Congressional Clown Show Bankrupts America

Commentary Seemingly lost in the day-to-day nonsense of our political theater is the fact that the United States Congress is responsible for passing an annual budget. You know, one of those things that determines how you spend your money and keeps you from going broke. Well, once again our elected leaders on Capitol Hill have failed. And once again they will plunge the country into financial chaos. The Reason There Is No Fiscal Discipline The federal government’s budget is actually made up of various appropriations bills—12 in all. These are important because technically Article I, Section 9, of the Constitution states that, “No Money shall be drawn from the Treasury, but in consequence of Appropriations made by Law.” But that’s a minor detail. By the time the 2022 fiscal year began on Oct. 1, 2021, they had enacted exactly ZERO of these bills. Even though it’s required by the Constitution, this isn’t unusual. The last time the government approved all 12 bills into a budget by the start of the fiscal year was 1997. It’s very clear and obvious to anyone with a pulse, Congress spends well beyond whatever means they might try to set for themselves. But here’s the point: their solution to this fiscal gridlock is even worse than the problem. When our legislative branch can’t approve the required appropriations bills in time, they resort to something called a “continuing resolution” or CR. CRs are short term spending bills that allow the government to continue to operate—if you consider this kind of logjam “operating”—until they can work the kinks out of the spending bill. It’s like getting a pay-day loan while you’re waiting for your loan from the bank to come through. It’s February 2022 and we’re already on our second CR. The current CR expires in the middle of the month. So once again the country is running out of money. And as time goes on, and sticking points become entrenched in this clown show called Congress, they eventually resort to throwing together the appropriations they can agree on into what’s called an omnibus bill. (“Omnibus” of course being Washington-ese for “all the other crap we need to throw money at to placate our super PAC donors.”) These are financial atrocities. The last omnibus bill passed by Congress in December 2020—the one that contained $900 billion in COVID-19 relief spending—included among other things: $453 million to Ukraine $500 million to enhance “border security” in Jordan (border security. In Jordan. Let that sink in) $10 million for “gender programs” in Pakistan $4 billion for Navy weapons procurement $2 billion for the Space Force $208 million to upgrade the Census Bureau’s computer systems (once the census comes around again in 10 years it’ll all be obsolete again) $4.9 million for the screwworm program (don’t ask, I have no idea) $40 million for the Kennedy Center (I believe the orchestra is still laid off?) $65 million to restore the Pacific salmon population $750 million to fossil energy research and development (I thought fossil fuel was the enemy?) $135 million for the United States Courthouse in Hartford, Connecticut (yes, one courthouse). They’re now debating another fiscal embarrassment of similar proportions, no doubt. Riding the ‘Omnibus’ to Oblivion This lack of fiscal discipline is really an affront to our economy. And it’s coming at a time when we can least afford it. Thanks to the carnage caused by the pandemic lockdowns, an absolutely unthinkable amount of money has been unleashed into the U.S. economy. According to the Committee for a Responsible Federal Budget, $9.9 trillion has been disbursed out of $13.7 trillion of allowed funds. Spending money they don’t have… on things that won’t make a difference in the lives of any average Americans… except in their cost of living. We’ve lost our fiscal way. What was once just congressional haggling-as-usual has, in the face of this rampant spending, become an abdication of their moral responsibility. The business of government is bankrupt. Absent the ability to sell Congress short, investors need a way to protect themselves from this insane fiscal irresponsibility. The end results of this consistent and massive waste will almost certainly be a growing wealth gap, a decrease in the average person’s standard of living, and a lot more uncertainty. A defensive portfolio would include value stocks (like almost anything Warren Buffett owns), cyclical companies like those in the consumer discretionary sector, and of course gold. Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times. Follow Bob Byrne built a reputation as a daily columnist for TheStreet.com after trading billions of dollars over two decades in financial markets. He now co-authors Streetlight Confidential investment newsletter with Tim Collins that focuses on under-the-radar companies and investment opportunities often o

Congressional Clown Show Bankrupts America

Commentary

Seemingly lost in the day-to-day nonsense of our political theater is the fact that the United States Congress is responsible for passing an annual budget.

