Charles’s Note: The most depressing thing about our political debates today is their utter futility.
Our ostensible leaders of both parties fiddle while our finances burn.
As my fellow libertarian traveler Bill Bonner of Bonner Private Research notes today, the surge in tariff revenues hasn’t made a dent in the budget deficit.
In fact, the deficit grew by 19% last month as spending hit a new monthly high.
Why do we even bother with budgeting?
Or elections, for that matter?
It’s all imaginary money conjured out of the void.
And no matter whom we vote for, it all seems to get spent on bombs for another country.
What if… and here’s a novel idea… we required Congress to balance the budget every year?
If Congress actually had to have the money upfront – or go to the taxpayers hat-in-hand to ask for it – they might send less of it to countries that most Americans would struggle to find on a map.
Brown University estimates that the U.S. has sent Israel alone $17.9 billion in military aid over the past two years.
Uncle Sam provides military aid to at least 133 countries (that we know of), including strategic allies like Vanuatu and Malta.
Did you know that Malta had an army?
Me neither!
But apparently it matters enough to our collective security to warrant a check every year.
Congress won’t be balancing the budget any time soon. I’m statistically more likely to take the Lakers starting point guard job from Luka Doncic.
But we can dream…
At any rate, read what Bill thinks about all of this. He’s been connecting the dots for longer than I’ve been alive, steering his readers away from financial ruin.
Besides, he’s a real pleasure to read.
On to you, Bill!
Smooth Sailing
Bill Bonner, Bonner Private Research
Uh oh. In the fight between virtue and vice, it looks like our fav congressman is going down.
The Washington Examiner:
Pro-Israel Billionaires Spent Over $1.5 Million in 38 Days to Oust Thomas Massie
Polling shows him running way behind the candidate Trump/AIPAC paid for.
Massie made a good point in a recent interview. It’s not just Trump and the Israel lobby he’s up against… it’s America’s firepower industry too.
They all want more of the public’s money.
But it’s worse.
Massie is up against the whole system of fake money and inflated prices. Anyone who stands in the way is marked for elimination.
Massie: “The Pentagon provides Congress with a handy map showing all the districts where defense industries are located and all the jobs they create.”
That is what we see. What we don’t see is all the jobs, incomes, sales, and earnings taken from elsewhere.
Every pound of steel used to make a tank is not used to build an HVAC system. And even if the money is fake — “printed” and borrowed — it still is used to buy real resources that must come out of the real economy.
Which brings us to our question for today: What is it we’re not seeing? What’s the rest of the story?
We see what is, not what could be… or ought to be… or will be.
A man takes a vacation to Milan, and misses the sights in Paris. Napoleon takes his soldiers to Moscow; they might have enjoyed the Cote d’Azur instead. A bomb goes off… and kills a man who might have found a cure for cancer.
We only know a small part of the story. And the part we think we know we see only through a glass darkly.
We are told, for example, that the tariffs are a big success because the revenue to the Treasury will reduce deficits and debt. In this case, the “more to the story” didn’t take long in coming.
CNBC:
U.S. Deficit Grows to $291 Billion in July Despite Surge in Tariff Revenue
The deficit for July was up 19%, or $47 billion, from July 2024. Receipts for the month grew 2%, or $8 billion, to $338 billion, while outlays jumped 10%, or $56 billion, to $630 billion, a record high for the month.
At this rate, expected revenues from tariffs, while substantial, will still be negligible from a debt reduction standpoint.
Until last week, Mr. Trump looked upon the job numbers as proof of a healthy economy. Then, when the numbers were revised downward, he claimed they were “rigged.”
Either way, the numbers prove nothing.
Some of the disappeared jobs might have vanished because industries feared the uncertainty of Trump’s unpredictable Big Man management. Others might have gone away because women are leaving the workforce.
Newsweek:
Hundreds of Thousands of Women Are Leaving the Labor Force
Or because the immigrants are packing up.
USA Today:
The country’s immigrant population may have dropped by roughly two million people in the first six months of the year, according to new government data.
And in the stock market, record prices prove that the Trump Team must be doing something right… right?
Stock prices are data. Facts. They don’t lie.
Reuters:
S&P 500, Nasdaq Hit Record Highs at Open…
But wait. What stories are stock prices not telling us?
Stocks in the U.S. are up almost 10% this year. But in Germany they’re up 35%. Has the Trump Team cost investors a 25% gain?
We don’t know. But congratulations may be premature. Like praising the captain of the Titanic for four days of smooth sailing… or Herbert Hoover for the remarkable stock market of the summer of 1929…
It might be wise to wait for the rest of the story.
Bill Bonner