• Friday May 17, 2019 9:46 AM PDT •
The U.S. government directly owes the nation of China over 1.1 trillion dollars. What would happen if the Chinese government were to weaponize its holdings of U.S. Treasury bonds by suddenly selling off all of them?
That’s an option that has been suggested by Hu Xijin, the editor of the government-controlled Global Times.
Dumping its U.S. national debt holdings is considered to be China’s “nuclear option” for retaliating against the U.S. government in the trade war between the two countries that has been going on for more than a year. CNBC‘s Jeff Cox describes how Beijing might come to deploy this particular economic weapon in its trade war with the United States:
As the two sides engage in a tit-for-tat tariff exchange, the possibility that China might raise the stakes and stop being the world’s biggest consumer of U.S. debt again reared its imposing head Monday.
China currently owns $1.13 trillion in Treasurys, a fraction of the total $22 trillion in U.S. debt outstanding but 17.7% of the various securities held by foreign governments, according to data from the Treasury and the Securities Industry and Financial Markets Association. Should the Chinese decide to walk away or reduce their role in the market, that, at least in theory, could create a substantial dislocation for a country such as the U.S. that relies so much on sovereign entities to buy its paper....
“To me, that is the biggest worry. This is really the biggest weapon they have,” said Sung Won Sohn, professor of economics at Loyola Marymount University and president of SS Economics. “They need to do more to counter the United States. So if push comes to shove, that’s what they are going to resort to.”
Vicki E. Alger
• Thursday May 16, 2019 2:11 PM PDT •
Thousands of public-school students in the nation’s capital could soon be a whole lot safer at school thanks to new legislation being considered in Congress.
Last week, U.S. Rep. Jim Banks (R-IN) introduced a bill that would create Child Safety Accounts (CSAs) for public-school students in Washington, DC, which is the only school district under congressional authority.
The idea is a unique reform that Heartland Institute policy analyst Timothy Benson and I recommended in a policy report published last year, Protecting Students with Child Safety Accounts. As Congressman Banks explains:
School safety and the well-being of children is every parent’s number one concern. In today’s complex world, school safety problems have become more prevalent. Unfortunately, too many students are trapped in unsafe schools.
Alvaro Vargas Llosa
• Thursday May 16, 2019 10:45 AM PDT •
Artificially low interest rates and monetary manipulation of the kind that the developed world, and more specifically the United States, have witnessed since the last financial crisis have consequences. One of them has been the ballooning of corporate debt in this country.
Regardless of how corporate America has used its access to tons of cheap new credit all these years (many companies, as is well known, have simply used it to buy back their own shares, whether it made sense or not, just to make their earnings per share look better), the result today is a highly dangerous level of debt at the heart of the economy.
Raymond J. March
• Wednesday May 15, 2019 1:39 PM PDT •
When he first took office, President Trump pledged to eliminate 75 to 80 percent of all Food and Drug Administration regulations. A recent deregulatory effort is a small step in this direction. It also serves as a comical (and a little concerning) example of how far the agency’s regulatory authority extends.
The FDA recently committed to deregulating the frozen cherry pie market. Specifically, the agency is re-examining current regulations dictating that frozen cherry pies are required to be at least 25 percent cherries by weight and that no more than 15 percent of these cherries may be blemished.
K. Lloyd Billingsley
• Wednesday May 15, 2019 9:37 AM PDT •
Over the years, I have reported on the travails of Gilbert Hyatt, inventor of the first single-chip microprocessor way back in 1990. The invention earned Hyatt a lot of money, so he decamped from California, which levies income tax, to Nevada, which does not. California’s pillage people, otherwise known as the Franchise Tax Board, claimed the inventor lied about his residency and socked him with a bill of $13.3 million in back taxes and penalties.
