Richard J Grant

Published in The Tennessean , Sunday, April 24, 2011 by Richard J. Grant Most of us know what Charles Dickens meant when he wrote, "Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery." As individuals, we are quick to see the consequences of spending beyond our incomes. But the lesson is not so obvious when the government does the spending for us. Currently, the U.S. Government is spending about 25 percent of our Gross Domestic Product (GDP), which means that the federal government alone is spending a quarter of what we produce each year. But tax revenues won't keep up with this level of spending. Revenues have recently been below 15 percent of GDP and rarely reach 20 percent. The government is either unable or unwilling to do what is necessary to raise revenue to match its appetite for spending. Countries with higher percentages of government spending als...

A shortened version was published in The Tennessean , Sunday, April 17, 2011 The President’s speech misses the point by Richard J. Grant Last Wednesday, President Barack Obama delivered a televised speech that had been billed as a major policy statement on the budget. What listeners actually received was a campaign speech that played fast and loose with anything resembling fact but did reveal much about the Obama vision of America. The president attempted to contrast two different visions of America, his own versus one “championed by Republicans in the House of Representatives.” The latter was a reference to the Republican budget plan for Fiscal Year 2012 as presented the week before by Congressman Paul Ryan (R-WI), chairman of the Budget Committee. The Ryan plan would cut about $6 trillion (over 10 years) from the spending increases projected in the budget previously offered by the president. Even with $6 trillion of cuts, the Ryan plan would not achieve a balanced budget in 10 years....

April 7, 2011 The Ryan plan offers a serious benchmark for deficit reduction by Richard J. Grant During the entirety of 2010, Democrats held majorities in both houses of Congress. Nevertheless, they failed to pass a budget for the 2011 fiscal year. Then, earlier this year, when the newly elected Republican majority in the House of Representatives tried to remedy this by passing HR1, the Democrat-controlled Senate voted the bill down. Now we witness the spectacle of a series of continuing resolutions to keep the government funded for just a few weeks at a time, with a recurring threat of a government “shutdown.” HR1 was intended to reduce government spending closer to 2008 levels. Instead, the continuing resolutions have been bringing down spending a few billion dollars at a time. These cuts are helpful, but are a tiny percentage of the total budget, and will have a barely perceptible effect on the projected budget deficit of $1.65 trillion. With the FY2011 drama still playing out, Hous...

A shortened version was published in The Tennessean , Sunday, April 3, 2011 Speculators provide a service by Richard J. Grant French consumers import significantly more Libyan oil than do American consumers. Knowing this, many Americans believe that a disruption of Libyan oil production would not have much effect on our price of oil. It would appear that the French would bear the brunt of the sudden scarcity and the consequential price increases. That might be true in the very short term, but then what? As French consumers quickly bid up the price for remaining supplies of oil, their willingness to pay higher prices would attract supplies that might otherwise have gone to other parts of the world. That includes oil that might have come to us, whether produced in the US or abroad. A characteristic that oil shares with money is that both are fungible. This means that one...