit-seeking individuals and companies that want to sell badly needed goods and services. Furthermore, taxes interfere with the functioning of the market by diverting resources away from the uses that would be dictated by competition and into the projects desired by politicians, projects which are often wasteful or even counterproductive.

The book also devotes many pages to a discussion of money. Students learn how money comes into existence as a highly valued commodity that most people willingly accept in trade. Gold emerged as the ideal money, although other items have also served as a medium of exchange. The problem begins, Balfour shows, when governments take over the production of money, moving away from commodity money (such as gold) and replacing it with fiat money. Fiat money is not backed by any actual value and governments can (and almost inevitably will) produce more and more of it so they can pay for their expenses.

When they do that, the result is inflation. Most Americans think that “inflation” means generally rising prices, but Balfour correctly states that what is actually being inflated is the supply of money. One of the consequences of doing that is generally rising prices, as the value of each unit of money decreases. But that isn’t the only consequence. Another is the boom-and-bust business cycle, which results from the way governments artificially depress interest rates through their central bank operations.

Balfour concludes with a chapter on economic fallacies. He explains why labor-saving devices are not a “curse,” but instead are essential to an increasing standard of living; why government programs to “create jobs” are worse than useless; and why it’s a mistake to think that the rich get rich at the expense of the poor.

Who should read Economics in Action? I would say that it should be read by anyone who desires to grasp the truth about economics — students and adults. But focusing on students, I would recommend that parents who want their children to be part of the solution, rather than part of the problem, should get this book for them.

Homeschooling parents will find that the book does a superb job of covering the basics and getting their children to think sensibly about economics. Parents who have children in schools might want to get this book for them as a supplement to the materials they will receive if they have an economics class — materials that will probably be full of falsehoods and disinformation. Countering the plague of economic falsehoods and disinformation that statists constantly spread is crucial to our liberty, and this book does so brilliantly.


This article was published at AIER, American Institute for Economic Research and is reproduced with permission.

Over 100 Behavioral Treatment Centers, Sober Living Homes Accused of Medicaid Fraud

Estimated Reading Time: 2 minutes

Arizona State officials say dozens of behavioral health and sober living homes have perpetrated a years-long Medicaid fraud scheme.

Gov. Katie Hobbs, Attorney General Kris Mayes, Arizona Health Care Cost Containment System Director Carmen Heredia, Salt River Pima-Maricopa Indian Community President Martin Harvier, and Assistant U.S. Attorney Andy Stone announced the findings Tuesday morning in Phoenix.

Hobbs said the alleged crimes amount to “hundreds of millions of dollars.”

Patients primarily from reservations, she said, were enticed with food and shelter only to be encouraged into continuing their addictions while the facilities billed Medicaid for care that never happened.

“For years, these providers have allegedly defrauded the state of millions of dollars while creating a large-scale humanitarian crisis that disproportionately affects Arizona’s tribal communities,” Hobbs said Monday. “People have had to escape out of windows and jump over fences in the middle of the night just to access a phone to reach the outside world.”

Hobbs said payments to these facilities saw state payments stopped Monday and that she directed AHCCCS to implement additional safeguards.

The alleged fraud took place largely on tribal land to deceive state officials.

“Generally, they began with fraudulent treatment facilities recruiting Native Americans, typically those residing on a reservation or part of the urban homeless population,” Mayes said. “These vulnerable individuals were incentivized to participate in ‘treatment’ at an outpatient clinic with offers of things like free food, cash incentives or free rent.”

Mayes said the facilities would convince AHCCCS that the patient was eligible for benefits, even if they weren’t via a tribal health program.

Officials expect the charges to result in facility closures.

The Arizona Council of Human Service Providers, a provider association representing more than 125 of the type of facilities in question, said in a statement that they’d work with law enforcement and state officials.

“As an association, we are also acutely aware of the impact that this may have on clients who rely on these services for their mental health needs,” the council said. “We understand the importance of continuity of care and are committed to working with our members, as well as government agencies and MCOs, to ensure that all affected clients are able to receive the care they need during this transition.”


The article was published by The Center Square and is reproduced with permission.