You know, one of those things that determines how you spend your money and keeps you from going broke.

Well, once again our elected leaders on Capitol Hill have failed.

And once again they will plunge the country into financial chaos.

The Reason There Is No Fiscal Discipline

The federal government’s budget is actually made up of various appropriations bills—12 in all. These are important because technically Article I, Section 9, of the Constitution states that, “No Money shall be drawn from the Treasury, but in consequence of Appropriations made by Law.”

But that’s a minor detail.

By the time the 2022 fiscal year began on Oct. 1, 2021, they had enacted exactly ZERO of these bills. Even though it’s required by the Constitution, this isn’t unusual. The last time the government approved all 12 bills into a budget by the start of the fiscal year was 1997.

It’s very clear and obvious to anyone with a pulse, Congress spends well beyond whatever means they might try to set for themselves. But here’s the point: their solution to this fiscal gridlock is even worse than the problem.

When our legislative branch can’t approve the required appropriations bills in time, they resort to something called a “continuing resolution” or CR. CRs are short term spending bills that allow the government to continue to operate—if you consider this kind of logjam “operating”—until they can work the kinks out of the spending bill. It’s like getting a pay-day loan while you’re waiting for your loan from the bank to come through.

It’s February 2022 and we’re already on our second CR. The current CR expires in the middle of the month. So once again the country is running out of money.

And as time goes on, and sticking points become entrenched in this clown show called Congress, they eventually resort to throwing together the appropriations they can agree on into what’s called an omnibus bill. (“Omnibus” of course being Washington-ese for “all the other crap we need to throw money at to placate our super PAC donors.”) These are financial atrocities.

The last omnibus bill passed by Congress in December 2020—the one that contained $900 billion in COVID-19 relief spending—included among other things:

  • $453 million to Ukraine
  • $500 million to enhance “border security” in Jordan (border security. In Jordan. Let that sink in)
  • $10 million for “gender programs” in Pakistan
  • $4 billion for Navy weapons procurement
  • $2 billion for the Space Force
  • $208 million to upgrade the Census Bureau’s computer systems (once the census comes around again in 10 years it’ll all be obsolete again)
  • $4.9 million for the screwworm program (don’t ask, I have no idea)
  • $40 million for the Kennedy Center (I believe the orchestra is still laid off?)
  • $65 million to restore the Pacific salmon population
  • $750 million to fossil energy research and development (I thought fossil fuel was the enemy?)
  • $135 million for the United States Courthouse in Hartford, Connecticut (yes, one courthouse).

They’re now debating another fiscal embarrassment of similar proportions, no doubt.

Riding the ‘Omnibus’ to Oblivion

This lack of fiscal discipline is really an affront to our economy. And it’s coming at a time when we can least afford it.

Thanks to the carnage caused by the pandemic lockdowns, an absolutely unthinkable amount of money has been unleashed into the U.S. economy. According to the Committee for a Responsible Federal Budget, $9.9 trillion has been disbursed out of $13.7 trillion of allowed funds.

Spending money they don’t have… on things that won’t make a difference in the lives of any average Americans… except in their cost of living.

We’ve lost our fiscal way.

What was once just congressional haggling-as-usual has, in the face of this rampant spending, become an abdication of their moral responsibility.

The business of government is bankrupt.

Absent the ability to sell Congress short, investors need a way to protect themselves from this insane fiscal irresponsibility. The end results of this consistent and massive waste will almost certainly be a growing wealth gap, a decrease in the average person’s standard of living, and a lot more uncertainty. A defensive portfolio would include value stocks (like almost anything Warren Buffett owns), cyclical companies like those in the consumer discretionary sector, and of course gold.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.


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Bob Byrne built a reputation as a daily columnist for TheStreet.com after trading billions of dollars over two decades in financial markets. He now co-authors Streetlight Confidential investment newsletter with Tim Collins that focuses on under-the-radar companies and investment opportunities often overlooked by Wall Street. To discover how to get his proprietary research in the paid newsletter service, go to Streetlight Confidential.