Without important regulations, we risk higher prices, lower quality, and worst of all, recessions. Yes, you heard me—deregulation was responsible for the 2007-2008 financial crisis. 

Regulation is a set of penalties and rewards associated with certain actions. 

Central to regulation is the notion of feedback loops. Some actions are rewarded and therefore encouraged; others are punished and therefore discouraged. Regulation that works “well” for consumers will trigger a set of penalties for high prices, shoddy quality, or excessively risky loans, to take just three examples. 

Americans love their fast-food supersized. But supersizing the Internal Revenue Service?

Probably not so popular.

That’s evidently of little concern to a majority of Congress. Lawmakers are poised to pass a large tax-and-spending bill, which Biden is eager to sign, that would increase IRS funding by an astounding $80 billion. The legislation “provides 14 times as much funding for ‘enforcement’—as in fishing expedition audits—than it does for ‘taxpayer services’ such as answering the phone,” according to Ben Susser of Americans for Tax Reform.

Let’s play a game. What do you think the fastest growing category of spending for the U.S. government will be over the next 30 years?

Here are your choices:

• Social Security
• Medicare
• Medicaid, Children’s Health Insurance Program (CHIP), Obamacare Subsidies
• Net Interest on the National Debt
• Everything Else

“After decades of failure, California dusts off controversial Delta tunnel water project,” headlines a July 27 Modesto Bee report. As author Dale Kasler explains, the administration of Governor Gavin Newsom has unveiled “a downsized version of the controversial, multibillion-dollar plan to re-engineer the fragile estuary on Sacramento’s doorstep that serves as the hub of California’s over-stressed water-delivery network.”

As we noted in 2015, Governor Jerry Brown proposed to drill two massive tunnels under the Sacramento-San Joaquin River Delta, at an estimated cost of $25 billion. As Katy Grimes of the California Globe notes, each tunnel would be 150 feet below ground, 40 feet in diameter and 30 miles in length. All told, Brown’s original “Waterfix” project was “bigger than the English Channel Tunnel.” 

As expected, the United States posted negative growth for the second consecutive quarter, according to government data released on Thursday.

“Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter,” the US Bureau of Economic Analysis announced.

The news prompted many outlets, including The Wall Street Journal, to use the R word—recession, which historically has been commonly defined as “economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

Netflix just dropped its high octane action movie The Gray Man on its streaming service. The streaming service reportedly dumped $200 million into the film’s production budget. While the money shows in its production values and top-flight acting, the storyline and plot don’t quite measure up.

This is surprising since the movie is directed, written, and produced by the Russo brothers (and others). The Russos are the dynamic duo of filmmaking: Their commercially released films have grossed nearly $6.7 billion worldwide on combined production budgets of $1.2 billion. Netflix is betting big on The Gray Man.

The Congressional Budget Office issued its Long-Term Budget Outlook for 2022 last week. The CBO’s view of the U.S. government’s fiscal future is, as always, really depressing. However, the new report drives home what the CBO’s analysts see as the most prominent fiscal threat to Americans: the U.S. national debt.

The analysts don’t come flat out and say it, but that’s the clear takeaway from the figures they used to illustrate the report’s visual summary. Here is the closely related pair of charts they’ve used to send that message:

How high can Uncle Sam afford interest rates to rise?

That has become more than an academic question since President Biden signed the American Rescue Plan Act into law in March 2021. The act marked the beginning of a surge of inflation for American consumers, which reached 9.1% in June 2022.

The Federal Reserve has been hiking interest rates to fight that inflation. Since March 2021, the Federal Funds Rate has risen from 0.07% in March 2021 to 1.21% in June 2021, with another .07 increase recently announced. That increase is forcing the interest rates the U.S. government pays on the trillions it borrows to rise as well.

“Ana Matosantos, 46, of Sacramento, has been appointed to the University of California Board of Regents,” proclaims Gov. Gavin Newsom in a July 22 press release. Matosantos, a Democrat who hails from Puerto Rico, has served as the governor’s Cabinet Secretary since 2019. The press release omits another key appointment. 

As we noted, in 2019 Governor Newsom appointed Matosantos state “Energy Czar,” calling her a “genius” and a person of “unrivaled professional accomplishment.” The unrivaled genius failed to prevent another round of rolling blackouts and continued energy woes. That should come as no surprise.

As more and more Hollywood films go “woke,” The Black Phone is a breath of fresh air. The well-crafted multi-genre horror film is also perhaps the year’s first bonafide sleeper. The small budget film has grossed over $100 million at the box office before going into streaming.