bookmark_borderLong-COVID Persistent Virus With Long-Term Costs

By Daniel Brouse
August 20, 2024

A new study in Australia has found about $9.6 billion was lost in economic productivity due to long COVID in 2022. Researchers say that represented about a quarter of Australia’s real gross domestic product growth for that year.

With the U.S. having about 90 million more cases than Australia, the economic cost is likely around $90 billion higher just from lost productivity. Unfortunately, we continue to incur billions more in costs and millions more in new infections. And this estimate doesn’t even account for the additional costs of hospitalizations, deaths, and other impacts, which likely bring the total to trillions. On top of that, the U.S. government borrowed and distributed about $5 trillion in COVID-19 stimulus funds, so these costs are in addition to that.

I’ve been conducting experiments on hate and violence, and there’s a marked increase in extremism on both the far-right and far-left. Although my research is still in the early stages, it appears that COVID has likely intensified mental illness, exacerbated pre-existing neurological conditions, and impacted brain function. In a recent interview, lead scientist Raina MacIntyre explained that COVID affects every organ, though the symptoms aren’t always associated with long-COVID. Many patients unknowingly harbor the virus long after the initial infection. She also noted that in Australia, as well as globally, cardiovascular disease remains the leading cause of death at 2%. However, long-COVID is estimated to affect 2-3% of the population at the low end, and up to 20% at the high end. The scale of this problem is massive and continues to grow.

In an interview with ABC Australia, Professor MacIntyre said, “It’s not a nothing burger in children. It is a serious infection.” She said there were simple ways to minimize risk when it came to COVID-19 infections. “Using an air purifier, which is not very expensive, or opening a window if there is a window that can be opened, or wearing a mask.”

The study: The public health and economic burden of long COVID in Australia, 2022–24

The Impact of Hate on Political Perspectives and Social Cohesion

COVID-19 / SARS-CoV-2 / Novel Coronavirus

bookmark_borderElection 2024: The Decline of Economic Sensibility

I began writing this after listening to Harris’ recent speeches — first on drug prices and then on the broader economic policy of her campaign. My concerns arise from a general disappointment with the direction of the campaign’s economic strategy.

Unfortunately, the “deal to cut Medicare prices on popular drugs” is misleading. The claim of a 50% reduction in drug prices is based on the list price, which few people actually pay. Medicare already benefits from discounted rates, and this new legislation won’t have much impact on those prices. In truth, the new rule is unlikely to significantly affect pharmaceutical companies’ profits, which explains why their stock prices have remained stable. This legislation is more about political posturing than genuinely lowering drug costs for consumers.

Regarding the economic policy laid out in Harris’ second speech, blaming inflation on ‘corporate greed’ is a simplistic and misleading narrative that every serious investor and economist recognizes as nonsense. The real drivers of inflation are far more complex, with a significant portion—around 75%-85%—traceable to the Trump administration’s policies. Failing to accurately identify and address the true causes of inflation undermines the administration’s economic credibility. This misstep, coupled with the questionable drug price control regulations announced the day before, paints an increasingly concerning picture for the economy. Markets are already reacting negatively to these policy directions, which doesn’t bode well for the future. If possible, the campaign needs to adjust its messaging—because Trump’s policies would be even worse. After these two days of speeches, I’m seriously reconsidering my vote, and I’m not alone. Many others who prioritize the economy are having second thoughts as well.

When asked if I could ever vote for Trump, I replied: No, I would never vote for Trump. He stole money from our business ethics experiment back in the ’90s. If you read my papers on him, you’ll see that Trump is largely responsible for the current inflation due to his disastrous fiscal and monetary policies. However, I also can’t support Harris if she continues to advocate for policies that contradict basic economic principles. Protectionism, price controls, and tariffs are major red flags for the entire business community. My goal is to convey what the financial markets are signaling. Right now, they seem to prefer Trump’s lack of regulation over Harris’ market interventions. It’s troubling when markets lean towards Trump’s deregulation, despite the significant damage he’s caused.

