Tag: economy

Economic Freedom Begins Recovery From COVID-Era Government Meddling

The good news is that the first 20 years of the millennium saw overall increases in economic freedom around the world—with continuous improvement through the second decade. The bad news is that not just the United States but most of the world lost ground during the massive government interventions of the COVID-19 pandemic. That’s unfortunate for individual liberty, but also for prosperity since the economic freedom of a country strongly correlates with higher incomes and lower poverty. The world appears to be recovering freedom and wealth, but it lost years of progress to government meddling.

The latest edition of the Economic Freedom of the World report, published by Canada’s Fraser Institute, the Cato Institute, “and more than 70 think tanks around the world” is out, and it finds the world digging itself out of a hole that started in 2020.

“Overall, the index shows that economic freedom has increased since 2000, but fell precipitously following the coronavirus pandemic, erasing nearly a decade of progress,” the authors note. “We take no position on the efficacy of the various public-health policies designed to deal with the coronavirus pandemic; they very well may have saved millions of lives, or they may have been completely ineffectual….Our concern is economic freedom, and on that margin, there is no question that government policies responding to the coronavirus pandemic have reduced economic freedom.”

While global economic freedom has started to improve again as the pandemic and its interventions fade into memory, the average across nations is back to where it was in 2012. Weighted for population, which accounts for large countries with statist governments including China, the world’s economic freedom is just a hair better than it was in 2013 and has yet to start recovery from the COVID-era dip.

The index shows North America experiencing the largest decline over the measured period, with Latin America, the Caribbean, the Middle East, and North Africa following. “The latter region’s decline is especially tragic given its low starting point,” comment the authors.

“In 2023—the latest year for which data are available—the 10 highest scoring nations were Hong Kong, Singapore, New Zealand, Switzerland, the United States, Ireland, Australia and Taiwan (tied for 7th), Denmark, and the Netherlands.”

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‘Big losses’: Study confirms Newsom’s $20-an-hour minimum wage decimated industry

Gavin Newsom, California’s far-left Democrat governor, is known to have presidential aspirations.

If he chooses that path, one of issues on which he will face a grilling will be economics.

And a new study has revealed it won’t look good.

It’s because since he imposed a $20-an-hour minimum wage for fast food workers in his state, California has lost close to 20,000 such jobs.

“That’s nearly 25% of the country’s fast-food job losses during that same period, according to an analysis of quarterly data released this month from the Bureau of Labor Statistics,” charged a report in the Washington Examiner.

“These grim statistics should be a wake-up call for Newsom and other policymakers pushing for drastic wage hikes that will cause unintended consequences,” said Rebekah Paxton, if the Employment Policies Institute.

The Examiner report noted Newsom “was all smiles two years ago when he signed the FAST Recovery Act, creating a $20 minimum wage for fast-food workers in his state. He called the legislation a win-win-win that would benefit restaurant owners, their employees, and customers alike.”

But it’s actually left behind “big losses.”

Besides job losses, there have been staff cuts, huge menu price increases and a turn to automation, the report said.

“California made national headlines when two large Pizza Hut franchises laid off more than 1,200 in-house delivery drivers to cut costs, while others, such as Mod Pizza and Foster’s Freeze, decided to close up shop entirely,” the report noted.

Paxton said, “Newsom’s $20 wage has turned out to be nothing more than a boost to his own ego at the expense of fast food workers. His consistent claim that the law is a ‘win’ is out of touch with reality, and lawmakers looking to mirror his job-crushing policies should think twice.”

Further, the analysis found even workers who kept working lost.

“The law has cost nontipped restaurant workers 250 hours of work annually, according to the EPI analysis, which represents $4,000 in lost income under the state’s previous minimum wage for fast-food workers.”

And, according to the American Cornerstone Institute, it’s hit small businesses hardest.

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European Neo-Feudalism: How Exit Taxes Chain Citizens To A Failing System

More and more people are turning their backs on the European Union. With them, the states are also losing economic substance. Exit taxes are being used in an attempt to counter this.

The states of the European Union are experiencing a veritable exodus. About 1.4 million EU citizens left their home countries in 2023, among them 265,000 Germans. Among the favored destinations are, alongside Switzerland and the United States, booming regions such as Qatar or Dubai.

