Protesters and police clash in eastern Panama
Border police in riot gear launched tear gas and fired rubber-coated metal balls to disperse balaclava-wearing protesters firing rocks from slingshots and throwing Molotov cocktails.
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Yahoo
2 hours ago
- Yahoo
We're Lying to Ourselves About Taxes, Spending, and the Debt
Having extended most of the 2017 Tax Cuts and Jobs Act and added even more tax breaks, Congress is once again punting on the central fiscal question of our time: What kind of government do Americans want seriously enough to pay for? Yes, the "Big Beautiful Bill" avoided a massive tax increase and includes pro-growth reforms. It also adds to the debt—by how much is debatable—and that's before we get to the budgetary reckoning of Social Security and Medicare's impending insolvency. Against that backdrop, it's infuriating to see a $9 billion rescission package—one drop in the deficit bucket—met with cries of bloody murder. The same can be said of the apocalyptic discourse surrounding the Big Beautiful Bill's reduction in Medicaid spending. In spite of the cuts, the program is projected to grow drastically over the next 10 years. In fact, the reforms barely scratch the surface considering its enormous growth under former President Joe Biden. Maybe we wouldn't keep operating this way—pretending like minor trims are major reforms while refusing to tackle demographic and entitlement time bombs ticking beneath our feet—if we stayed focused on the question of what, considering the cost, we're willing to pay for. Otherwise, it's too easy to continue committing a generational injustice toward our children and grandchildren. That's because all the benefits and subsidies that we're unwilling to pay for will eventually have to be paid for in the future with higher taxes, inflation, or both. That's morally and economically reprehensible. Admitting we have a problem is hard. Fixing it is even harder, especially when politicians obscure costs and fail to recognize the following realities. First, growing the economy can, of course, be part of the solution. It creates more and better opportunities, raising incomes and tax revenue without raising tax rates—the rising tide that can lift many fiscal boats. But when we're this far underwater, short of a miracle produced by an energy and artificial intelligence revolution, growth alone simply won't be enough. Raising taxes on the rich will fall short too. Despite another round of loud calls to do so, like those now emanating from the New York City mayoral campaign, remember: The federal tax code is already highly progressive. Here's something else that should be common knowledge: Higher tax rates do not automatically translate to more tax revenue. Not even close. Federal revenues have consistently hovered around 17 percent to 18 percent of gross domestic product (GDP) for more than 50 years—through periods of high tax rates, low tax rates, and every combination of deductions, exemptions, and credits in between. This remarkable stability is no fluke. It reflects a basic reality of human behavior: When tax rates go up, people don't simply continue what they've been doing and hand over more money. They work less, take compensation in nontaxable forms, delay selling assets, move to lower-tax jurisdictions, or increase tax-avoidance strategies. Meanwhile, higher rates reduce incentives to invest, hire, and create or expand businesses, slowing growth and undermining the very revenue gains legislators expect. It's why economic literature shows that fiscal-adjustment packages made mostly of tax increases usually fail to reduce the debt-to-GDP ratio. Real-world responses mean that higher tax rates rarely generate what static models predict as we bear the costs of less work, less innovation, and less productivity leading to fewer opportunities for everyone, rich or poor. If the underlying structure of the system doesn't change, no amount of rate fiddling will sustainably result in more than 17-18 percent in tax collections. Political dynamics guarantee further disappointment. When Congress raises taxes on one group, it often turns around and cuts taxes elsewhere to offset the backlash. Then, when the government does manage to collect extra revenue—through windfall-profits taxes, inflation causing taxpayers to creep into higher brackets, or a booming economy—that money rarely goes toward deficit reduction. It gets spent, and then some. It's long past time to shift the conversation away from whether tax cuts should be "paid for." Instead, ask what level of spending we truly want with the money we truly have. I suspect that most people aren't willing to pay the taxes required to fund everything our current government does, and that more would feel this way if they understood our tax-collection limitations. That points toward the need to cut spending on, among other things, corporate welfare, economically distorting subsidies, flashy infrastructure gimmicks, and Social Security and Medicare. Until we align Congress' promises with what we're willing and able to fund, we'll continue down this dangerous path of illusion, denial, and intergenerational theft—as we cope with economic decline. COPYRIGHT 2025 The post We're Lying to Ourselves About Taxes, Spending, and the Debt appeared first on Solve the daily Crossword
New York Times
2 hours ago
- New York Times
More Than 1,000 Troops Are Withdrawn From L.A.
