Welcome to the weekly QuizCap, a fun way to test your knowledge on what’s going on in Washington. This week we have record high values, more spending, and lactating almonds? Let’s get started!
President Trump boasted last week when the 2nd quarter GDP growth numbers came in at 4.1 percent. What level of sustained economic growth is needed to balance the budget in 10 years?
While a single quarter of 4.1 percent growth should be celebrated, nobody should count on it lasting for an entire year, let alone a decade. That level of growth has only occurred once over a 10 year period (1959-1968) and the U.S. has not hit that level of growth annually since 1984. According to the CRFB, 1.4% of the 4.1 number is due to temporary factors such as rushed soybeans shipments to beat tariffs and temporary legislative boosts.
While GDP booms, a new record was set this week. Which American company became the first to have a market value of $1 trillion.
While all the FAANG (Facebook, Apple, Amazon, Netflix and Alphabet's Google) tech stocks are doing well in the last 12 months, Apple became the first to hit the big $1 trillion mark. In other $1 trillion-mile marker news, the federal government’s deficit is also supposed to hit $1 trillion next year.
Consumer spending is certainly helping Apple reach these high marks. What about saving? Between 1960 and 1984, the personal savings rate in the United States never dropped below 8 percent. What was the personal savings rate in 2017?
And that’s not the only story. U.S. Household debt is at an all-time high $13.2 trillion, rebounding since the 2008 financial crisis. Lower interest rates and a stronger economy has made this debt manageable, but these trends might not last forever.
The Treasury announced this week that it needs to borrow $769 billion from July to December – 63% higher than the same period last year. The Treasury is also looking into indexing capital gains taxes. What impact would that have on the debt?
While proponents of indexing capital gains argue that investors should not be taxed on inflation, we would argue that Congress shouldn’t rely on the next generation to pay for all their spending.
Speaking of spending, the Senate passed a package of four spending bills this week (agriculture, financial services, interior-environment, and transportation-housing). How much more did these bills spend than the President’s request?
They spent $1.9 billion more than last year, and a whopping $37.1 billion more than the President’s request. Reminder, Republicans control both houses of Congress. Second reminder, Congressional Republicans love to spend money too.
The federal government is not the only government facing financial woes. The pension shortfall faced by states and cities is the equivalent to what?
A recent estimate found that pension funds are short by $4 trillion, the equivalent of the economy of the world’s fourth-largest economy. Politicians making promises they can’t keep to get into office. Sound familiar?
Putting off problems is a political past time. Just in time for hurricane season, the federal flood insurance program was extended through November. How many program changes have been made to it since last year’s record floods?
While hardly a reform, Congress did forgive $16 billion of its debt. It is still $20 billion in the hole. Other than that, nothing changed in the program that is projected to lose $1.6 billion per year. For the 39th time out 42 reauthorizations, Congress decided to do nothing to fix the NFIP. Check out our In The Floodplain music video for more information on the program’s problems.
True or false: Almonds lactate
The FDA Commissioner remarked in an event this week that “An almond doesn’t lactate, I will confess.” No matter, the Senate voted to support an FDA study to see if consumers think that dairy milk is confused with other products referred to as milk, such as almond-, coconut, and soy. Diary farmers and the people that serve their interests in Congress may want to save the word milk just for cows.
The Department of Interior Inspector General is investigating what potential impropriety by Interior Secretary Ryan Zinke?
Though Zinke denies involvement, the IG is looking into Zinke’s involvement in a new brewery in Whitefish Montana that was financed by the chairman of Haliburton. Sounds fishy.
Congress passed the 2019 National Defense Authorization Act. The recent budget deal increased the defense spending caps to $639 billion for 2019. How much does the bill authorize to spend?
How did the bill provide more than the budget caps? By designating another $69 billion as “overseas contingency operations” or OCO. OCO funding does not count against the caps, thus allowing Congress to spend more on defense. OCO was created as an emergency account to pay for unforeseen wars after 2001. Seventeen years later, it’s used as a slush fund to get around budget restraints.
In a recent poll, how many Americans believe that the President and Congress should address the national debt?
While it should be 100 percent, four out of every five people say that Congress should deal with the national debt.
What has Congress done this week to address our major debt problems?
Larry Kudlow, President Trump’s economic advisor did say this week that the Administration is going start really taking on the exploding deficits by cutting spending. The thing about cutting spending is...that you have to actually cut spending. This week, Congress continued to increase spending while the administration contemplated cutting revenues.