A friend mentioned that Harris cited two major factors contributing to inflation: Trump’s mishandling of the pandemic and supply chain disruptions, along with ‘corporate greed’ and ‘price gouging.’ While Biden has supposedly addressed the first, Harris claims she’ll tackle the second. From an economist’s perspective, there are several issues with that viewpoint. My goal is to help Democrats win the election with solid economic facts, not alienate independents who were leaning towards supporting her. At the very least, it’s better to stay silent on certain points and ideally avoid catering to the base’s misguided notions. For example, avoid terms like ‘corporate greed,’ ‘price gouging,’ or discussions on ‘supply chain disruptions.’

My friend insisted that these issues are real and not up for debate. However, I replied that none of these things—’corporate greed,’ ‘price gouging,’ or ‘supply chain disruptions’ — are as straightforward as they’re often portrayed. Labeling them that way is misleading and oversimplifies the issues. Such terms are often used to incite the base rather than address the real, complex economic factors at play. I strongly suggest avoiding these simplistic labels as they risk alienating informed voters who recognize the deeper economic realities.

There is certainly a lack of economic understanding among Democrats, which is why I’m trying to provide some clarity. Corporate profit margins have remained relatively stable. The reason corporate profits seem to be at ‘record levels’ is due to inflation. As prices rise with inflation, the absolute dollar amount of profits increases, but the percentage of profits remains the same. As for prices coming down, that would indicate deflation, which is generally a sign of severe economic problems—not something we should hope for. Also, corporations are not capable of being ‘greedy’ by definition; attributing morals or ethics to non-human entities is nonsensical. Promoting these false and misleading ideas is detrimental to politicians, the economy, and only serves to sow division and hate.

Conclusion:
A friend asked me, “Okay, I hear you, but if you’re reconsidering your vote, who would you vote for?”

I replied that, as of now, I’m not planning to vote for either presidential or senatorial candidates. Both Harris and Casey have proposed highly detrimental economic policies, just as Trump and McCormick have. In my view, the Democrats have made a serious mistake in their messaging, turning these races into a battle of the bases.

Most importantly, neither party is addressing the most serious economic threat to humanity—climate change. While both sides sow division with false and misleading economic rhetoric, they are completely ignoring the accelerating impact of anthropogenic global warming. In fact, the policies proposed by both parties seem poised to exacerbate climate change, leading to a permanent decline in the U.S. economy and potentially rendering our planet mostly uninhabitable within a generation.

The Human Induced Climate Change Experiment

bookmark_borderWhy Cash is Not King

There are plenty of false and misleading memes circulating about using cash. There’s no direct harm to others in using cash, but it does come with greater risks, such as theft, the inability to track spending easily, and poor financial returns. That said, cash isn’t going away anytime soon. The real issue lies in the class warfare and the spread of false and misleading information. Propaganda that promotes fear or division, like suggesting that the use of digital payments is part of some nefarious agenda, distracts from more pressing issues. We should focus on facts and avoid being swayed by misinformation designed to sow discord. Perhaps just as important is that using cash is a poor financial decision. A wise investor keeps their money in the bank for an additional 25-30 days, earning interest, which can result in hundreds or even thousands of dollars in extra income each year. Teaching your kids to rely on cash isn’t a smart financial move. It can perpetuate poverty and misdirect anger toward big business and corporations instead of encouraging smarter financial decisions.

bookmark_borderClimate Science: Love and Hate

by Daniel Brouse
August 9 ,2024

As an economist, I have spent my career studying risk management, and in the process, I have also become a climate scientist—because climate change is the greatest risk to humanity. Climate science is closely tied to our emotions, particularly hate and love. The hatred of scientists and intelligence is one of the most significant factors contributing to the potential demise of modern civilization. If you’re over 8 years old, you should NOT be reposting memes. Most memes are generated by foreign actors (e.g. Russia) attempting to sow division through hate. Memes promoting class warfare, taxing the rich, and criticizing philanthropy are prime examples, as are those demonizing immigrants. If you’re under 8 years old, you shouldn’t be on social media at all. STOP REPOSTING HATEFUL MEMES.