Good Reasons

The list of destination countries carries political dynamite, because it says much about the background of this flight movement. A growing number of high performers are trying to escape what is in many places almost predatory levels of taxation. In addition, academics, researchers, freelancers such as the so-called “digital nomads,” and entrepreneurs simply find better economic prospects elsewhere than in economically sedated Europe.

EU citizens are not infrequently being drained by a tax burden of 45 percent. We know this from Germany: it is not even necessary to count among the absolute top earners in order to have to surrender nearly half of one’s income to the tax authorities. Basically, it is a scandal—one about which there is no longer any open discussion.

In Dubai, for example, there is no income tax at all. In the United States, the state burdens its citizens with around 27 percent. Anyone who can calculate, who is well educated and mobile, draws the consequences. Alongside the tax burden, social crises increasingly come into play: uncontrolled migration, the decay of major cities, and the visibly hostile climate of ever-expanding bureaucracies. For many ambitious people, life in the EU’s Europe is simply too expensive, and the essence of bureaucracy too overbearing.

Expensive Emigration

Every emigrant leaves behind an economic gap in his homeland. When a German with a high income leaves the country, the state does not only lose a taxpayer—it loses his capital and know-how. Over the lifetime of an academic, around €1.5 million in taxes and social contributions escape the treasury. In addition, there is the enormous loss of capital. Estimates assume that the median wealth of Germans per person is €106,000. With the emigration of 265,000 Germans and the return of 191,000 persons—where for simplicity we assume the same level of wealth—about €7.8 billion in capital flows abroad.

The economist Bernd Raffelhüschen calculates the annual fiscal loss through emigration by discounting the difference between future tax and social contribution payments and state transfers of an average academic to its present value. He arrives at a loss of about €30,000 for each emigrated academic.

The flight of high performers works like economic erosion in real time. Highly qualified people leave the country. People who, with higher probability, would have moved venture capital and founded companies are tearing open a fiscal gap. About 56 percent of income tax revenue is provided by the top ten percent of taxpayers—the political class would be well advised to roll out the red carpet for these people instead of harnessing them to the cart of their ambitious social projects.

Feudalism as the Answer

The answer of EU Europe to the flight of the economically ambitious and wealthy is neo-feudal in character. Through punitive taxes, the costs of fleeing the tax collector and the increasingly invasive state are to be raised so high that the impulse to emigrate is suffocated. Somewhat exaggeratedly formulated, this policy recalls the old feudal European conditions which once led to the mass migration of Europeans to North America.

Alongside France, Spain, Italy, and the Netherlands, the Federal Republic of Germany has also deployed an exit tax.

Anyone who, as an entrepreneur, holds at least 1 percent of a corporation (this includes stock capital) and turns his back on Germany triggers exit taxation—even if no sales proceeds have been realized. In this case, the state assumes a fictitious sale of the shares and taxes the theoretical capital gain. What is decisive is the difference between the original purchase price and the current market value. Sixty percent of this gain is added to taxable income and taxed at up to 45 percent, depending on the income tax rate. In addition comes the solidarity surcharge and a possible church tax levy.

This regulation applies if the person concerned was subject to unlimited taxation in Germany for at least seven of the past twelve years—and it applies equally in the case of emigration to third countries or relocation within the EU. Since 2022, moves within the EU are no longer automatically privileged for tax purposes: whoever wants to leave must pay—unless he applies for a deferral over seven years and provides collateral. The frequently mentioned €150,000 threshold is not a tax-free allowance, but only a guideline for assessment.

In sum, this amounts to state access to future gains, binding entrepreneurs to their homeland and making departure more difficult through a fiscal hurdle.

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Trump’s Tariffs Have Already Hurt the Economy—and the Pain Is Only Beginning

The U.S. economy is already feeling the effects of Trump’s tariffs, and the Organization for Economic Cooperation and Development (OECD) projects that things could get worse.

The OECD’s biannual interim economic outlook, published on Tuesday, forecasts U.S. growth will fall by a full percentage point from its 2024 rate. While this might not sound like much, this will translate to Americans missing out on trillions of dollars of goods and services by 2035 if this decrease in growth persists.