Weekend Read: Everything You’ve Heard About the Debt Limit is Wrong

Estimated Reading Time: 10 minutes


Contrary to widespread claims that the U.S. government will default on its debt if Congress doesn’t raise the debt limit, federal law and the Constitution require the Treasury to pay the debt, and it has ample tax revenues to do this.

Nor would Social Security benefits be affected by a debt limit stalemate unless President Biden illegally diverts Social Security revenues to other programs.

The debt limit is a valuable tool for transparency, accountability, and giving voters an ongoing say in how their money is spent.

The Debt Situation

The U.S. national debt has grown by $8.2 trillion since 2020 and is now $31.5 trillion. This is an average debt of $239,763 for every home in the nation.

Those figures don’t account for the government’s fiscal liabilities and unfunded obligations. When these are included—as government requires in the financial statements of publicly traded corporations—the total federal shortfall is $135 trillion. This is an average burden of more than $1 million per household.

In addition, Biden has proposed a budget framework that will allow the national debt to grow over the next decade by $19.8 trillion, according to his own administration’s projections.

Such levels of red ink have perilous consequences for nearly everyone, like higher inflation, wage stagnation, investment losses, and lower standards of living.

To limit the damage from excessive government debt, House Republicans have passed a bill that would reduce budget deficits by about $4.8 trillion over the next 10 years. This isn’t enough savings to actually pay down the debt but would restrain its growth by about 25% relative to Biden’s agenda. The bill accomplishes this mainly by reducing spending on social programs and “green” energy subsidies.

Biden and the Senate Democrats have said they won’t approve the bill or anything like it. However, they are under pressure to negotiate because the federal government is spending about 22% more than its revenues and has reached the legal limit of its ability to borrow more money. This is called the “debt ceiling” or “debt limit,” a provision of federal law by which Congress exercises its constitutional power to “borrow money on the credit of the United States.”

Biden and the Democrats raised the debt limit by $2.5 trillion in December 2021 when they controlled both the House and the Senate. The Republican bill increases the debt limit by another $1.5 trillion, but in opposition to the Democrats’ stance, Republicans have said they won’t raise the debt limit without including deficit-reducing provisions in the same bill.

The Biden administration has some ability to skirt the debt limit by using “extraordinary measures,” which basically involve shuffling money around. However, these measures are nearly exhausted.

So unless Democrats and Republicans agree on a bill to raise the debt limit within about one month, the federal government will have to cut enough spending to completely stop the growth of the national debt. Or in other words, it will have to operate with a balanced budget.

The “Default” Farce

The U.S. Treasury—which is responsible for managing the national debt—is part of the executive branch of the federal government, which is under the authority of President Biden.

Biden alleges that unless the debt ceiling is raised, the government will “default on its debt” for the “first time” in the history of United States. A default is a “failure to meet a financial obligation,” particularly paying a debt.

In concert with Biden, scores of media outlets—such as PoliticoNPRCNNNBC, the New York Times, and the Washington Post—have reported that not raising the debt limit could cause the government to default on its debt.

In reality, however, federal law requires the Treasury to pay the debt, and the federal government has ample revenues to do so. So if there is a default, it will only be because the Biden administration breaks the law.

The federal law that governs the repayment of the national debt states:

(a) The faith of the United States Government is pledged to pay, in legal tender, principal and interest on the obligations of the Government issued under this chapter.

(b) The Secretary of the Treasury shall pay interest due or accrued on the public debt.

The phrases “pledged to pay” and “shall pay” are definitive, unlike discretionary government programs for which money is “appropriated” and is sometimes not even spent.

Moreover, the federal government collected $5.1 trillion of revenues in 2022, while interest on the debt was $775 billion, or roughly 15% of revenues. This reveals that the federal government has plenty of money to service its debt and trillions more for other expenses.

The federal law that requires payment of the debt reinforces the 14th Amendment to the Constitution, which states: “The validity of the public debt of the United States … shall not be questioned.”

Yet in response to a question about the 14th Amendment, Biden press secretary Karine Jean-Pierre claimed that Congress has a “constitutional duty” to raise the debt limit. This turns the plain meaning of the amendment on its head. The 14th Amendment requires the government to honor its existing debt, not to continually take on more debt. It is Biden, not Congress, who is threatening to shirk his constitutional duty to pay the debt unless Congress lets him borrow more money.