The solution lies in increased education and LOVE.

From a paper I coauthored: The government’s actions, or lack thereof, reflect a dangerous combination of arrogance and ignorance, making worst-case predictions for climate change seem like best-case scenarios. Revised climate models now suggest that global temperatures could rise by as much as 9°C within this century, compared to earlier projections of a 4°C increase over the next millennium. Such a dramatic temperature rise could push Earth toward a “wet-bulb” temperature threshold, where the combination of heat and humidity makes it impossible for the human body to cool itself through perspiration, leading to potentially fatal heat stress.

What Can I Do?
There are plenty of things you can do to help save the planet: stop using fossil fuels, consume less, and love more.

Love has the transformative power to save the world in numerous ways:

  1. Fostering Connection and Unity: Love brings people together, transcending boundaries of race, religion, nationality, and ideology. By fostering a sense of empathy, compassion, and understanding, love promotes unity and solidarity among diverse individuals and communities. When people come together in love, they can work collaboratively to address shared challenges and create positive change on a global scale.
  2. Promoting Peace and Harmony: Love is the antidote to hatred, conflict, and violence. By promoting forgiveness, reconciliation, and mutual respect, love can help heal deep-seated divisions and promote peace and harmony within and between societies. When individuals and nations choose love over fear and hostility, they pave the way for peaceful coexistence and cooperation.
  3. Inspiring Empathy and Altruism: Love cultivates a sense of empathy and concern for the well-being of others. When individuals act out of love, they are motivated to alleviate suffering, promote justice, and advance the common good. Love inspires acts of kindness, generosity, and selflessness, creating a ripple effect of positive change that spreads throughout communities and across borders.
  4. Protecting the Environment: Love for the natural world motivates individuals to protect and preserve the planet for future generations. When people recognize their interconnectedness with all living beings and the delicate balance of ecosystems, they are inspired to adopt sustainable lifestyles, promote conservation efforts, and advocate for environmental stewardship. Love for the Earth compels us to take action to address climate change, protect biodiversity, and ensure a healthy and sustainable future for all.
  5. Empowering Social Justice: Love is inherently egalitarian, valuing the inherent worth and dignity of every individual. When people act out of love, they are committed to promoting social justice, equality, and human rights for all. Love drives efforts to dismantle systems of oppression, combat discrimination, and create inclusive societies where everyone has the opportunity to thrive. By standing up for justice and advocating for marginalized communities, love can help create a more just and equitable world for future generations.

In summary, love has the power to save the world by fostering connection and unity, promoting peace and harmony, inspiring empathy and altruism, protecting the environment, and empowering social justice. When individuals and communities choose love as their guiding principle, they can create a world where compassion, understanding, and cooperation prevail, paving the way for a brighter and more sustainable future for all.

The Human Induced Climate Change Experiment

bookmark_borderReal Estate Market Update

By Daniel Brouse
August 5, 2024

Short sellers in the real estate market are currently anticipating a significant downturn, driven by a combination of factors. The recent trend of private investment groups purchasing large quantities of real estate has led to concerns about a potential future liquidation of these assets. As these investment groups may eventually seek to offload properties, this could flood the market, potentially driving down prices and creating an oversupply.

Additionally, the looming impact of climate change on the housing market cannot be overlooked. There is increasing concern that within the next decade, around 25% of the U.S. housing market could become uninsurable due to the heightened risk of natural disasters such as floods, hurricanes, and wildfires. Properties in vulnerable areas are likely to face skyrocketing insurance premiums or become entirely uninsurable, making them less attractive to buyers and investors alike. This scenario is expected to create a more challenging environment for real estate investments, as properties in these high-risk areas may experience significant depreciation in value.

As a result, short sellers are betting on a decline in real estate prices, anticipating that these combined pressures will lead to a market correction. The long-term outlook for real estate investments, particularly in climate-sensitive regions, is fraught with uncertainty, prompting investors to reconsider their strategies. This situation underscores the importance of considering both market dynamics and environmental factors in real estate decision-making.