From 2010 to 2019, American gross domestic product (GDP) grew by an average of 2.4 percent per year. In 2024, it grew by 2.8 percent. Now, the OECD projects that the economy will grow by only 1.8 percent in 2025 and 1.5 percent in 2026, “owing to higher tariff rates [and] moderating net immigration,” among other factors. Assuming that yearly GDP growth neither rebounds nor falls further but persists at 1.8 percent, the U.S. economy will be $2.2 trillion smaller in 2035 than it would be had President Donald Trump not adopted his protectionist policies and growth remained at 2.4 percent.

Even though the OECD’s growth projections show the long-run macroeconomic damage of Trump’s tariffs, the American economy has remained relatively strong since he took office. The stock market is at an all-time high while inflation has been about the same as that experienced during the last year of the Biden administration: The average monthly inflation from January 2024 to August 2024, as measured by the consumer price index (CPI), was 0.2 percent. From January 2025 to August 2025, monthly CPI growth was not much higher: 0.225 percent. Meanwhile, the average monthly increase in the producer price index (PPI), which measures changes in expenses borne by American businesses, was 36 percent lower compared to the same time last year.

The Bureau of Labor Statistics (BLS) explains that “imports are excluded from PPI.” The experimental BLS index, which incorporates imports, tells a story similar to regular PPI: this index experienced 38 percent lower inflation from January 2025 to July 2025 than it did during the same period a year ago.

Relatively stable consumer price inflation and lower producer price inflation—excluding and including imports—under Trump are surprising. After all, the president has more than tripled the average effective tariff rate to 11.6 percent on approximately $2.2 trillion worth of imports, according to the Tax Foundation. Therefore, all things being equal, CPI and PPI should be elevated. So, why aren’t they? The answer lies in the delayed implementation of Trump’s tariffs: Although “Liberation Day” was April 2, the “reciprocal tariffs” announced then were postponed for months, finally taking effect on August 7, meaning “the full effects of tariff increases have yet to be felt,” as the OECD explains.

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Milei Raises Government Spending While Pledging Zero Deficit

Argentine President Javier Milei has built his presidency around a single rule: zero deficit. Yet even as he vows to keep the budget balanced, his new 2026 plan raises pensions, health, and education spending. The shift comes just a month before midterm elections, testing whether his austerity brand can survive political reality. 

Since taking office in December 2023, Milei slashed billions in spending, froze public works, and cut federal funding to provinces, among other austerity measures. University and health budgets were hit especially hard, leading to layoffs and reduced services. Retirees saw their benefits shrink as inflation eroded payments, while tighter rules limited access to pensions. As a result, Argentina reached its first primary surplus in more than a decade and its first full-year surplus in 123 years. But the cost was steep: Consumption plunged and poverty spiked above 50 percent before easing in recent months.

The political backlash hit hardest in the province of Buenos Aires—home to nearly 40 percent of voters—where Milei’s coalition suffered a defeat earlier this month. In response, Milei rolled out a 2026 budget that expands spending in areas he once vowed to shrink.

The plan increases pensions and disability payments by 5 percent, boosts health spending by 17 percent, and lifts education spending by 8 percent—all above projected inflation. As Martín Rodríguez Yebra of La Nación put it, the package amounts to “a white flag in the three battles that eroded his popularity this election year.”

Milei insists fiscal balance remains “set in stone.” The numbers partly back him up: total revenues for FY 2026 are projected at 15.6 percent of gross domestic product, up 0.2 percentage points from 2025. On paper, the budget still balances.

The biggest challenge is political. Without a congressional majority, Milei has relied on vetoes to block deficit-boosting bills. By conceding targeted increases, he hopes to blunt those challenges while courting centrists who dislike Peronist populism but remain wary of his radical cures. The October 26 legislative elections will decide whether he grows his foothold in Congress or stays boxed in.

At the Conservative Political Action Conference (CPAC) earlier this year, Milei handed Elon Musk a chainsaw—a symbol of his vow to slash the state. Now, with midterms looming, he is testing whether that brand of austerity can withstand political reality. Voters will decide whether the chainsaw keeps buzzing or runs out of fuel.