The Pentagon on Wednesday released more than a thousand troops who had been sent to Los Angeles in June, the latest scaling back of President Trump's contentious deployment of the National Guard in Southern California. The withdrawal of roughly 1,350 members of the Guard comes after thousands of other troops were released in recent weeks. Sean Parnell, the chief Pentagon spokesman, said in a statement that about 250 Guard soldiers would remain in Los Angeles 'to protect federal personnel and property.' The demobilization of most of the California National Guard's 49th Military Police Brigade occurred with only about a week left in what the White House had suggested would be a 60-day deployment that began on June 7. At the height of the deployment, nearly 5,000 members of the Guard had been federalized and dispatched to Los Angeles with orders to help quell protests that had erupted over immigration raids and to protect federal agents conducting the raids. Democratic leaders in the state accused the Trump administration of provoking the protests by sending masked federal agents to carwashes and other workplaces to detain immigrants, and then using the subsequent public outrage over the raids as a pretext for military action. Mayor Karen Bass of Los Angeles compared the deployment to an 'armed occupation,' and Gov. Gavin Newsom sued federal officials, saying that the deployment was an illegal domestic use of federal troops that had diverted the National Guard from critical functions. Figures released by the governor's office on Wednesday showed that fentanyl seizures had fallen significantly after the deployment diverted about a third of the 450 Guard members on a state counterdrug task force. Want all of The Times? Subscribe.
CNN
3 hours ago
- CNN
Treasury secretary calls new Trump accounts ‘a backdoor' way to privatize Social Security
Donald TrumpFacebookTweetLink Follow Treasury Secretary Scott Bessent on Wednesday likened the Trump accounts created by Republicans' massive new domestic policy law to 'a backdoor for privatizing Social Security.' Democrats are already launching political attacks. Bessent was discussing the Trump accounts at a Breitbart policy panel. The federal government will contribute $1,000 into these new tax-deferred investment accounts for US citizen children born between 2025 and 2028, while parents and others can contribute up to $5,000 annually. The funds are intended to be used for higher education, buying a home or starting a small business. The accounts can also be used to help Americans better understand investing and serve as a way to save for retirement, Bessent said. Then he threw out a comment that had Democrats immediately up in arms. 'In a way, it is a backdoor for privatizing Social Security,' he said. 'Social Security is a defined benefit plan paid out. To the extent that if, all of a sudden, these accounts grow and you have in the hundreds of thousands of dollars for your retirement, then that's a game changer, too.' Democrats have long accused Republicans of wanting to privatize Social Security — a topic that sparks intense reactions from Americans who are suspicious of plans to harm the program after they've paid into it for years — and have resurfaced the issue during President Donald Trump's second term. 'Donald Trump's Treasury Secretary Scott Bessent just said the quiet part out loud: The administration is scheming to privatize Social Security,' Tim Hogan, the Democratic National Committee's senior adviser for messaging, mobilization and strategy, said in a statement. 'Trump is now coming after American seniors with a 'backdoor' scam to take away the benefits they earned.' Privatizing Social Security would also enrich Wall Street, said Massachusetts Rep. Richard Neal, ranking member of the House Ways and Means Committee. 'Republicans' ultimate goal is to privatize Social Security, and there isn't a backdoor they won't try to make Wall Street's dream a reality,' Neal said in a statement. 'For everyone else though, it's yet another warning sign that they cannot be trusted to safeguard the program millions rely on and have paid into over a lifetime of work.' Asked for comment on Bessent's remarks, a Treasury Department spokesperson said that 'Social Security is a critical safety net for Americans and always will be.' 'Trump Accounts are an additive government program that work in conjunction with Social Security to broaden and increase the savings and wealth of Americans,' the spokesperson said in a statement to CNN. Republicans in Congress last made a major effort to establish private Social Security accounts in 2005, during George W. Bush's second term. It proved unsuccessful after sparking heavy blowback. Bessent also said Wednesday that the Trump accounts would help address people who are disillusioned with 'the system,' referencing New York State Assemblyman Zohran Mamdani's unexpected win in the Democratic primary for New York City mayor. Mamdani is a democratic socialist. 'When you do this, you make everyone a shareholder,' Bessent said. 'People who are part of the system do not want to bring down the system.' This story has been updated with additional details.
