Free Republic

As an economist, I have written extensively about the Swiss debt brake as a potential solution to the U.S. debt crisis. The United States is experiencing debt fatigue and must enact new fiscal rules to restore sustainable debt levels at both the national and subnational levels. The Swiss debt brake has proven to be the most effective set of fiscal rules in accomplishing this objective, cutting debt burdens in that country by half. The Swiss debt brake has been the model for more effective fiscal rules, adopted by European nations and the European Union. The Swiss debt brake, whcih assures a...

Subject: Solution to Student Debt Problem. Dear Mr. President, Young Americans have been encouraged to "go to college" and "get a degree" so they can get a good job. Unfortunately for many universities have become debt traps. They entice students and their parents with resort level amenities and tales of high paying jobs for graduates but deliver miseducation steeped in Marxism, discourage independent thought and reasoning, and deliver years and years of debt. Universities continue to raise their fees as the quality of their programs diminish. I believe the massive overhead of student debt is an existential threat to our...

Michigan, New York received most benefits per worker under program that expired July 31, Wall Street Journal analysis shows The federal government spent nearly $250 billion on extra $600-a-week unemployment benefits from early April to the end of July, the Labor Department said, as millions of workers were laid off because of the coronavirus pandemic. Workers who permanently lost their jobs, were furloughed or had their hours cut were able to tap $600 in federal unemployment benefits on top of the amount they qualified for from the state, under a relief law Congress passed and President Trump signed in March....

WASHINGTON - President Donald Trump signed executive orders Saturday for coronavirus economic relief, upending negotiations with Congress after lawmakers failed to reach a deal on Friday. The executive orders establish a payroll tax holiday through the end of the year for Americans earning less than $100,000 a year. They also defer student loan payments through the end of the year; continue eviction moratoriums; and extend enhanced unemployment benefits that expired last week, but at a reduced level of $400 instead of the prior $600. "If I'm victorious on November 3rd, I plan to forgive these taxes and make permanent cuts...

President Trump says he will sign an Executive Order to ease the suffering of those harmed by the pandemic-related shutdowns and to stimulate the economy. Congress has failed to agree on a new package to accomplish these things. Trump’s Executive Order would include these four components: (1) a payroll tax holiday until the end of the year, (2) an extension of enhanced unemployment benefits until the end of the year, (3) an extension of the eviction moratorium for federal subsidized housing, and (4) a suspension of student loan payments until further notice. Questions surround the legality of accomplishing at least...

Rep. Ken Buck told Just the News that the national debt is $30 trillion when the actions that the Federal Reserve has taken during the pandemic are factored into the total. "This troubles me greatly but all I see is more spending. So how high do we get? We are going to continue to spend until the markets say enough is enough and nobody buys the bonds and then we have the cliff that we go off of," Buck said during an exclusive interview. "So I hope long before then we act responsibly and dial this back. But the reality...

China is helping Saudi Arabia develop its nuclear facilities amid fears recent advances are a sign that Crown Prince Mohammed bin Salman's chilling threat that the kingdom could develop nuclear weapons might become true. The Wall Street Journal reported this week that China is working on the development of a facility in Saudi Arabia that could extract uranium yellowcake from uranium ore, a huge shift in Riyadh's well-publicised civilian nuclear programme. In a highly enriched state, Yellowcake can be used in the development of nuclear weapons. The facility is believed to be located near the northwest Saudi city of Ula...

Over the past two decades, most states have experienced debt fatigue, allowing debt to increase to levels that exposes them to default. When the ratio of debt to personal income exceeds 10 percent, states risk default on their debt. In our research we designed new fiscal rules called “debt brakes” that can constrain the growth in spending and restore sustainable levels of debt. We explore the potential impact of the debt brakes in the different states. States have responded to the risk of default quite differently; we distinguish between red states, blue states, and Zombie states. Red states are states...

President Trump suggested this week the next coronavirus relief package could include a direct cash payment for American families that's potentially higher than $1,200. "It may go higher than that actually," Trump during an interview Wednesday with ABC affiliate KMID in Texas. "I'd like to see it be very high because I love the people. I want the people to get it."

We live in a test tube of democracy right now where the age-old adage “deficits don’t matter” is being examined. Back in 2004, Vice President Dick Cheney was reported to have said that phrase to Bush Treasury Secretary Paul O’Neill when he worried that budget deficits posted a threat to the economy. Cheney shot back, according to a Chicago Tribune story from 2004, "You know, Paul, Reagan proved deficits don't matter. We won the midterms [congressional elections]. This is our due." Debt has become a threat to democracy, because elected politicians are spending us into a potential debt crisis.We are seeing record...