The Human Induced Climate Change Experiment

Business and Economics

bookmark_borderThe Politics of Climate Change

By Daniel Brouse

As a climate scientist, I have studied the impact of politics on the climate for decades, and the United States ranks among the least prepared countries globally. It also has one of the highest percentages of climate change deniers. Politicians exacerbate this issue by obstructing necessary efforts to combat climate change. The Republican Party, in particular, often dismisses climate change as a manufactured crisis and advocates for increased fossil fuel production. This stance is ironic, as human industrial activities, which are heavily dependent on fossil fuels, are a primary driver of climate change.

Despite some efforts under President Biden to address these issues, the U.S. continues to be the world’s largest producer of oil, including crude oil, natural gas liquids, and other petroleum products. Both political parties have largely opted to provide unlimited emergency funding for climate disasters rather than investing in preventive measures. In 2023, the United States experienced an unprecedented number of climate-related disasters, with 28 major weather and climate events, each causing over a billion dollars in damages. These ranged from hurricanes and wildfires to severe storms and flooding, with some events costing hundreds of billions of dollars individually.

In June 2024, a significant Supreme Court decision severely restricted the Environmental Protection Agency’s (EPA) authority, limiting its ability to enforce environmental protection laws. This ruling marked a drastic shift, undermining decades of regulatory progress aimed at mitigating environmental damage and climate change. It effectively nullified the EPA’s power to regulate emissions and enforce environmental standards, which is a critical setback in the fight against climate change.

The government’s actions, or lack thereof, reflect a dangerous combination of arrogance and ignorance. This situation makes the worst-case predictions for climate change seem like optimistic scenarios. Revised climate models now suggest that global temperatures could rise by as much as 9°C within this century, compared to earlier projections of a 4°C increase over the next millennium. Such a dramatic temperature rise could push Earth toward a “wet-bulb” temperature threshold, where the combination of heat and humidity makes it impossible for the human body to cool itself through perspiration, leading to potentially fatal heat stress.

* Our climate model uses chaos theory in an attempt to adequately account for humans and forecasts a global average temperature increase of 9 degrees Celsius above pre-industrial levels. Everybody has the responsibility not to pollute. There are plenty of things you can do to help save the planet. Stop using fossil fuels. Consume less. Love more. Here is a list of additional actions you can take.

The Human Induced Climate Change Experiment

bookmark_borderEconomics: The Impact of Hate on Political Perspectives and Social Cohesion

By Daniel Brouse
August 2, 2024

“Whereof one cannot speak, thereof one must be silent.” — Ludwig Wittgenstein

For decades, I have been actively involved in promoting the education of world economics. In recent years, I’ve observed a troubling phenomenon: certain segments of the population appear resistant to educational outreach, a condition that seems to split along political lines. While the majority of the population, approximately 60-80%, remains receptive to learning, there is a persistent bias of hate that obstructs rational thinking among the extremes — approximately 10-20% on both the far-right and the far-left.

On the far-right, this bias manifests as an “us against them” mentality, characterized by white supremacy and misogyny. This perspective often arises from fear, envy and jealousy, leading to a distorted worldview. For example:

  1. The invasion at the border: This issue is often framed in xenophobic terms, disregarding the complex socio-economic factors involved.
  2. Moral judgments on government: The government is seen as an inherently corrupt and amoral entity, rather than a system created to serve public needs.
  3. Attack on intellectual disciplines: There is a disdain for intelligence, science, and economics, driven by a lack of comprehension and a desire to undermine established knowledge. Climate change denial and inaction are the greatest threats to both the economy and the environment.

