Government Controls or Market Solutions? | TWE 184

Real GDP grew at 2.2% annualized rate in the second quarter, revised substantially higher, actually, from the 1.5% previously estimated.

Consumer spending and private investment helped with the revision, so there is still underlying strength in the economy.

But that doesn't mean that everything is fine.

The latest personal consumption expenditures inflation report showed prices up 3.4% over the last year, with core, excluding food and energy, inflation at 3%.

That was cooler than expected, but both of these are still remain way too high, well above the Federal Reserve's 2% target rate.

And then there's Washington.

The federal government borrowed about $2 trillion during the first 11 months of this fiscal year, while gross federal debt has surpassed $40 trillion.

When government borrows heavily, that money has to come from somewhere.

It doesn't grow on trees.

More federal borrowing can put upward pressure on interest rates and make financing more expensive throughout the economy.

So if we're still sitting around the policy table talking about affordability, here's the first question I'd ask.

If excessive spending helps contribute to inflation and debt, can we really solve affordability with even more government expending? I don't think so.

Senator Rand Paul has proposed the six-penny plan, which aims to balance on-budget spending and revenues within just five years by reducing projected federal spending by 6% per year.

That's where the six-penny plan comes in.

Now, we can debate about the details of this proposal or any proposal, but Washington must eventually confront the arithmetic.

We can't borrow our way to affordability.

We can't borrow our way to prosperity.

Real GDP grew at 2.2% annualized rate in the second quarter, revised substantially higher, actually, from the 1.5% previously estimated.

Consumer spending and private investment helped with the revision, so there is still underlying strength in the economy.

But that doesn't mean that everything is fine.

The latest personal consumption expenditures inflation report showed prices up 3.4% over the last year, with core, excluding food and energy, inflation at 3%.

That was cooler than expected, but both of these are still remain way too high, well above the Federal Reserve's 2% target rate.

And then there's Washington.

The federal government borrowed about $2 trillion during the first 11 months of this fiscal year, while gross federal debt has surpassed $40 trillion.

When government borrows heavily, that money has to come from somewhere.

It doesn't grow on trees.

More federal borrowing can put upward pressure on interest rates and make financing more expensive throughout the economy.

So if we're still sitting around the policy table talking about affordability, here's the first question I'd ask.

If excessive spending helps contribute to inflation and debt, can we really solve affordability with even more government expending? I don't think so.

Senator Rand Paul has proposed the six-penny plan, which aims to balance on-budget spending and revenues within just five years by reducing projected federal spending by 6% per year.

That's where the six-penny plan comes in.

Now, we can debate about the details of this proposal or any proposal, but Washington must eventually confront the arithmetic.

We can't borrow our way to affordability.

We can't borrow our way to prosperity.