34. National Debt Ceiling Fight: Does It Matter?
In this newsletter, I discuss the upcoming special session in Texas, the latest economic growth and jobs created in Texas, the national debt ceiling fight, budget cuts needed, and more!
Hello Friend!
There’s much to be thankful for as we close another prosperous week and look forward to more flourishing in the upcoming one. I hope that part of your weekly enjoyment comes from reading this newsletter. Please send any improvements and subscribe if you haven’t already and share this newsletter with others. My motto: Free-market capitalism best lets people prosper!
I’ve had a busy week preparing for the recently announced special session in Texas that will start July 8. The specific issues on the Governor’s call have not been released yet, but I’m hopeful that property tax cuts and other important items to our lives and livelihoods will be on the call. I discuss this and more below. There hasn’t been much downtime since the end of the regular session on May 31 as we at TPPF prepare our sound research and new ideas for bold strategies to help Texans prosper.
Another thing that’s been keeping me busy is presenting to those new to TPPF this summer what is economics and how institutions matter. You can view my syllabus “Economics—Let People Prosper” here. This is one of my favorite things to do each semester as part of our Philosophy of Freedom course, which I present along with a few of my other colleagues.
Here are other ways that we can stay connected.
Now let’s get to the economic and fiscal situations in Texas and D.C.
TEXAS ECONOMIC AND FISCAL SITUATION
Gov. Greg Abbott recently called a special session for the Texas Legislature that will start on July 8. The specific issues on the call have not been named yet, but you can find a list of likely issues in my previous newsletter here. I’m hopeful that property tax cuts and better limitations on spending by local governments like the one passed this session for the state will be a part of the call.
The state-level jobs report was released this week. Texas continued to show an improving labor market with job creation in 12 of the last 13 months. But the unemployment rate of 6.5% is the 10th highest overall and the 2nd highest among states with a Republican trifecta (Governor, Senate, House). The state-level gross state product for Q1:2021 was also released this week and it showed that Texas had the slowest real GDP growth at 4.3%. These worse than expected economic data indicate the struggle that many Texans are feeling, but the reopening on March 10, 2021, the end of the new federal unemployment bonuses of $1,200 per month starting on June 26, 2021 (but unemployed will still receive state UI payments for a limited time), the fiscal policy wins during the 87th Legislature, and more pro-growth opportunities available—like eliminating the school district M&O property taxes—will help Texans regain the pre-pandemic prosperity in February 2020.
An insider’s insight on today’s economy: #Texas. My latest on the state’s labor market in May & GDP growth in Q1:2021 texaspolicy.com/texaseconomy/ @TPPF #txlege @GregAbbott_TX @Glenn_Hegar @chiproytx @JohnCornyn @GroverNorquist @StatePolicy @Taxeconomist @patrickmgleason @mrjorgemtz
Good overview of the $5.8 trillion in state unfunded liabilities by Jonathan Williams at ALEC, with Texas ranking too high.
U.S. ECONOMIC AND FISCAL SITUATION
With the recent release of TPPF’s Responsible American Budget, my commentary expanded on how this fiscal rule can be used to not only better limit the federal budget but actually cut it over time.
I noted in this NTD News interview how the national debt ceiling will inevitably be raised soon but there should be a push to do something to start reining in excessive spending by the federal government. Don’t miss the CBO’s fiscal picture over the next 10 years to be released on July 1, that won’t look pretty even with their flawed calculations and the latest poor policies in Biden’s budget.
There have been large shocks with artificial increases in personal income that have helped some people while hurting others through this redistribution with “stimulus” checks, new federal unemployment bonuses, and other forms of support. These should end to return to normal and improve people’s livelihoods with the dignity of work. The latest general price inflation figure of a 3.9% increase in PCE over the last year also means our purchasing power is going down quickly (good explanation of the different measures of general price inflation).
Good paper published by the Committee to Unleash Prosperity authored by TPPF economist E.J. Antoni and University of Chicago economist Casey Mulligan on the benefits of the income tax cuts in Arizona.
Some things to consider with the off-again, on-again at least $1.2 trillion “infrastructure” deal. It’s also interesting to me that some are scoring these bills during the Biden administration over less than 10 years, which was standard during the Trump years and prior to then as well. Is this a way to disguise these massive trillion-dollar spending bills as something less? This should be explored further.
Bipartisan “infrastructure” bill. Fewer wasted uses of taxpayer $, but projects should be in base budget & are often done by many states or private sector. Need to limit roles for govt! Why no 10-yr cost est for Biden bills like during past prez? @Comm4Prosperity @BudgetHawks
✌️ things: 1) Only people in the private sector can invest because 💵 used is theirs not redistributed 💸 from someone else who could use it better. 2) Spending on public transit🚇 & rail🚞 don’t help the vast majority of Americans. #Congress #txlege #ResponsibleAmericanBudget https://t.co/SiVZqwn0JxThe bipartisan deal we reached calls for historic investments in transit, including: - The largest investment in public transit ever - The biggest investment in rail since Amtrak was created - The largest investment in bridges since the interstate highway system was constructed
The White House @WhiteHouse
TEXAS OPEN, NOW OPEN AMERICA…
Here is a summary of the latest in the COVID-19 situation in Texas as of 6/20/2021.
Given the evidence of the situation and questionable results of mandates and restrictions by governments at every level, Gov. Greg Abbott lifted the state restrictions on March 10, 2021 and local restrictions on May 21, 2021.
More on TX DSHS Covid-related data here.
Closing Thoughts
Here is a great quote by one of my favorite economists:
My prayers this week are focused on the following verse:
Thank you for reading this newsletter and sharing it with your network. I pray that we will read the Bible and find our royal identity in Christ so that we can prosper and succeed in all we do. Many blessings to you and yours, and have a prosperous week.
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper