The hidden tax of inflation prevents people from getting out of poverty. Inflation isn’t just an inconvenience; it’s a huge obstacle to prosperity for the vulnerable and low-income. And even if Congress and the Fed have good intentions, their next steps could make the current bad situation worse.
The latest inflation data from the consumer price index shows an increase of 6.2% over the last year. This means that Washington took this out of your paycheck from no fault of your own or without you sending them a check. This sleight of hand is caused by the Federal Reserve built on the excessive spending by Congress and it crushes the hopes and dreams of many, especially the poor. If you received a raise recently, say around 8%, then about three quarters of it is not real—it’s inflation. The purchasing power of goods and services through your raise is cut by higher prices. If your raise was about 6%, normally a healthy increase, then your purchasing power doesn’t change. At this pace, prices are set to double in less than 12 years, but will your paycheck? People with lower incomes tend to receive smaller raises, and those on fixed incomes receive no raises or raises that just match inflation, such as those on Social Security. For them, inflation is the harshest of taxes and they can’t avoid it. Families with lower incomes have few assets like corporate stocks that can grow as prices rise. This inflationary blight on low-income earners is the Fed’s doing, but Congress gives the Fed the means to do it and it looks poised to double-down on its bad decisions. Congress has already authorized $7.2 trillion in spending since the shutdown recession, including much of the waste in the recent $1.2 trillion “infrastructure” bill. Now, the House’s Build Back Better Act would increase spending by $5 trillion, after appropriately excluding budget gimmicks, and increase the bloated national debt by another $3 trillion more than without it over a decade. This spending would likely be more expensive because the policies would destroy an estimated 7 million jobs by paying people not to work per economist Casey Mulligan’s estimates and reducing entrepreneurs’ investments based on the Tax Foundation’s assessment. And these job losses would most likely be concentrated among those with lower incomes. Increasing unemployment over time would make more people dependent on government, which may be a feature of the bill instead of a bug. Other proposals, like “green energy” projects and “incentives,” would increase the cost of living for everyone and hurt those with low or fixed incomes most because they’re least able to absorb it. And while the Congressional Budget Office could soon release their cost estimates for the BBBA, we should take them with a grain of salt as they could be too rosy because its static estimates have long been problematic, which is why it should move to more realistic dynamic scoring. Though Congress’ boondoggle spending doesn’t directly cause inflation, it provides the fuel to the Fed’s fire of printing more money. These progressive policies in Washington are crushing the poor, even as they’re providing tax cuts for the “rich,” and there doesn’t seem to be an end in sight—unless this this latest big-government bill appropriately fails. Impolitic government programs, like those in President Biden’s agenda, incentivize dependency on government and create cycles of poverty. Few things are more harmful than this because it cuts the rungs out of the ladder that many people use to climb out of poverty and better their lives, both financially and otherwise. These rungs of the ladder start with a job. Work is the only way to permanently earn more over time and improve human dignity that comes with financial self-sufficiency, community, and social capital. If Congress really wants to give people a hand up—and not just a handout—then it should focus on repealing those programs which disincentivize work and remove the tax hikes that disincentivize investment that goes to hire more workers. Likewise, if the Fed intends to improve the economy, it should focus on reining in inflation which it controls, not lecturing on diversity. These measures would help take the costly pressure off people, especially low-income earners instead of crushing them based on the president’s progressive agenda. We’d be wise to remember what Milton Friedman correctly said: “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” https://www.texaspolicy.com/judge-policies-by-their-results-progressive-policies-are-crushing-low-income-americans/ Overview: The COVID-19 pandemic and forced business closures by state and local governments over the last year left much economic destruction. Many Americans have been recovering as we near herd immunity and states reopen, but fiscal and monetary policies out of D.C. are distorting economic activity and the labor market. For example, the labor market has been improving at a slower pace in recent months, even as there has been at least $6 trillion in passed or proposed bills during the first 100 days of the Biden administration. The federal unemployment “bonuses” and even more in handouts have reduced incentives to work, resulting in a similar number of unemployed as the record high of 9.2 million job openings. Although the economy has withstood these headwinds for now, a pro-growth approach is necessary. Texas’s economy is improving after the destruction from the pandemic and forced business shutdowns. The opening of the economy on March 10, 2021, helped bring some normalcy as many return to work, excessive government restrictions cease, and civil society improves. This normalcy is supported by wins regarding fiscal and regulatory policy and paths to opportunity by the 87th Texas Legislature during the recently completed session, and more successes may be realized during the special session called by Governor Greg Abbott. A key initiative will be to promote more pro-growth policies that reduce spending, taxing, and regulating in order to increase prosperity and withstand Washington’s anti-growth policies. Full article The COVID-19 pandemic and forced business closures by state and local governments over the last year left much economic destruction. Many Americans have been recovering as we near herd immunity and states reopen, but fiscal and monetary policies out of D.C. are distorting economic activity and the labor market. For example, the labor market has been improving more slowly in recent months even as Congress recently passed the American Rescue Plan Act (ARPA), which led to fewer people wanting to work due to more unemployment “bonuses”—up to $1,200 per month—and even more in handouts. This has contributed to a record high of 9.3 million job openings with a similar number unemployed. Fortunately, the economy continues to withstand these headwinds for now, which is why a pro-growth approach is necessary. Full article Texas’s economy continues improving from the challenges of the COVID-19 pandemic and forced business shutdowns by government since spring 2020. This includes robust job creation in March 2021 as state restrictions ended on March 10, which should further improve economic growth and job creation this year. To help overcome the challenges still facing many struggling Texans and the assault on prosperity by those in D.C., Texas should commit to the Foundation’s Responsible Recovery Agenda. More on the data and how Texans can get back to work as quickly and safely as possible ⬇️ Many Americans continue recovering from the recession that began in March 2020 due to the COVID-19 pandemic and forced business closures by state and local governments. The economy had expanded in the second half of 2020 as many of those governments removed or reduced restrictions on the private sector. However, the growth stalled a little at the beginning of 2021 as many governments re-imposed restrictions as cases and hospitalizations spiked. Fortunately, those governmental restrictions have been reduced again and the economy looks to have picked up, helping Americans regain the tangible prosperity experienced until March of last year. We need more openings and pro-growth policies to let people prosper. Texas’s economy continues improving from the challenges of the COVID-19 pandemic and forced business shutdowns by government since spring 2020. More on the data and how Texans can get back to work as quickly and safely as possible ⬇️ Many Americans are recovering from the economic destruction that started in March 2020 due to shutdowns by state and local governments in response to the COVID-19 pandemic. The economy has improved, but the pace has slowed because of increased restrictions by many state governors making it more difficult to regain the tangible prosperity experienced last February. I highlight data on economic growth and employment and provide pro-growth policy recommendations to help quickly recover. More on the data ⬇️ It feels like there’s hope on the horizon. As Gov. Abbott said in his recent State of the State speech, “With each passing day of more vaccinations and increased immunity, normalcy is returning to Texas.” The Texas economy is recovering and at long last, some normal activity is returning. We’re not out of the woods yet, but we can at least see a clearing ahead.
Yet too many Texans could be left behind. “The situation in the Houston area is particularly desperate, with almost half of residents struggling to pay basic expenses in the week ending Dec. 7, according to a Census Bureau survey,” Pew reports. Lawmakers can help, but the help must be the right kind. History shows that our poorly designed welfare system traps too many people in poverty or near-poverty. Economists like me will tell you that people respond to incentives, and the welfare system disincentivizes self-sufficiency. So, the best response is to unleash opportunities for people to prosper. We can reverse those incentives and show our fellow Texans that they can achieve their American dream. How? Through what we’re calling the Opportunity Project that provides a path to dignity, self-sufficiency, and prosperity. Let’s start with more effective training for better jobs. We can tailor our state’s workforce development efforts more narrowly to the jobs that are out there and the skills that are needed. Texas is a prosperous state with many job opportunities, but a portion of the populace lacks the skills necessary to get and keep these jobs. But we know what helps. Welfare-to-work programs, with the vital participation of the private sector, can change lives. Generally speaking, such programs target disadvantaged populations, provide training in a marketable skill in addition to “soft-skills” instruction, and offer wraparound services (such as child care, transportation vouchers, housing assistance, etc.), job placement services, and follow-up services to help graduates stay on a path to success. One example is the earn-while-you-learn program established by the Texas Federation for Advanced Manufacturing Education (FAME) in San Antonio. The employers in the consortium offer a competitive wage that gives program participants the safety net they need to leave low-paying jobs or welfare. The payoff for employers is a steady stream of well-qualified workers. Next, let’s lower barriers to entrepreneurship by rolling back restrictive regulations like occupational licensing. Nationally, nearly 22 percent of jobs require an occupational license. That makes sense for doctors, but many other occupations are questionable at best—such as cosmetologists having to complete 10 times more days of training than EMTs. And it’s not just the silly licensing rules; many licensing schemes exclude those who have a criminal conviction. We believe in second chances; that should also apply to occupational licensing, especially when the license has no direct relationship with the long-ago crime. Finally, where we can, we must keep the existing welfare system from unintentionally trapping people in a life of helplessness. Welfare should be reprioritized to count as “successes” those who move off and stay off it rather than those enrolled. We can streamline and simplify the sign-up process and implement efficiency audits of programs to ensure those Texans who need help receive it, while clearly defining the pathways out of welfare dependency. Where the system creates a welfare benefits “cliff”—in which families lose benefits arbitrarily or too quickly when they re-enter the workforce—we should demand a smoothed approach that doesn’t disincentivize work. Of course, a strong and vibrant economy is key to making this work. Gov. Abbott made this point: “Texas has been ranked the number one state for business for 16 straight years. For the past eight years, we led the nation in economic development, and we have led America in exports for 18 straight years. The Texas model. It inspires entrepreneurs and innovators and attracts job creators from across the entire country.” Strengthening the Texas Model is the best way to uphold this, with lower taxes (and no personal income tax), fewer unnecessary regulations, and a commitment to limited government. This framework provides more economic freedom and greater opportunity for all Texans. The COVID-19 pandemic isn’t over, but recovery is on the way. Let’s work to assure every Texan can participate when the economy opens and thereafter. https://www.texaspolicy.com/opportunity-project-leaving-no-texan-behind/ In this newsletter, I discuss many improving COVID factors in TX, TX Legislature's budgets, TX jobs report, Janet Yellen's fiscal philosophy, President Biden's first few destructive days, & more.
https://vanceginn.substack.com/p/optimism-through-grace In this newsletter, I share my thoughts on TPPF's recent Policy Orientation, the start of the 87th Texas Legislature, Biden's $1.9T COVID bill, the economic and fiscal situation, and much more.
https://vanceginn.substack.com/p/keep-texas-texan-tppfs-policy-orientation In this newsletter, I share my thoughts on the recent events in DC, the upcoming legislative session in Texas, the increased harm to families from government lockdowns, and the need for competition.
