Dear Salud

Thank you for your email of December 28 where you asked what I wanted Congress to work on in 2025. It’s an honor to be able to advise you on the important issues of our time. The list of 19 items you provided was very helpful to focus on specific issues.

So here’s what I think Congress should do in 2025.

There was one really important thing that wasn’t on your list that just about everyone says really needs Congress’s attention and that is federal spending and the deficit. I was surprised it wasn’t mentioned. There are dire warnings from the Congressional Budget Office (CBO) about deficit spending. At a minimum, the CBO says if we keep overspending, Medicare and Social Security will have to cut services by 2036 and 2033, respectively, to avoid bankruptcy. Even the CBO says you can’t tax the rich enough to balance the budget. Yet if we keep going the way we are, it’s not an exaggeration to say that we’ll end up like Greece (bankrupt). Most economists say the only solution is to cut spending. Perhaps you could support Trump’s proposed Department of Government Efficiency’s efforts. At least it’s a start.

Combating Inflation is a good suggestion. I can tell you that you can’t combat inflation by spending more, like the 1984-ishly entitled “Inflation Reduction Act of 2022” did. It was a huge $369 billion spending bill that contributed to inflation. 

What causes inflation is “printing” money. Here’s how. When Congress spends more than it takes in, the U.S. Treasury borrows the money to pay for it (issued bonds). In 2022-2023 the deficit was $1.7 trillion and they issued about the same amount of new bonds. Because that is a huge amount, in order to keep the debt markets from exploding, the Fed bought the debt. But… they paid for it by “printing” new money (actually it’s done by a few computer keystrokes). From 2020 to 2022, to stabilize the debt markets, the Fed bought about $4.75 trillion of debt by creating new money. That was an unheard expansion of the money supply by a major economy (M1 +500%). The result is that we had 9+% inflation. 

This is why deficit spending causes inflation.

You give two suggestions for farmers: pass aFarm Bill and support Central Coast farmers. Please don’t do that. These are just more unnecessary spending giveaways. The farm bill subsidies are welfare to farmers that arose out of FDR’s New Deal during the Great Depression. Ninety years later farm bills are just wasteful spending to appease the farming lobby run by large corporate farmers. My wife’s family have been small Central Coast farmers since the 1950s (lemons, avocados, and cherimoyas). They have never received government assistance. As a result they have had to respond to changing consumer demand without government help, for example, from lemons to avocados. Unlike us, subsidized farmers have a nice cushion and are less exposed to market risks. Nice work if you can get it.

The crops that get the most subsidies (ranked in order from the most) are: corn, soybeans, wheat, cotton, rice, and dairy. Not much of that here on the Central Coast. It’s not like we won’t find bread and milk on the shelves if subsidies are ended. I’m sure the subsidized farmers are happy to get the money, but more useless spending doesn’t help.

I’ll tell you what Central Coast produce farmers would like: less regulation. All the farmers that I know, mostly second or third generation, are environmentally conscious and do what they can to protect the land and the environment. They do complain about the arbitrariness of the huge amount of regulations federal and state governments impose on them. It’s a very challenging business for farmers. 

You made suggestions about creating good-paying jobs, affordable housing, affordable childcare, affordable health care, affordable college education, etc. I believe these are all unaffordable spending programs. Government doesn’t create any of these things, only the private economy does that. If you raise taxes to pay for all these government programs you just remove capital from the private economy which does create jobs – and makes possible all the other things you want the government to do. Most of the high cost of these things has to do with government programs and regulations anyway. I would be happy to provide information to point out which programs are wasteful and raise costs, but I’ll defer to the Department of Government Efficiency to do that for you. 

Lastly I do wish Congress would fix the broken immigration system. The numbers vary widely because the Biden Administration doesn’t know how many immigrants they let flood into the country. Eight million? Ten million?

I’m sympathetic to immigrants who come to America to seek a better life. I would do the same if I came from a poor, corrupt, and violent country. I know a lot of immigrants, mostly “undocumented.” They all work hard, are honest, and do their best to succeed here. But there needs to be an orderly process and we don’t have one now. 

Here are some suggestions to start with. Revise and pass the Dream Act and let in those kids who came in with their parents plus youths who have graduated high school here and are good citizens. Let in people who have lived and worked here for 10 years, paid taxes, and have been good citizens. Let in qualified people who are willing to be trained and can qualify as caregivers. Let in all the smart doctors, engineers, computer whizzes, and scientists with degrees in specialties in demand here. Let in those willing to make substantial investments in American businesses. 

We need more skilled workers in America. Start working on a new bill that is good for America, not the billions of underprivileged worldwide.

Salud, I sincerely hope this helps you focus on important issues for 2025. Good luck!