In Nevada, Hyatt sued the FTB for harassment, fraud, and invasion of privacy. Nevada wound up awarding Hyatt $490 million in damages, later reduced on appeal, but the California pillage people still pursued the inventor. By August of 2017, the FTB claimed interest had boosted Hyatt’s tax tab to a whopping $55 million. The case landed with California’s Board of Equalization, which by a 3-2 vote ruled that Gilbert Hyatt was, in fact, a Nevada resident when California tax collectors charged him with lying about his residency.
K. Lloyd Billingsley
• Tuesday May 14, 2019 10:36 AM PDT •
Back in 2016, Gov. Jerry Brown appointed David Ashby, 39, as a judge in Sutter County Superior Court, a post that pays an annual salary of $191,612. Judges are expected to administer justice in an impartial manner and guard public safety. Californians have to wonder about Ashby’s performance in a recent felony DUI and triple manslaughter case.
On May 4, Ismael Huazo-Jardinez, 33, was speeding down Highway 113 in the agricultural community of Knight’s Landing. The driver failed to negotiate a curve and smashed his Chevrolet Avalanche into a trailer home, claiming the lives of Jose Pacheco, 38, Anna Pacheco, 34, and their son Angel, who was only 10. The crash also left the Pacheco’s daughter Mariana, 11, with serious injuries.
• Monday May 13, 2019 4:26 PM PDT •
In April 2019, the U.S. government set a new all-time record for the amount of money it collected through taxes in a single month, but at the same time, the budget deficit grew because government spending grew even more than revenue. The Associated Press‘ Martin Crutsinger has the story:
The federal government recorded a $160.3 billion surplus in April as revenues for the month jumped to an all-time high. But even with a flood of tax receipts, the deficit so far this year is running 37.7% higher than a year ago.
The Treasury Department reported Friday that the deficit for the first seven months of the budget year that began Oct. 1 totals $530.9 billion, compared to a deficit of $385.5 billion for the same period a year ago.
The Trump administration projected in March that this year’s deficit will hit $1.1 trillion, up from last year’s deficit of $779 billion.
K. Lloyd Billingsley
• Thursday May 9, 2019 9:39 AM PDT •
“For more than three years, workers have been sounding alarms about [the University of California’s] efforts to outsource living wage jobs to poverty wage contractors. These latest charges highlight the scope of the University’s increasingly radical privatization scheme, which is ultimately focused on one thing—paying its lowest wage workers even less.”
That was Kathryn Lybarger, Local 3299 president of the American Federation of State, County, and Municipal Employees (AFSCME), in a May 2, 2019 statement. “This is not just about UC’s serial lawbreaking,” Lybarger added, “but its efforts to eliminate the last remaining middle-class careers in California.” With no apology to the understated union boss, the outsourcing is “just about” something else.
• Wednesday May 8, 2019 9:54 AM PDT •
Many people lost a lot of money betting on Maximum Security to win the 2019 Kentucky Derby last weekend. The horse had been the favorite to win the 145th running of the Derby before the race, but was disqualified by track officials following its first-place finish, which vaulted the long shot Country Home into the winner’s circle in its place.
True, nobody could have predicted this particular outcome for the race and the circumstances under which it happened with any degree of confidence before it started, but for those who gambled on the horses running in the race, there was one certainty: the most they could lose by betting on the wrong horse to win was the amount of money they chose to bet. With that kind of certainty, most of the people who bet on the race gambled only money they could afford to lose if the outcome didn’t go their way.
Raymond J. March
• Tuesday May 7, 2019 11:57 AM PDT •
Imagine someone who has late-stage amyotrophic lateral sclerosis (often called ALS or Lou Gehrig’s Disease). After battling the disease for years, the patient is largely paralyzed and their quality of life is drastically diminished. With no known cure, any attempts to prolong the patient’s life will be risky.
Who should decide whether the risk is worth taking? Should it be policymakers and bureaucrats? Or should the patients, their physicians, and willing drug providers be allowed to weigh the pros and cons themselves?
Right-to-try laws argue for the latter.