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Trump Is Embracing ‘Daddy State’ Economics

The question of whether President Donald Trump has turned the United States toward a new “state capitalism”—one in which the government is not just economic referee but active player—has been answered. His second term brings policies that go well beyond traditional Republican pro-market orthodoxies, such as tax cuts and deregulation, and into direct involvement with production and capital. Yet this doctrine is less a coherent grand strategy than a set of ad hoc deals, sometimes pro-market and sometimes interventionist.

Some Trump policies—tax cuts, deregulating, talk of budget-deficit reductions—retain a traditional Republican tone. On the other hand, this administration’s protectionism and tariffs would have been inconceivable a decade ago. Republicans would also traditionally label the government’s acquisition of a 10 percent stake in Intel as socialism if proposed by anyone other than Trump. And other policies have the feel of mafia tactics made possible by the exercise of leverage, like letting Nvidia and AMD sell their chips to China in exchange for a 15 percent cut back to the U.S. government.

Trump also departs markedly from the past GOP playbook in his lack of recognition that the market allocates resources much better than politicians and bureaucrats do. He treats the market as a stage for negotiation to reorganize the world’s economies. Old-guard Republicans were globalists, whereas Trump built his appeal on “America First” nationalism and protectionism.

Earlier Republicans valued predictable rules, but as Cambridge legal scholar Antara Haldar noted in a Project Syndicate symposium this month assessing the direction of “Trumponomics,” the president “is willing to break any rule, norm, or promise…in the name of striking ad hoc corporate-style ‘deals.'” Where conservative-minded leaders of the past obscured the state’s role, Trump “flaunts it.”

Yet Haldar correctly argues that Trump’s approach differs from other forms of heavy-handed state control. It is neither the Chinese model nor that of the developmental state. It is “erratic, transactional, and short-sighted” and a rejection of the “quietly overbearing ‘Nanny State’…in favor of a commanding, patriarchal ‘Daddy State.'”

Princeton University historian Harold James, another participant in the symposium, sees Trump as a break from the past due to his revival of state-directed “industrial policy.” This started under former President Joe Biden’s administration, but there is no doubt that Trump’s pursuit of a manufacturing revival and reshoring of global supply chains, along with his tariffs and equity stakes in private companies and his overall aim to rebuild U.S. strategic capacity, fall well into that category.

Unfortunately, as James argues, Trump’s brand of industrial policy encourages “hyper-activist corporate lobbying, with large and well-connected enterprises getting the best ‘deals.'” In my opinion, all industrial policies end up this way, not just Trump’s.

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Western politicians are not looking after the national interest – whose interests are they looking after?

On Tuesday, Richard Werner, Professor of Banking and Economics at the University of Winchester, joined Rick Sanchez on RT’s ‘Sanchez Effect’ to discuss Europe’s economic woes.

In Western countries  that are in economic and greater fiscal difficulties,” Prof. Werner said, “we have people in charge who do not look after the national interest and have other motives, other goals.”

To help us begin to understand what these “other motives” and “other goals” are, we turn to a speech made around 2001 by the late Dr. Michael S. Coffman at the Granada Forum.  Dr. Coffman passed away in 2017, as reported by InfoWars.

Dr. Coffman had a PhD in Forest Science.  He was a retired paper industry executive, a property rights advocate and a global warming sceptic known for his work with Environmental Perspectives, Inc. and Sovereignty International, focusing on issues such as Agenda 21, the Convention on Biological Diversity and the perceived threat of a New World Order.

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2 In 5 Young Adults Are Taking On Debt For Social Image, To Impress Peers, Study Finds

You can thank the Tik Tok, Instagram world we live in…

Money may not buy love, but for many young adults, it’s still the ticket to attention. A new study shows that two in five Gen Zers admit going into debt just to impress others — often in dating and social situations, according to Credit One Bank.

The pressure to perform financially is high among younger generations. Half of Gen Z and millennials (51%) say they’ve faked wealth or success, with Gen Z leading at 54%. Nearly 38% admit they’ve damaged their credit score or gone into debt to impress someone, and 37% say they’d even overdraft their accounts for a date. Men feel that pressure most: 46% would go into debt for a single date, compared to just 28% of women.

