$1.65 Trillion Boondoggle Coming Right Up

The worst people in politics from both parties have teamed up to demand Congress rubber-stamp a 4,155-page blank check—many times the length of the Bible.

A check for $1,700,000,000,000 of your money.

And they want it stamped before anyone can actually read it.

Sounds legit.

— Edward Snowden (@Snowden) December 20, 2022

Gross Negligence

Congressional leaders expect Congress to vote on this monstrosity this week. No lawyer or business executive would ever approve an agreement this long without weeks or months of review and due diligence. Our government is grossly irresponsible and undemocratic. https://t.co/9zryLWDBnM

— Justin Amash (@justinamash) December 20, 2022

The Ugliest Omnibus Bill Ever

The Wall Street Journal calls this The Ugliest Omnibus Bill Ever

The 117th Congress has been the most spendthrift in history, and this week it plans to go out with one final bipartisan back-slapping hurrah—a 4,155-page omnibus spending bill that is the worst in history. This is no way to govern in a democracy, but here we are.

The Members, in their efforts to disguise what they’re doing, rolled out the final product late Monday night. They plan to whip it through by Thursday while Americans are busy with pre-Christmas plans and before even the Members know what they’re voting on.

This didn’t have to be. Congress could pass a short-term funding bill and kick this mess to next year when the GOP House would have more leverage. 

Some Omnibus Bill Details 

• Democrats failed in their duty to pass normal spending bills, so they are using this omnibus to finance all of government with $1.65 trillion for fiscal 2023.
• $800 billion, a 9.3% increase and “the highest level for non-defense funding ever.” 
• The domestic accounts include increases for food stamps, heating assistance, Pell grants and Head Start. 
• The bill provides a $25 million funding boost for the National Labor Relations Board, which now exists to harass business on behalf of Big Labor. 
• There’s a 30% increase for the Child Care and Development Block Grant Program, which the left hopes to build into a universal entitlement.
• Congress is jamming through major changes in public-land management; a plan to phase out large-scale driftnet fishing; new oversight on horse-racing; a restructure of the U.S. Patent and Trademark Office;and alterations to lobster regulation. 
• Changes help Boeing meet aircraft-certification deadlines

The Way Things Work

Please note the WSJ is praising $858 billion for defense, a 9.7% increase and $45 billion more than President Biden sought. 

The WSJ calls that one of the few "bright spots". Another "bright spot" is $45 billion in new military and economic aid for Ukraine while the EU only offers Ukraine loans, and small ones at that.

As I see things, that's at least ($858 billion + $45 billion = $903 billion) for military spending out of the total $1.65 trillion. 

This is the way Congress works. You vote for my excesses and I vote for yours. 

Republicans will pass this monstrosity while blaming the Democrats all next year for the deficit.

Recession Coming Up

In case no one noticed, a recession is coming up and we are going to have a far bigger deficit than anyone will admit.

Expect tax receipts to collapse across the board. Expect major stress.

Forget you and me, the Fed knows how to prevent stress on banks in a downturn. 

Free Taxpayer Money to Banks

Free money to banks, Mish calculation

Please consider the question How Much Free Taxpayer Money is the Fed Giving to Banks?

The Fed pays interest to banks on reserves the Fed crammed down banks throats. There is over $3 trillion in reserves that the Fed pays 4.33 percent and rising interest on.

Two forces are in play. A reduction in reserves by QT lowers the free money. Rate hikes by the Fed increase the amount of free money.

For 2021 I estimate about $100 billion in "free" taxpayer money will be given to banks this year. 

For 2022 I expect free money to be about $200 billion if the Fed gets in expected rate hikes. If not, it will be another $100 billion or so. 

The Fed should not be paying any interest on these deposits and hundreds of billions of dollars would then flow to the US treasury. 

Meanwhile, banks collect 4.33% on its deposits at the Fed while paying almost nothing on checking and savings deposits.

No one in Congress is complaining. 

The Top in the US Dollar Is In. Where to From Here?

Yesterday, I commented The Top in the US Dollar Is In. Where to From Here?

The answer appears lower as deficit spending is poised to go out of sight. That will add to inflation. 

So will Biden's reckless energy policy.

Who Cares?

The Democrats don't care, they want higher taxes to support it. Republicans pretend to care but sign off every time. 

Which one is worse? 

You tell me. The whole thing is disgusting.

More By This Author:

The Top In The U.S. Dollar Is In. Where To From Here?
Housing Starts Flat In November But Permits Unexpectedly Collapse By 11 Percent
NAHB Housing Sentiment And Present Conditions Crash To Covid-19 Lows