If you’re in a recession, there’s no point in raising taxes. This was a common sense view, shared by liberals and conservatives, Keynesians and supply-siders, but no more. In our creepy Biden world, where true is false, false is always false, recessions don’t exist, inflation doesn’t exist, fossil fuels don’t exist, and 75% of America doesn’t exist, there is no common sense on the left. Well, let me try. In a recession, you don’t raise taxes, and to quote the eminent economist Larry Lindsey, who will be here in a moment, “there have never been two consecutive quarters of negative growth that were not ultimately viewed as recessionary.” My conclusion tonight is: in a high inflation, you don’t spend your cake. So in recent days, Congress, led by Democrats but sometimes aided by Republicans, has pledged to spend just $600 billion on Schumer Reconciliation Bill and another $280 billion in the CHIPS+ corporate welfare, industrial design, pork barrel bill. So, in round numbers, just under $900 billion. In today’s personal income report, all inflation news was higher than expected. The PCE deflator rose 1% in June, after just 0.6% and 0.2% in the previous two months, with the quarterly change at an annualized 7.2%. WHAT TAX INCREASE ARE IN THE MANCHIN-SUMER RECONCILIATION BILL? Senate Majority Leader Chuck Schumer, New York, speaks to the media after a Democratic policy luncheon, Tuesday, Oct. 19, 2021, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin) ((AP Photo/Jacquelyn Martin) / AP Newsroom) Contrary to Wall Street wisdom, we’ve had two consecutive quarters of falling GDP, but inflation is rising Anyway. On taxes, you’re looking at a $740 billion tax increase, including a damaging alternative minimum tax of 15% on companies whose taxable income is lower than book profits. These companies are not bad. They didn’t break the law. Instead, they use legal tax credits and deductions, but mostly 100% direct investment spending, which increases productivity, real wages, and typical family incomes. This 15% minimum tax will prevent them from making these critical business investments that create jobs and enhance technology. Ironically, Senator Manchin’s coal industry will be hit hard by this – so will all of mining, minerals, fossils, manufacturing, and even financial services. This turns stupid into dumber. But guess what? Green energy tax credits will be exempt from the new corporate AMT. Now isn’t that just a kick in the pants? So you could argue, and I will, that all the obsessive spending of the Green New Deal on climate change and the so-called CHIPS+ add-on will boost inflation, while the tax increases will sink the recession deeper. By the way, these tax increases are still not enough to cover all the spending, so there is no “deficit reduction” in this fiscal hubris. To put it mildly, this is not good. Far better for Congress to do nothing and go home early. In fact, this is the story of the Biden administration. He came to power in the midst of the powerful economy, with growth of around 6% and inflation below 2%. They shouldn’t have done anything, and by the way, anyone can see that Joe Biden would rather stay in his basement and do nothing, but no, they should have been activists—green activists, high-tax activists, big-budget activists. spending, union activists, fossil fuel-hating activists, tax-success activists, open-borders activists, police-hating activists, “I left Afghanistan too early” activists, “I was a dollar short and a day late in Ukraine” activists ». FED’S PREFERRED INFLATION GAUGE UP 4.8% IN JUNE, HELD NEAR 40-YEAR HIGH South Dakota Republican Sen. John Thune comments on Manchin and Schumer’s ‘Kudlow’ spending bill deal. All this radical, woke, modern climate monetarist activism has in a short 18 months sunk the economy, wreaked havoc at the border, disrupted our culture, supported criminals – not victims – and on and on and on. Guys, I don’t like activism, never have. Years ago when I worked for Reagan, CEA Chairman Murray Weidenbaum used to say to the Cabinet, “Don’t just stand there, undo something.” I like. There’s a reason conservatives prefer limited government. CLICK HERE TO GET THE FOX NEWS APP Senate Democrats need all 50 members on board to pass their spending bill without a remote vote. Chad Pergram reports from Capitol Hill. Actually, that’s a pretty good litmus test for congressional votes: if it cuts government, vote for it. If the government expands, vote against it. The whole problem with the Bidens is that they tried to govern as activists of big government, central planning, regulatory excesses of extermination and they destroyed a great country. Well guys, we have a lot of work ahead of us. We must make America great again, again. This article was adapted from Larry Kudlow’s opening comment in “Kudlow” on July 29, 2022.