You can read this newsletter and register to receive it weekly at no charge here: vanceginn.substack.com/ The Texas economy continues recovering since the steep downturn due to the COVID-19 pandemic and business shutdowns by state and local governments in spring 2020. Tailwinds could be strong in 2021 if the government removes restrictions and follows responsible fiscal policy so people are free to live and earn money. I had a blast discussing free-market economics and sound fiscal policy in an era of business shutdowns & fiscal insanity by governments with Brad Polumbo on his podcast "Breaking Boundaries." Here's an overview of our discussion: Former White House economist and current Texas Public Policy Foundation chief economist Vance Ginn joins the show to break down the $3 trillion+ in taxpayer money Congress has spent on "stimulus" and the shortcomings of this Big Government approach to revitalizing the economy. Can you spend your way out of shutdowns? How have Congress's key stimulus initiatives, from unemployment expansion to the Paycheck Protection Program to stimulus checks, worked out? And what about the push for more future $2,000 stimulus checks? We discuss this and more—like Vance's hot take on how best to consume meatloaf. Follow Vance on Twitter: https://twitter.com/VanceGinn. Subscribe to his newsletter: https://vanceginn.substack.com/. Check out his work for TPPF: https://www.texaspolicy.com/about/sta.... Follow Brad on Twitter: https://twitter.com/brad_polumbo. Follow Brad on Instagram: https://www.instagram.com/bradpolumbo/. You can watch our episode at the link below and subscribe to his podcast here: https://apple.co/35ET311 Read my full newsletter with charts and subscribe here.
Hello Friend! As 2020 nears an end, I’d like to start this newsletter a bit different to share some personal things about me that you might not know. We will then get into the many things that have happened since the newsletter last week. Here are the highlights of my life’s journey so far:
TEXAS ECONOMIC AND FISCAL SITUATION Texas’ Legislative Session Starts Jan. 12: More to come on this soon! I’m looking forward to TPPF’s Policy Orientation on Jan. 13-15 that will be live-streamed, so I’ll be sure to add info about it later. Read the entire newsletter here: https://vanceginn.substack.com/p/fiscal-insanity-dc-disappoints-again Hello Friend!
I hope you had a blessed Christmas. My family did as we celebrated Jesus’ birth and his eventual death on the cross for our sins. That salvation came at a great cost, yet another example of how nothing is free. We’re now relaxing after a great day playing outside with our boys and hanging out with friends. Those moments are priceless. What’s not priceless is the latest $908 billion COVID aid bill along with the omnibus that’s combined to be over $2 trillion and appropriately called the “coronabus” given how much pork is in this package. I’ve been calling it “CARES 3.0” because there was the original bill and another bill that added funding to the programs created in the original bill, so this is really the third bill that’s funding many of the same things. And that’s part of the problem, as it comes with a huge cost and President Trump is correct to hint at vetoing it. However, the President’s reasoning seems to be to increase the amount in checks to individuals from $600 to $2,000, which would push incomes well above where they were before the pandemic and provide income to many individuals who weren’t influenced much if at all from the shutdown. This is likely the case for you and me, as we are able to work from home or have savings to live on for a while to deal with this situation. I get the point of advocating for more in a check to individuals as it appeals to struggling Americans and balances some of the atrocities in this monstrosity of a bill, but that doesn’t make it good policy. This notes the importance of work flexibility along with saving for a rainy day but also notes the huge cost to those who aren’t in this boat. Unfortunately, too many have and will continue to fall through the cracks of our economic lifeline that should ultimately be improved by moving toward more capitalism and away from socialism. While civil society should be first to help those in need, governments will play a role though hopefully a more limited one as it assists those who can’t be helped otherwise (last resort). This would help improve our bloated, ineffective safety net system that often just expands bureaucracy and helps too many of those the programs were not intended. Thanks again for reading! I’m truly grateful for you continuing to read this newsletter. As 2020 comes to a close, we have much to accomplish to find opportunities to let people prosper. If you haven’t signed up for my newsletter yet, please register here at no charge. And follow me on Twitter: @vanceginn. Have a Happy New Year if I don’t write another newsletter before then, which I may given how things go in D.C. Until then, many blessings to you and yours. Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper Read the full newsletter with figures and subscribe here.