Explaining the obvious while debunking tortured legal theories about the debt limit and the 14th Amendment, Michael W. McConnell, the director of the Constitutional Law Center at Stanford Law School, writes:

If Section Four [of the 14th Amendment] has any relevance to the debate, it means that the President is under a constitutional, as well as a pragmatic, obligation to keep current on interest and principal, rather than continuing other spending with a mere statutory basis.

In short, an actual default can only occur if the President disregards a federal law that supports the Constitution he has sworn to uphold.

Prioritizing Spending

Without presenting any evidence to support their claims, some organizations and individuals have asserted that the Treasury doesn’t have the legal authority to prioritize paying the debt before other expenses in the event of debt limit impasse.

Some examples include the Center on Budget and Policy Priorities, columnist Jamelle Bouie, and Max Baucus a former U.S. Senator from Montana who is now Biden’s ambassador to China. During a floor speech in the Senate, Baucus declared:

The Treasury has no legal authority to prioritize spending and pay only the most important bills.

Baucus’ statement is in conflict with “the supreme law of the land,” otherwise known as the U.S. Constitution. As documented by Ph.D. David Upham, the Director of Legal Studies at the University of Dallas, the Constitution explicitly requires federal officials to perform specific functions like:

  • the President’s duty to “take Care that the Laws be faithfully executed” and to “preserve, protect and defend the Constitution.”
  • Congress’ duty to “assemble at least once in every Year.”
  • the entire government’s duty to “guarantee to every State in this Union a Republican Form of Government” and “protect each of them against Invasion.”
  • the duty to honor “the public debt of the United States, authorized by law, including debts incurred for payment of pensions….”

Since all of these constitutional “duties to act involve a duty to spend money,” writes Upham, the government is required to “prioritize” spending on them if the debt limit is maxed out.

Likewise, liberal icon and Harvard law professor Laurence Tribe explained during an Obama-era debt limit standoff that the president:

  • “must prioritize expenditures” and “some payments simply have to be postponed until the Treasury has enough money to make them.”
  • isn’t “free to use whatever priorities he likes” but must prioritize spending on constitutional mandates, like “payments on the public debt” and “the payment of judicial salaries.”

This past Sunday, the New York Times published an op-ed by Tribe in which he pulls a 180 on this issue and declares “I changed my mind” and Biden can order the Treasury to “borrow more than Congress has said it can.” He admits that this would require the president to ignore the debt limit law but argues that:

  • the president would otherwise have to ignore “all the spending laws Congress has enacted.”
  • this course of action would “give the president a lot less power than entrusting him to decide which of the government’s promises to honor and which creditors to stiff—a power that the Supreme Court denied him when it handed down a 1998 decision that prevented him from vetoing line items within a budget.”

However, Tribe himself dismantled those very same arguments in a 2011 essay, and his Times op-ed rebuts none of the points he raised. These include but are not limited to the following:

  • “Spending laws” don’t “empower the government to raise the revenues to be spent.”
  • The “Constitution allocates” the power to raise revenues to “Congress rather than to the President.”
  • Issuing debt is one of the ways government raises revenues, and the President can’t do that by himself, just as he can’t impose taxes by himself.
  • “As far as I am aware, no President of the United States has ever attempted to raise revenue without congressional authorization.”
  • In contrast, “Ulysses Grant, Franklin D. Roosevelt, Harry Truman, and Richard Nixon all declined to spend money that Congress had appropriated.”

In his recent backflip, Tribe also claims that “ignoring” the debt limit wouldn’t “represent a dangerous step in a tyrannical direction.” This is at odds with emails he sent to a high-ranking Treasury official in 2011. In this exchange, Tribe addressed the possibility of Obama using the same justification Tribe endorsed in his 2023 Times’ op-ed and wrote that it would set “a genuinely dangerous precedent of ignoring the rule of law.”