On the far-left, a similar bias of hate is expressed through class warfare rhetoric, such as the demonization of wealth and the desire to redistribute wealth aggressively. This bias also stems from fear, envy and jealousy, manifesting in ways such as:

  1. Tax wealth/eat the rich: This slogan captures the simplistic view that the wealthy should bear the brunt of societal costs, ignoring the complexities of economic systems.
  2. Moral judgments on corporate actions: Corporations are often labeled as inherently greedy or evil, rather than being seen as entities driven by market forces and shareholder interests.
  3. Attack on quantitative disciplines: Like their far-right counterparts, there is often a dismissal of complex subjects like mathematics and economics, which are perceived as tools of oppression.

Both extremes exhibit a resistance to rational thinking, hindered by deeply entrenched biases. These biases not only prevent understanding but also create a dangerous divide that hinders constructive dialogue and problem-solving in society. The challenge lies in finding ways to bridge these gaps and foster a more informed and rational public discourse.

Climate Science: The Influence of Love and Hate

Politicians Hinder Fight Against Climate Change

Business and Economics

The Human Induced Climate Change Experiment

bookmark_borderWealth Taxes Are Illogical

By Daniel Brouse
July 30, 2024

There are numerous reasons why a wealth tax can be a self-defeating fiasco, and the case of taxing someone like Elon Musk vividly illustrates this. A wealth tax on high-net-worth individuals could create a complex and problematic feedback loop involving the sale of Tesla stock and the associated capital gains taxes. To meet his wealth tax obligations, Musk might be compelled to sell a significant portion of his Tesla shares. This large-scale sale could depress the stock price, particularly if the volume of shares sold is substantial, thereby reducing the value of his remaining holdings. As a result, Musk might need to sell even more shares to cover the same wealth tax amount.

Moreover, each sale of shares generates capital gains, which are subject to additional taxes. To pay these capital gains taxes, Musk would need to sell even more shares, perpetuating a cycle where each sale incurs further tax liabilities and necessitates additional sales. This continuous process could exacerbate the decline in Tesla’s stock price, compounding the need for further sales. Over time, this cycle could severely erode Musk’s holdings in Tesla and significantly diminish his overall wealth.

The ramifications of this feedback loop extend beyond Musk. The decline in Tesla’s stock price could adversely affect a wide range of stakeholders, including individual investors such as widows, orphans, and those with retirement accounts. Their investments could lose value as a result of the cascading effect of share sales driven by the wealth tax.

Furthermore, applying a wealth tax to other ventures like SpaceX and Neuralink could be even more detrimental. Such a tax could stifle innovation and growth in these groundbreaking companies, potentially leading to broader economic repercussions and undermining the very objectives the tax aims to achieve. Overall, the unintended consequences of a wealth tax could be far-reaching, affecting not just the wealthy but also impacting the broader economy and investment landscape.

The other impacts of such taxes on a larger portion of the population are likely to lead to even more devastating economic outcomes. Unlike any previous period of excessive taxation in the U.S., it is now much easier for capital to flee the country. The internet and technological advances make it simpler for wealth to move to less hostile environments. As a result, instead of creating more equity, these taxes could accelerate inequality.

Q: How much is Musk’s income, net worth, and projected wealth tax? Your scenario assumes that the wealth tax is onerous.

A: This scenario was based on a one-time net worth tax of 3.4%. It references a still circulating meme from 2021 that stated the $11 billion in income taxes Musk paid that year amounted to only 3.4% of his net wealth, suggesting that more should be paid. In any event, all wealth taxes, regardless of the rate, would present significant challenges. As soon as you tax wealth, it inherently declines. But even before that point, determining the value of assets is fraught with difficulties. For example, how do you accurately assess the value of companies like SpaceX or Neuralink? Their worth isn’t easily defined, especially given their potential for future growth and the speculative nature of their industries. If the wealth tax were applied annually, the challenges would be even greater. Yearly valuations would be required, and the volatility of asset prices could lead to significant fluctuations in tax liabilities, creating further complications for both the taxpayer and the tax authorities. Additionally, the administrative burden of assessing and enforcing such a tax could be substantial, potentially outweighing the benefits. More importantly, even if all their money were taken, it would do almost nothing to reduce the national debt. In fact, it could potentially have the opposite effect. This can be observed at the state level, with Tesla moving out of Delaware and California. Imposing a wealth tax could lead to wealth fleeing the U.S. A much better idea would be to tax pollution.

Q: What about a flat tax?

Actually, the US has a progressive income tax. In recent years, the top 10% of income earners in the United States have contributed significantly more to federal income tax revenues. Specifically, for the 2020 tax year, the top 10% paid 73.7% of all federal income taxes. This concentration of tax liability has increased over time, reflecting a greater share of total income and taxable income among the wealthiest individuals.

For comparison, the top 1% of taxpayers alone paid 42.3% of all federal income taxes in 2020, while the bottom 50% of earners contributed only 2.3%. Generally, progressive taxes on productivity can be detrimental to an economy and disproportionately affect the poorest individuals.

A Much, Much Better Approach
A more effective approach would be to tax negative externalities, similar to the taxation on cigarettes. For example, imposing a 100% tax on a barrel of oil and a 1,000% tax on a ton of coal could significantly disincentivize the use of fossil fuels. Such high taxes would make fossil fuels much more expensive, encouraging industries and consumers to transition to cleaner energy alternatives like wind, solar, and nuclear power. This shift would not only reduce greenhouse gas emissions but also mitigate the broader environmental harm caused by fossil fuel extraction and consumption, including air and water pollution.

Pollution from fossil fuels is the leading cause of death globally, contributing significantly to respiratory and cardiovascular diseases. The impact is disproportionately felt by the poorest and most disenfranchised populations, who often live in areas with higher pollution levels and have less access to healthcare. These communities are also more likely to suffer from the environmental and health consequences of fossil fuel extraction and burning, such as air and water contamination, leading to a cycle of poverty and illness. The burden of fossil fuel pollution is not evenly distributed; it exacerbates existing social and economic inequalities, making it a pressing issue for both public health and social justice. Addressing this challenge requires comprehensive policies that not only reduce emissions but also protect and uplift the most vulnerable populations.

Climate change will continue to exacerbate existing inequalities. As extreme weather events, rising sea levels, and other climate-related disruptions increase, those with fewer resources will struggle the most to adapt and recover. This growing inequality calls for a two-pronged approach: actively working to mitigate global warming and preparing for the socio-economic disparities it will inevitably deepen.

The Real Threat to Economic Security
Regrettably, the United States ranks among the least prepared countries globally, with the highest percentage of climate deniers. Politicians exacerbate the problem by hindering efforts against climate change. The Republican Party dismisses it as a manufactured crisis and plans to increase fossil fuel production. Political extremists asserting that the climate crisis is manufactured employ an ironic term, considering that human manufacturing activities are the primary driver of climate change.

Under President Biden, the United States continues to be the world’s largest producer of oil, including crude oil, natural gas liquids, and other petroleum products. Both political parties have concurred to allocate unlimited emergency funding for climate disasters instead of proactively preventing them. In 2023, the U.S. witnessed a record number of climate disasters exceeding one billion dollars each, totaling 28 separate weather and climate-related events.

In June 2024, the Supreme Court significantly expanded its authority and severely curtailed the Environmental Protection Agency’s (EPA) ability to enforce environmental protection laws. This ruling represents a dramatic shift in the balance of power, undermining decades of regulatory progress aimed at mitigating environmental damage and climate change. The court’s decision essentially nullifies the EPA’s mandate to regulate emissions and enforce compliance with existing environmental standards.

This judicial overreach is viewed by many as an act of arrogance and ignorance, resulting in a scenario where “worst-case” predictions for climate change have become the “best-case” expectations. The ramifications of this decision are dire, prompting a revision of climate models to reflect a much grimmer outlook. The new projections indicate a potential maximum global temperature increase of 9°C within this century, a stark rise from the previously estimated 4°C over the next millennium.

CONCLUSION
The national debt currently stands at $36 trillion. Even if we taxed 100% of the wealth of the top 1%, we would still owe more than $36 trillion at the end of the year. Additionally, this move would eliminate approximately 45.8% of all federal individual income tax revenue. The only viable solution is to address the existential crises we face, as failing to do so means risking widespread early deaths, poverty, and a lack of healthcare for everyone.

Balancing the Books: How Public-Private Healthcare Models Can Sustain Economic Growth

Taxation in a Changing World: Challenges, Inefficiencies, and Paths to Sustainability

Wealth Taxes Are Illogical

Business and Economics

The Human Induced Climate Change Experiment

bookmark_borderThe National Debt and the Printing of Money

The two most important components of US fiscal and monetary policy are the national debt and the Federal Reserve’s ‘Credit and Liquidity Programs and the Balance Sheet’.

National Debt
The national debt of the United States has increased significantly under both Republican and Democratic administrations, although the contributing factors have varied. Under Republican presidents, Ronald Reagan’s administration saw the debt rise by over $1.6 trillion due to tax cuts and increased military spending. George W. Bush added about $5.8 trillion to the debt, driven by tax cuts, the costs of the wars in Afghanistan and Iraq, and the financial crisis of 2008. Donald Trump’s presidency further increased the debt by approximately $7.8 trillion, influenced by the 2017 tax cuts and the response to the COVID-19 pandemic.

In contrast, Democratic presidents have also seen substantial increases. During Bill Clinton’s tenure, budget surpluses were achieved in later years, but the national debt still grew. Under Barack Obama, the debt rose by around $9.3 trillion, largely due to economic stimulus measures following the Great Recession, including the American Recovery and Reinvestment Act. The debt increase continued under Joe Biden, with significant spending on COVID-19 relief measures, including the American Rescue Plan.

Comparatively, the debt increased by approximately $15.2 trillion under Republican administrations (Reagan, Bush, and Trump) and by about $9.3 trillion under Democratic administrations (Obama and Biden), with Clinton achieving a relative fiscal balance during his presidency. This comparison underscores that both parties have contributed to the growing national debt, often influenced by external crises and policy choices.

Federal Reserve’s ‘Credit and Liquidity Programs and the Balance Sheet’
When the Federal Reserve ‘prints money’ (quantitative easing) to buy treasury securities, it acts as a money multiplier. To start with, the Fed shouldn’t own any treasury securities for the long-term. However, two times in the past the Fed has created $4 trillion dollars to buy assets. The first $4 trillion quantitative easing started in August of 2006 under President George W. Bush. The second $4 trillion round of quantitative easing began in August of 2019 under President Donald Trump. The combined $8 trillion dollars in quantitative easing is further exacerbated by the ‘money multiplier effect’. The end result of quantitative easing exacerbates the national debt. Additionally, the printing of money is one of the most significant drivers of inflation, as it increases the money supply and can lead to higher prices across the economy.

Business and Economics

bookmark_borderDrill, Baby, Drill (How Hate and Ignorance Distort Economic Perspectives)

By Daniel Brouse
July 19, 2024

“Perhaps most importantly is the repeated use of the phrase ‘Drill, Baby, Drill’.”

Economic Update:
If Trump wins, great news for the very few people whose primary income comes from government securities interest! Unfortunately, very, very bad news for everyone else.

Tariffs, protectionism, lack of immigration, and nationalism are all detrimental to the economy. Tariffs and protectionist policies can lead to trade wars, higher consumer prices, and disruptions in the supply chain, which can stifle economic growth. Limiting immigration reduces the labor force and can slow down innovation and productivity, as immigrants often contribute significantly to economic dynamism. Nationalism can lead to isolationist policies that hinder international cooperation and trade, further damaging the economy. Over the last several years, approximately 80% of economic growth can be attributed to immigration.

Should Trump win, there is a concern that the U.S. may face economic decline similar to his six personal bankruptcies. His previous administration’s policies on tariffs, immigration restrictions, and nationalist rhetoric have already shown signs of economic strain. Continued implementation of such policies could exacerbate these issues, leading to a weakened economy and reduced global competitiveness for the U.S. It is crucial to adopt inclusive and cooperative economic strategies to foster sustainable growth and stability.