Credit One Bank writes that more than half of consumers say a high credit score makes someone more attractive, while nearly 70% would lose confidence in a boss with bad credit. Still, disclosure is rare: 54% of Gen Z and millennials prefer not to share their financial details with a partner until things get serious. Only 8% call poor financial history a marriage dealbreaker. Nearly half (48%) say they’d marry someone with a shaky financial past, especially if that person was improving. Gender gaps persist: men (47%) are more forgiving, while women are twice as likely to reject a partner over money issues (10% versus 5%).

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Congress close to missing ‘basic’ budget deadline for 29th year, watchdog group says

Congress is on its way to missing a “basic” budget deadline for the 29th year in a row, according to the Committee for a Responsible Federal Budget.

Meanwhile, the deficit so far into the current fiscal year is larger than the same period last year. 

“We’re less than a month away from a possible government shutdown, and lawmakers are once again finding themselves without a plan to keep the government funded,” said Maya MacGuineas, CRFB’s president. “If all 12 appropriations aren’t signed into law by September 30, it will be the 29th year in a row that they failed to meet the most basic deadline in budgeting. That’s not a streak to be proud of.”

MacGuineas said that the current spending showdown is the latest example of how broken the budgeting process is in Washington.

“This is just another sign that the budget process is completely broken. Congress hasn’t passed a real budget resolution in 10 years. Often, they pass no budget at all. And when they do pass one, it’s either full of fantasy math, simply an excuse to facilitate the passage of partisan reconciliation bills, or both,” she said. “Going through the process of crafting a budget around the nation’s priorities now sounds like a fairytale – in fact, the President hasn’t even bothered to submit a full budget for Fiscal Year 2026.”

The federal government has borrowed $1.9 trillion so far into FY2025 from September 2024 through August 2025, according to the latest Congressional Budget Office (CBO) data. The borrowing is slightly higher than the same time period of fiscal year 2024.

However, the monthly deficit for August is lower than last year. 

The deficit was $360 billion in August 2025, which is down from $380 billion in August 2024. 

According to CBO data, federal tax revenue for August 2025 was $344 billion, which is a $37 billion increase compared to August 2024. 

Spending in August 2025 was $17 billion higher than August 2024.

In total, the deficit so far into FY2025 is $1.9 trillion compared to $1.8 trillion during the same time period of FY2024.

The CRFB estimated that the FY2025 rolling deficit is about 6.4% of GDP, which is close to FY2024.

“Over the past 12 months, total nominal revenue was $5.2 trillion compared to $4.9 trillion over the same period prior. Nominal spending was $7.1 trillion over the past 12 months compared to $6.9 trillion the same period prior,” read a CRFB analysis.

MacGuineas suggested that lawmakers should work to avoid a shutdown and improve the fiscal situation of the country at the same time. 

“In light of our massive debt, they should reduce both defense and non-defense spending levels below their current levels and extend the expiring discretionary spending caps to enforce additional deficit reduction,” she said. 

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“Billions In Losses”: Retail Crime Has Surged 93% In Progressive Cities

America’s great cities once symbolized prosperity and culture. Now, many are paying a steep financial price as crime surges and businesses flee. As one line in a new op-ed piece put it, “Crime has a balance sheet. In poorly led cities, that balance sheet is bleeding red ink by the day.”

Retail is bearing the brunt, according to an op-ed by Ted Jenkin at Fox News. The National Retail Federation (NRF) reported U.S. retailers lost $112 billion in 2022 due to theft, up from $94 billion in 2021. Between 2019 and 2023, shoplifting incidents rose 93% and dollar losses climbed 90%. Major chains are pulling back: Target projected $500 million in additional losses this year, Walgreens has shut stores across San Francisco, and Nordstrom left downtown entirely.

“Does it seem insane to you that so many of these retail stores have to lock up much of the merchandise…knowing that they will never be arrested?” the piece asked. The fallout is visible in empty storefronts and shrinking city budgets. San Francisco’s downtown vacancy rate has hit 34.8%, erasing jobs, tax revenue, and foot traffic.

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