Yes, They Can

Another excuse as to why the federal government can’t prioritize spending on the debt is that the Treasury is incapable of doing this. According to a Treasury Inspector General report during the Obama administration, the Treasury “makes more than 80 million payments per month,” and “Treasury officials determined that there is no fair or sensible way to pick and choose among the many bills that come due every day.”

That claim proved to be false when congressional subpoenas forced the Obama administration to produce documents which revealed that the Treasury:

  • was “technologically capable” of prioritizing payments on the debt.
  • was running “debt ceiling exercises regarding these sorts of contingencies” since 2011.
  • “was planning to prioritize payments during the debt limit impasses of 2013.”
  • hid these facts “to maximize pressure on Congress” so they would cave to Obama’s “position that any increase in the debt ceiling not be accompanied by spending constraints.”

Beyond those revelations, investigations of this affair yielded admissions that the President is responsible for deciding what gets paid and what does not.

During a congressional hearing, Obama Treasury Secretary Jack Lew was asked if he would “permit a missed payment on a U.S. Treasury security obligation,” and he replied, “It is actually not my decision. It is something that the President would have to decide.”

Likewise, the Treasury Inspector General concluded: “Ultimately, the decision of how Treasury would have operated if the U.S. had exhausted its borrowing authority would have been made by the President in consultation with the Secretary of the Treasury.”

Biden maintains that if Republicans don’t go along with his plan to raise the debt limit, they will force the government to default on its debt and to cut payments for popular government programs like Social Security. In reality, these actions would be Biden’s choice alone.

Social Security Payments

Beyond Biden—organizations and people like CNNNancy Pelosi, and NBC News say that not raising the debt limit may cut or stop Social Security payments.

Such an event cannot happen unless Biden unlawfully diverts Social Security revenues to other programs. The finances of the Social Security program are legally separated from the rest of the federal government, making it illegal to spend Social Security taxes on any program other than Social Security. Furthermore, the 2022 Social Security Trustees Report states:

The Social Security Act prohibits payments from the OASI [Old-Age & Survivors Insurance] and DI [Disability Insurance] Trust Funds for any purpose not related to the payment of benefits or administrative costs for the OASDI [Social Security] program.

The fact above also explodes the common myth that the Social Security Trust Fund has been “looted.” Such “looting” is actually a law (established in the original Social Security Act of 1935) that requires the Social Security program to loan all surpluses to the federal government. The government is required to pay back this money with interest, it has never failed to do so, and it has been doing this since 2010.

Social Security Trust Fund assets are comprised entirely of federal government debt. The Treasury’s obligation to pay the interest and principle on this debt is covered by the same law that requires it to pay for all other debt.

As such, Professor McConnell writes, “Social Security payments are not jeopardized by hitting the ceiling.” However, they could be jeopardized by a president who violates the law.

Transparency and Accountability

According to Cal Berkeley professor Robert Reich, the debt ceiling “serves absolutely no purpose” and should be abolished. Likewise, the New York Times editorial board claims the debt limit “has not served a useful purpose in living memory.”

Just the opposite, the debt limit serves several purposes, two of the most important being transparency and accountability.

Politicians routinely enact thousands of pages of complex laws with rhetoric about saving money, cutting the deficit, and investing in America. Joe Biden’s Twitter feed is heavily laced with such statements.

Yet contrary to his talk of fiscal responsibility, Biden and the Democrats raised the debt ceiling by $2.5 trillion less than a year and half ago and are now pushing to raise it again. Such votes provide public visibility into the actual state of federal finances and who is driving it deeper into debt.

Without debt limit votes, people like Hakeem Jeffries, leader of the House Democrats, can easily pull the wool over voters’ eyes with claims like this: “President Biden and House Dems have cut the deficit by $1.7 trillion over the last two years.” In reality, their actions increased federal deficits by about $840 billion over that period, but understanding this takes knowledge of the following details:

  • When Biden entered office, the Congressional Budget Office was projecting deficits would decline by $2.95 trillion in 2021 and 2022 due to the expiration of pandemic spending.
  • Instead, deficits fell by just $2.11 trillion mainly because Dems increased spending on wide-ranging social welfare programs and bailouts for state/local governments and private union pension funds.
  • Consequently, Democrats increased the deficits by $840 billion relative to what would have happened if they kept the status quo.
  • From the time that Congress enacted Biden’s first major economic proposal through 2022, the national debt grew by $3.5 trillion.

Votes to raise the debt limit are obvious and give voters information to hold politicians accountable. That said, they could still be twisted by unscrupulous journalists and activists. One way to do this would be to blame a party for voting to increase the limit while failing to mention that their opponents voted against the bill because they wanted to increase the limit even more.

The Buck Stops Here

Another important purpose of the debt limit is to prevent previous presidents and congresses from racking up bills while forcing future presidents and congresses to pick up the tab.

For a recent example, one month before Republicans took control of the House in January 2023, a lame-duck Congress and Biden passed an omnibus spending bill that spends $1.7 trillion and spans 4,155-pages. Democrat Rosa DeLauro of CT called it the greatest increase in “non-defense funding ever” and boasted that it “fulfills 98% of Democratic Member requests in the House.” The politicians who voted for this could have raised the debt limit in the same bill, but instead, they left that to the new Congress while saddling it with all of the spending they passed.

On a much larger scale, previous congresses and presidents have enacted large mandatory programs with perpetual authority to spend money, like Medicare, Medicaid, Food Stamps, and other social programs. The share of the federal budget consumed by these programs has grown from about 30% in the early 1970s to more than 60% today.

Mandatory programs have become such an engrained part of government spending that politicians sometimes ignore these outlays when speaking about the federal budget.

The debt limit gives voters and lawmakers a measure of control over the spending that occurs under their watch, even if they don’t simultaneously control both houses of Congress and the presidency.

A common talking point of people who want to violate or eliminate the debt ceiling is that “Congress has already voted to spend this money” and not spending it would be “breaking promises.” What they fail to mention is that the current Congress didn’t vote to “spend this money,” and the previous congresses that made these “promises” didn’t provide enough revenues to pay for them.


Like other aspects of the debt limit debate, popular narratives about why the national debt has become so massive are false. Two of the most common are that tax cuts and military spending are largely to blame.

Contradicting those claims, the share of the U.S. economy collected in federal taxes has been roughly level for 80+ years, and military spending has plummeted from 53% of government outlays in 1960 to only 13% in 2021.

The main driver of the debt is federal spending, which has grown from 3% of the U.S. economy in 1930 to 24% in 2022. This spending is primarily due to social programs, which rose from 21% of federal outlays in 1960 to 73% in 2021.

Naturally, ardent proponents of those debt-inducing programs are trying to raise the debt ceiling, eradicate it, or ignore it. Their arguments, however, are rife with deceit. Contrary to what they claim:

  • the U.S. government will not default on its debt or cut Social Security payments in the event of a debt limit stalemate—unless Biden chooses to flout the law and the Constitution.
  • the Treasury—which is run by the President—has the legal authority and technological capability to prioritize spending.
  • the debt limit serves important purposes, including transparency, accountability, and giving voters an ongoing say in how their money is spent.


This article was published by Just Facts Daily and is reproduced with permission.

Death of the EV Dream, Er, Nightmare

Estimated Reading Time: 4 minutes

Now that the American Dream has been turned into a nightmare in part by overspending that has led to the highest interest rates in the 21st Century, it is high time to admit that, as Melanie Mcdonagh writes in The Telegraph, the electric vehicle dream, too, “has turned into a nightmare.”

Mcdonagh, who admits she does not drive, points out many problems, among them the horrific impact when a heavy, quiet-running electric vehicle hits an unsuspecting pedestrian or a cyclist. She also notes that some of these “vehicles” are collecting data on route history and road speed that governments (and corporations) can use for remote surveillance (and marketing gimmickry). Another problem is that the much heavier EVs could collapse bridges and force lengthy detours.

Mcdonagh, however, has barely scratched the surface of the mess created by the hipster culture that believes everything sacred must be sacrificed before the god of carbon (dioxide) reduction. It turns out that manufacturing electric vehicles has to date been a bad investment for automakers, despite all the subsidies.

Ford Motor Co. says it will lose $3 billion on EV sales this year, after losing $900 million in 2021 and $2.1 billion in 2022, when the company sold 96,000 units. Price drops by Ford and Tesla (and doubtless other companies) are not coming because the vehicles are cheaper to manufacture but because demand has slowed despite the new Biden subsidies. As Robert Bryce points out, Ford in the first quarter of this year lost $66,446 on every EV it sold.

One reason for the huge losses is the increasing price of battery materials, reflected in the 7 percent increase in the volume-weighted average for lithium-ion battery packs from 2021 to 2022. The Biden subsidies are supposed to offset such costs, just as the Biden build in America plan (in Michigan, at least, by Chinese companies) has no chance of diminishing China’s huge lead in EV battery and vehicle production.

Senator John Kennedy (R, LA) recently asked, “If electric cars are so swell. why does government have to pay people to drive them?”

A new J.D. Power report points to a number of reasons that American consumers are sticking with internal combustion engine (ICE) vehicles. While the highest objections to EVs are high prices and lack of public charging infrastructure, vehicle range, charging times, and the threat of grid disruptions that render EVs useless are also deterrents. Other concerns are fires, power surges that lead to accidents, towing capacity and range, and performance in bad weather.

Even a third of Gen Z shoppers, who have been bombarded with pro-EV propaganda for most of their lives, admit they are unlikely to buy one.

It is obvious that the EV boom, such as it is, has been powered nearly entirely by heavy subsidies and marketing hype initiated by bureaucrats and politicians, most of whom have no background in auto sales or any service industries. Their M.O. is bribery and thuggery (forcing people into unwanted choices through market manipulation). Automakers are beginning to balk at these techniques, if only because they see their customer base shrinking once people cannot buy the vehicles they have used for decades.

While Ford and other companies are now boasting of the towing capacity of their EVs, the proof is in the pudding, as they say. MotorBiscuit last month reported that the Ford F-150 Lightning and Rivian R1T can be souped up to tow 10,000 pounds, far short of the gasoline-powered F-150, but with an average range of only 88 miles. That hardly works for multiple tows in a day or for towing a trailer to a campsite 100 or more miles from home.

Imagine putting your family into the truck, hitching up the Airstream, and driving out to the mountains for a weekend at the lake. Finding a charging station where you don’t have to unhitch the trailer to get to the plug-in is a huge challenge, and you have to do this multiple times on a 300-mile trip. With a maximum 90-mile range, you need to recharge every 60 or 70 miles, taking 30 minutes or more for each recharge. You lose an entire day each way. So practical.

Far worse, though, are the risks and challenges to tow truck drivers with an EV that has stopped running. Not only are the vehicles heavy, they are dead weight, locked in park, and potentially suspect to spontaneous fires that ordinary extinguishers cannot put out. A 2021 National Transportation Safety Board report notes that “the energy remaining in a damaged high-voltage lithium-ion battery, known as stranded energy, poses a risk of electric shock and creates the potential for thermal runaway that can result in battery reignition and fire.”

Of course, the bean counters with their glorious visions for an all-electric future (replete with blackouts, price increases, and other tricks to keep the majority of people off the roads entirely) do not take into consideration ANY of the real reasons people drive cars and trucks. Their ONLY consideration appears to be the imaginary reduction in carbon dioxide emissions their computer models insist can only happen by inconveniencing “the little people.”

But should those “little people” elect leaders who will end the inflationary subsidies and dictatorial mandates (including those that ban gas appliances, cripple the performance of dishwashers and HVAC units, etc.), the automakers who have heavily invested in EVs will adjust to real market conditions and continue improving long-cherished technologies.

In today’s increasingly top-down world, Mcdonagh points out that “you can’t even discuss the problems with electric cars without getting jumped on.” That is already beginning to change, especially in a freedom-loving America that has had a century-long love affair with the open road.

Meanwhile, lurking in the shadows is an option that could both reduce atmospheric carbon dioxide and keep ICE vehicles on the road. Hydrogen-based synthetic e-fuels may be expensive today, but they can power ICE vehicles today and tomorrow without sacrificing a nation to the whims of China’s maniacal leadership.


This article was published by CFACT, Committee for a Constructive Tomorrow and is reproduced with permission.