Interest rates are likely to spike and remain high for an extended period. In 2019, under the Trump administration, the Federal Reserve balance sheet saw a massive increase of $4 trillion in a very short period. This unprecedented expansion of the money supply, combined with the administration’s tax cuts and significant government spending, contributed to record inflation levels. The rapid increase in the money supply, aimed at stimulating the economy, led to an oversupply of currency, diminishing its value and driving prices up.

Federal Reserve's Balance Sheet / Assets
Federal Reserve’s Balance Sheet / Assets

The former President has also made claims that he will lower interest rates if he returns to office. The good news is that he doesn’t have the authority to directly lower rates, as this is the Federal Reserve’s responsibility. However, what used to be reassuring news is now less so. With the rollback of Chevron regulations, potential economic instability could lead to disastrous consequences, including further inflationary pressures and financial market disruptions.

Additionally, the tax cuts, while boosting short-term economic growth, significantly reduced federal revenue, leading to increased borrowing and higher national debt. The substantial government spending further exacerbated this issue, creating a fiscal environment prone to inflation. As a result, the Federal Reserve had to raise interest rates to combat inflation and stabilize the economy.

High interest rates can slow down economic growth by making borrowing more expensive for consumers and businesses, potentially leading to reduced investments and spending. This can create a challenging economic environment, underscoring the need for balanced fiscal policies that promote sustainable growth without leading to excessive inflation.

The former President recently stated that he wants a ‘weaker dollar.’ A devalued dollar on international markets can lead to numerous economic challenges, including significant impacts on inflation and interest rates. A weaker dollar makes U.S. exports cheaper and more competitive abroad, potentially boosting manufacturing and trade. However, it also increases the cost of imports, leading to higher prices for consumer goods and contributing to inflation.

Additionally, a weaker dollar can affect interest rates as the Federal Reserve may adjust monetary policy to manage inflationary pressures, impacting borrowing costs for consumers and businesses. Another concern is the impact on foreign investment. Treasury securities are popular among foreign investors because they are considered a safe investment. However, if the dollar devalues, the return on these investments may decrease when converted back to the investor’s local currency. To attract foreign investment despite the weaker dollar, the U.S. may need to offer higher interest rates on Treasury securities.

These economic landmines highlight the complexities and potential risks associated with currency devaluation.

Perhaps most importantly is the repeated use of the phrase ‘Drill, Baby, Drill’. The phrase encapsulates a harmful approach to energy policy that prioritizes fossil fuel extraction over sustainable practices. Climate change, exacerbated by such policies, poses the most severe threat not only to our environment but also to our economy.

In 2023, the U.S. experienced a record number of climate disasters, each exceeding one billion dollars in damages, with a total of 28 separate weather and climate-related events. Some of these individual events cost the U.S. economy hundreds of billions of dollars. The frequency and severity of these events are alarming, reflecting the accelerating pace of climate change.

The economic impact of climate change is expected to be staggering, with projections indicating it could cost the U.S. economy trillions of dollars. The financial burdens arise from various sources, including the destruction of infrastructure, increased healthcare costs due to climate-related illnesses, disruptions to agriculture and food supply, and the need for extensive disaster relief and recovery efforts. One of the primary drivers of the current inflation spike is the rising cost of homeowners insurance due to climate disaster-related claims. Short sellers anticipate that within ten years, 25% of U.S. properties will be uninsurable. These costs will continue to rise unless significant measures are taken to mitigate climate change and transition to a more sustainable energy system.

Moreover, the long-term economic effects of climate change can hinder economic growth, reduce productivity, and increase social inequalities. Proactive investments in renewable energy, climate resilience, and sustainable practices are essential to curtail the financial and environmental impacts of climate change. These measures are crucial to protect both the environment and the economy from the devastating impacts of climate change.

Trumpenomics: The Decline of the US

Economic Outlook 2025 – 2035

Protectionism 101: Trump Economics

The Human Induced Climate Change Experiment