Quote of the Day:
President Donald Trump’s budget is at once madness and genius.
–Economist Peter Morici
I guess if you are President Trump and receive so must hostility from the media, being called a mad genius is a compliment.
In a column headlined "Trump's Mad Genius Budget Cuts the Bloat that Is Strangling Us," economist Peter Morici offers some fascinating thoughts on the proposed budget:
It reaches far beyond what Congress will approve and defies what economics textbooks say should happen. However, if its essential provisions are preserved, the plan would avert fiscal calamity, and restore prosperity and hope for the nation’s most struggling citizens.
At its core, it proposes to cut the bloat in discretionary government programs and entitlements — things voter-pandering moderate Republicans and liberal Democrats are wont to protect — and balance the budget.
Keynesian economics says the latter should tank the economy. However, government profligacy has its stimulative limits. Spending and taxing can go beyond boosting demand to strangling supply by killing the very will to work and invest.
Trump’s budget strikes the steel stake at midnight to the heart of this vampire.
Where will the cuts come?
The Trump budget leaves intact essential benefits to seniors—old age pensions and Medicare—but goes after programs like food stamps, Medicaid and Social Security disability programs. These were originally intended to aid poor children, mothers and the genuinely infirm but thanks to changes in laws and enforcement in the wake of the financial crisis, those have been opened to able-bodied adults—even those who refuse to work.
But won't the Democrats scream that the budget will harm the poor? Sure, but . . .
Be clear—Trumps cuts are not aimed at denying poor infants their formula or sustenance to their mothers!
The history of introducing work requirements into food stamps and welfare indicates that those move people off the rolls or at least make them less dependent on handouts. Workforce participation and incomes go up and poverty goes down.
Sometimes less does equal more!
Morici's article is well worth reading.