More than three years ago, we explained why "the fate of the world economy is in the hands of China's housing bubble." As we said at the time, "China has always been a serial bubble inflator courtesy of a closed (capital account) economy, and nearly $30 trillion in bank deposits [$40 trillion as of July 2020] which slosh from one asset class to another, be it the stock market, bitcoin, commodities, farm animals or - most often - housing. " Why is it so important for China to consistently reflate this bubble? The answer is simple: for China's middle...

(CNSNews.com) - As congressional Democrats push another multi-trillion coronavirus relief package, Sen. Rand Paul (R-Ky.) is warning we've run out of money. "Well, we have no money, Neil," Paul told Fox News's Neil Cavuto on Tuesday. "There's no rainy day fund. There's no savings account. It's not like we go over to the Federal Reserve, open the safe, and we find out, oh, we have all this money we can give to people. "The $3 trillion we have already sent to people because of this government-mandated depression has been borrowed. Where are they going to get another trillion dollars? They're...

According to the IMF, global fiscal support in response to the crisis will be more than 9 trillion US dollars, approximately 12% of world GDP. This premature, clearly rushed, probably excessive, and often misguided chain of so-called stimulus plans will distort public finances in a way in which we have not seen since World War II. The enormous increase in public spending and the fall in output will lead to a global government debt figure close to 105% of GDP. If we add government and private debt, we are talking about 200 trillion US dollars of debt, a global increase...

This November, the Dallas Independent School District will ask voters to approve a shocking $3.7 billion bond—on top of their outstanding $2.5 billion debt, which they haven’t finished using yet. They propose spending $40 million of this not in the classroom, but to support Democrat policies like “immigration services.” "It is our responsibility to use the 2020 bond funding to right the wrongs of our past,” said Michelle Prudhome-Coleman, director of Dallas ISD’s Racial Equity Office. The district’s presentation mentioned “unfair distribution of financial, educational, and material resources” in the past. This bond is unique because, unlike other bonds, the...

Fitch Ratings has downgraded Canada's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'AA+' from 'AAA'. The Rating Outlook is Stable. KEY RATING DRIVERS The rating downgrade reflects the deterioration of Canada's public finances in 2020 resulting from the coronavirus pandemic. Canada will run a much expanded general government deficit in 2020 and emerge from recession with much higher public debt ratios. The higher deficit is largely driven by public spending to counteract a sharp fall in output as parts of the economy were shuttered to contain the spread of the coronavirus. Although this will support recovery, the economy's investment...

China’s economy was slowing drastically last year before the coronavirus outbreak in Wuhan. There were multiple signs that China’s economy was in horrible shape. Today we provide a couple more examples. In December 2019 we reported you can feel it in Hong Kong. The economy is sluggish. We reported for months that President Trump had the US in the position that it could only win in a trade deal with China and he did.We reported in a post in August 2019 that President Trump recognized that China is in an all out war with the US in regards to information...

Mainland Chinese firms invested $72.2 billion in Africa between 2014 and 2018, much of it through the Belt and Road Initiative. Now that Covid-19 has struck, there is a growing sense of unease in Beijing over calls to write off debt to stressed African states.

In April 2019, analysts at Rhodium Group in Hong Kong sat down to assess the financial viability of China’s Belt and Road Initiative (BRI). What they found surprised them. The second Belt and Road Forum had just wrapped up in Beijing and policymakers in the mainland and beyond were starting to voice their concerns. Western leaders feared that China was drowning the emerging world in general, and Africa in particular, in a new wave of debt. Officials in Beijing pushed back against charges of ‘debt-trap diplomacy’, but they were beginning to stick.China had internal reasons to fret. From the outset,...

NAIROBI, Kenya — When Chinese engineers flew home in January for the Lunar New Year, few in Africa would have imagined that coronavirus outbreak was about to ground planes, upend supply lines and freeze work on dozens of Chinese-built roads, railways, ports and power stations. Many of the engineers haven’t returned. Construction sites fell silent. And now the COVID-19 pandemic has unleashed a global recession that threatens the colossal international loan program that is a symbol of China’s growing prestige and a centerpiece of President Xi Jinping’s reign. The Belt and Road Initiative — China’s effort to finance nearly half...

The current U.S. budget deficit could soon exceed a record $4 trillion. The massive borrowing is being driven both by prior budget profligacy and a hurried effort by the Donald Trump administration to pump liquidity into a quarantined America. The shutdown has left the country on the cusp of a self-inflicted economic collapse not seen since the Great Depression. Americans may soon have to service a staggering national debt of about $30 trillion -- nearly $100,000 of debt for every American. Democrats and Republicans can blame each other, either for spending too much or for too little taxation, or both....