Hello Friend! Can you believe that Christmas and New Year’s are right around the corner? It’s hard for me to believe. We put up our Christmas tree early this year to get into the spirit of celebrating Jesus’ birth and the salvation and grace provided to us through a huge price (Nothing is Free), and this spirit has helped drown some of the negativity going on in the media regarding COVID, the election, and more. I have a lot of what I consider uplifting points to share with you below. It’s important to remember that we live in the most prosperous, most remarkable, and most opportunistic country in the history of man. Sure, there’s much we need to do to improve it because too many have fallen through the cracks, but we have much to be positive about even as the media and many politicians tell us otherwise. So, get your optimistic cap on and maybe grab your favorite drink so you can imagine me telling you the following story. Enjoy! Have a blessed weekend and a Merry Christmas and Happy New Year in case I don’t see you or write another newsletter before then. I’m truly thankful for you and for your interest in reading this newsletter. My only request is that you share this newsletter with at least one of your friends and ask them to register. That would be a great gift! Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper Read full newsletter with figures and subscribe here.
Hello Friend! I hope you had a blessed Thanksgiving however you chose to celebrate it. I had a nice time with my family from Houston at our place in Round Rock and then a nice time with my in-laws in Port Aransas, which is on the beach near Corpus Christi, Texas. The picture below is of my youngest son playing in the water. It’s been an interesting time that’s normally spent with family. But many have decided not to do so, which is a decision that should be left to individuals instead of politicians trying to tell people how to act. One thing that I’ve been concerned about is missing time with my family and friends and never seeing them again—for many reasons. The COVID-19 situation is serious and one that should be taken seriously, as noted in my previous newsletter, but it is also a situation where I have taken time to grow closer to God, family, and friends when so much else seems to be uncertain. This has given me calm during this storm as I know that these relationships are what matter over time while the novel coronavirus is just a blip in the long run scheme of things. Of course, the repercussions of authoritarian forms of government interventions may last much longer, which is something that we must continue to push back on when necessary. To be frank, I think we should open Texas and all states, as the shutdowns were a mistake, and instead do what should have been done in the beginning and have the government play an informational role to provide guidance on best practices while targeting resources to vulnerable populations and areas as I outlined in a recent commentary at the Austin American-Statesman. I say this with a great deal of humility as there are many factors that go into making these decisions and I understand that I could be wrong. But I also believe strongly in the power of liberty and allowing individuals, families, and entrepreneurs in an inclusive institutional framework (like the Texas Model) to find the best path to dealing with these sorts of crises rather than the government. Thanks again for reading! I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper. Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper Read the full newsletter with charts and subscribe here.
Hello Friends! Thank you for reading my Let People Prosper newsletter! Please keep sharing it with others who may be interested in our productive discussions. Many thanks in advance! I hope you have a fantastic week of finding things to be thankful for as we approach Thanksgiving. May you be blessed with good health, prosperity, and wisdom every day. Keynote Speech: I enjoyed the opportunity to give the keynote speech at the Free Market Institute at Angelo State University on Tuesday, November 17. This presentation was part of the Free Market Institute at Texas Tech University's Public Speaker Series, where I explain the economics of how institutions, tradeoffs, and policy matters when dealing with this situation. You can watch and view my slides at the link in my tweet below. I included a number of slides in my presentation that walked through where we were before COVID-19 hit, where we have been since it hit, where we are now, and where we should head.If you have any information to share along these lines, please send my way. Also, please unsubscribe at any time. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper. Have a blessed week of thanksgiving. And try to educate yourself on things to tame your fear, and focus instead on your spirit of power, love, and self-discipline. Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper Read the full newsletter with figures and subscribe here.
Hello Friends! Thank you for reading my Let People Prosper newsletter! Please keep sharing it with others who may be interested in our productive discussions. We’ve got a lot to accomplish together, so I need your help in growing my subscribers. Many thanks in advance! Humble Yourself: This is an important reminder given the rise again in many politicians’ desire to do something like lockdowns to deal with rising COVID-19 cases but nothing or something much more targeted is best. We can learn a lot from economists Friedrich Hayek and John Maynard Keynes, but more importantly from the Bible. If you have any information to share along these lines, please send my way. Also, please unsubscribe at any time. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper. Have a blessed rest of your weekend. And remember to humble yourself this week. Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper Read the full newsletter with charts and subscribe here.
