In typical adolescent fashion, Congress and the administration didn’t get a debt limit bill until the last minute, knowing of a rough deadline last fall.
That something would pass wasn’t the question—really. The general media, as accomplices to the Democrats and the far left, talked incessantly about “default,” which was never the question. Default properly refers to paying interest on the debt. The Treasury could keep doing that without difficulty for months by putting IOUs in retirement accounts or delaying reinvestments. But threatening “default” is an attempt to portray Republicans as mean, irresponsible scofflaws who won’t pay their bills. Anything to distract from the problems forced by profligate spending and wealth redistribution.
The debt ceiling bill did not provide all the spending cuts and regulatory relief the House bill called for, but at least it was something, given that President Joe Biden refused to discuss anything for months. But Newt Gingrich, former speaker of the House, pointed out that the 1% ceiling on spending negotiated was a ceiling, not a floor, and some further cuts through House appropriations are still possible.
While the Supreme Court of the United States (SCOTUS) decision on California’s Proposition 12’s restrictions on raising pigs, veal calves and chickens was not what livestock producers had expected and hoped for, dissenting opinions (Chief Justice John Roberts and Justice Brett Kavanaugh) reveal there are other possible legal paths to challenge and beat that law. That needs to be sooner rather than later, before the Humane Society of the U.S. turns its guns on restricting cattle feeding.
The Court did slap down the Environmental Protection Agency on Waters of the U.S. in the Sackett case. Put together with the West Virginia decision curtailing government agency overreach, this court more guided by the Constitution is helping business, especially agriculture, construction and energy, to function like businesses, not vassals of leftist environmental zealots with death wishes for Western civilization.
SCOTUS also ruled in favor of a 94-year-old woman who was turned out of her condo for overdue taxes, with the county then selling the property and keeping the excess sale proceeds. The court ruled the county had the authority to seize and sell the home, but keeping the excess was a taking that could not be allowed under the Constitution. The Pacific Legal Foundation, who represented the woman, warned 21 states their similar laws need fixing.
Of the 339,000 new May jobs, the leisure and hospitality sector—including restaurants—added 48,000. While still short numbers pre-pandemic, the sector continues to add more workers, suggesting one reason beef demand has held up relatively well is restaurant patronage. People are still eating out.
The labor force participation rate is still below pre-pandemic levels, at 62.6%. There are over 1.5 jobs available for every worker. The Competitive Enterprise Institute (CEI) holds that the Fed overreacted to the pandemic and hyper-stimulated the economy with a 40% boost in the money supply.
“It is mainly because the pre-Covid economy was so healthy that it has withstood the battering of a pandemic plus bipartisan binge-spending and regulating,” Ryan Young, CEI senior economist, said.
With the debt ceiling out of the way, permitting for both fossil fuel and renewable energy development should be a priority. The debt ceiling bill gave approval for a specific natural gas pipeline in West Virginia that Sen. Joe Manchin (D-WV) championed. That pipeline is nearly finished but enviro-zealots’ lawsuits have tried to revoke permits granted long ago. The overall permitting bill promised Manchin by Biden and Senate Majority Leader Chuck Schumer (D-NY) has yet to materialize. The West Virginia pipeline was included to make sure the debt ceiling bill would get Manchin’s vote.
The big concern this summer will be the economy, with the Federal Reserve perhaps pausing interest rate increases in spite of strong job numbers and an economy that has refused to fully buckle. Consumers are sticking to necessities and using credit cards to maintain spending. Economists are still concerned about a possible recession. Inflation has cooled somewhat but the Fed’s interest rate increases have not yet taken full effect.
I agree with economists who say the Fed is focused on the wrong target by trying to beat down demand—a strategy more likely to trigger a recession. Economist Art Laffer believes the proper goal is to boost growth—the supply side—not depress demand. Cutting taxes and regulations boosts productivity and wage growth and gets the economy producing revenue, products and services, jobs and more tax revenue from lower rates but larger GDP. The Fed should not use job numbers as a guidance target, he said.
No one fully explains this economy. — Steve Dittmer, WLJ columnist
(Steve Dittmer is the author of the Agribusiness Freedom Foundation newsletter. Views in the column do not necessarily represent the views or opinions of WLJ or its editorial staff.)