Hello Friends! Thank you for reading my Let People Prosper newsletter. Please keep sharing it with others who may be interested in our fun discussions. Here’s my personal website, which has my academic work, and my employer TPPF’s website. If you like this information and would like daily updates from scholars on more issues, sign-up for TPPF’s The Cannon newsletter. Before we get going, I’d like to share with you two things that I was thrilled to be a part of this week.
If you have any information that I should see, please send my way. Contact me at any time. Also, please unsubscribe if you’d rather not receive this personal connection. I hope this newsletter is marginally beneficial to you and will help us to find opportunities to let people prosper. Blessings to you and yours, Vance Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper Read the full newsletter with charts and subscribe here.
Hello Friends! Thank you for reading this latest edition of my Let People Prosper newsletter. Given this is the third entry of the new newsletter, I’d like to again welcome many new subscribers. Thank you! Please keep sharing this with your friends and family who may be interested in our fun but hopefully educational chats. And you can share with them more info about me on my personal website or where I work at the Texas Public Policy Foundation. Also, if you like this information and would like daily updates from TPPF scholars on more issues, sign-up for TPPF’s The Cannon newsletter. Are you ready? That reminds me of one of the songs from my favorite band growing up, Korn. Did I mention that I’m a drummer who played for a hard rock band for a few years in Houston? I probably haven’t yet. When you have time, check out my YouTube video where I tell my story of failures and how I got into economics to help people prosper that has supported much success over time. I hope that this information provides insights that reveal how nothing is free. Most of you have heard me say this often as there are always tradeoffs in a world of scarcity, whether those costs are explicit or implicit, such as opportunity costs. If you have any information that I should see, please send my way. Contact me at any time. Also, let me know if you’d like me to take you off this list. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper. Have a blessed week. Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper Read the full newsletter with charts and subscribe here.
Hello Friends! Thank you for reading this latest edition of my Let People Prosper newsletter. Given this is the second edition of the new newsletter, I’d like to welcome many new subscribers. You can find out more information about me at my personal website www.vanceginn.com and where I work at the Texas Public Policy Foundation here. Today’s newsletter is going to be longer than usual because I’m including prior insights that I’ve provided this year so we’re on the same page. These will be in three sections: Open Texas and America, Texas Economic & Fiscal Situation, and U.S. Economic & Fiscal Situation. If you like this information and haven’t subscribed yet, please do so here. Is you would like daily updates from TPPF scholars on more issues than these, sign-up for TPPF’s The Cannon newsletter. Okay, enough of the introductory stuff, let’s dive into what’s been going on lately in economic and fiscal issues so we can find ways to let people prosper. Of course, I’ve been making these arguments and more at the Twitter handle @vanceginn, so check me out there as well. If you have information that I should see, please send my way. Contact me any time. Also, let me know if you’d like me to take you off this list. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper. Blessings to you and yours, Vance Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper Overview: Many Americans are recovering after the economic destruction that started in March from the COVID-19 pandemic and lockdowns by state and local governments. While the economy and labor market continue to improve, the policy recommendations outlined here would help speed up that process so America can quickly return to the prosperous conditions of February. https://www.texaspolicy.com/the-ginn-economic-brief/ Read my newsletter with charts and subscribe here.
Hello Friends! I hope you've had a blessed week. There's quite a bit to report in this newsletter. Please be sure to share this write-up with others who may be interested and ask them to sign-up for the newsletter. Now sit back, relax, and enjoy a quick overview of sound fiscal policy and free-market economics from yours truly. Read the newsletter and subscribe here: vanceginn.substack.com/ Have a blessed weekend. Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper |
Vance Ginn, Ph.D.
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