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CBDC: The Impacts On Freedom, Privacy, & Economic Development

CBDC: The Impacts On Freedom, Privacy, & Economic Development

Authored by Pedro Saltini via The Mises Institute,

Recent research highlights a concerning trend: 84 percent of Americans are afraid to exercise their freedom of speech, according to a New York Times Opinion/Siena College Poll. While this statistic alone is alarming, it only scratches the surface of a broader issue—the gradual erosion of personal liberties. This decline extends beyond speech into the domains of thought, cognition, and economic autonomy. As this erosion continues, new technologies threaten to accelerate it. Among these is the development of Central Bank Digital Currencies (CBDCs), which have been at the forefront of recent policy discussions. Though marketed as innovations to improve financial inclusion and efficiency, CBDCs raise legitimate concerns about freedom, privacy, and government overreach.

State Monopolization and the Market

To understand the potential dangers of CBDC adoption, it is critical to revisit Max Weber’s definition of state power. In Politics as a Vocation, Weber describes the state as the institution that successfully claims a monopoly on the legitimate use of physical force within a given territory. This definition is particularly relevant in the context of financial systems. Historically, markets have thrived on competition, innovation, and the decentralized nature of monetary policy. CBDCs, however, represent an attempt by the state to monopolize and centralize financial transactions under one digital umbrella.

Senator Kirsten Gillibrand has articulated that a CBDC could enhance financial inclusion, lower transaction costs, and improve monetary policy. While such benefits may appeal to those unfamiliar with economics, they conceal significant risks. As Friedrich Hayek warned, government control over economic systems is a dangerous path, inevitably leading to greater centralization and reduced personal freedom. The “invisible hand” of the market has proven far more reliable than the visible hand of state intervention. The question is whether we are willing to trade efficiency for liberty.

Lessons from Nigeria’s eNaira

One need only look at Nigeria’s eNaira to glimpse the possible future of CBDCs. Introduced in 2021 following a cryptocurrency ban, the eNaira was supposed to usher in a new era of financial stability. Instead, it became a tool for government control. Initially framed as a way to reduce physical cash transactions and promote digital payments, it soon encountered significant obstacles, including volatility, high transaction costs, and a lack of transparency due to its closed, centralized blockchain.

The Nigerian government imposed strict limits on eNaira wallets, including daily withdrawal caps and balance restrictions. Despite government promises that physical cash would remain in circulation until the eNaira was fully operational, over half the population was left holding worthless old banknotes. This left millions of impoverished Nigerians unable to access basic financial services. Far from promoting inclusion, the eNaira deepened existing economic inequalities.

This case study highlights a crucial lesson: CBDCs are not neutral technologies. They come with inherent risks that disproportionately affect society’s most vulnerable. For developing nations like Nigeria—where over 90 percent of the population lives on less than $6.85 per day—the consequences of poorly-implemented digital currencies are devastating. But even in developed nations like the United States, such policies pose serious risks.

CBDC in the United States

Although the United States is not yet on the brink of adopting a full-scale CBDC, the Federal Reserve has explored the concept. Bank of America suggests that a digital dollar is unlikely in the immediate future. However, the Federal Reserve itself acknowledges several risks associated with CBDCs, such as impacts on financial stability, the cost and availability of credit, and the safety of the broader financial system. These risks are not theoretical; they are grounded in historical experience and economic logic.

Austrian economists have long argued that sound money should emerge naturally through the market, not through state coercion. Ludwig von Mises stated that “the excellence of money lies in its value beyond mere exchange.” Money’s role is to facilitate voluntary exchange and store value—not to serve as a tool for government monitoring and intervention. A CBDC represents a radical departure from these principles, creating a monetary system that is entirely dependent on government policy.

In addition to the financial risks, CBDCs present an existential threat to privacy. The Federal Reserve claims that a future CBDC would aim to balance transparency with consumer privacy. However, as Murray Rothbard argued in The Ethics of Liberty, there is no “balance” to be struck when it comes to privacy. The right to property implies the right to control how that property is used without interference. A CBDC undermines this fundamental right by allowing the state to monitor every transaction, effectively eliminating financial privacy.

Historical Parallels: Lessons from Fiat Money and Gold

The rise of fiat money offers important historical parallels to the current debate over CBDCs. Just as fiat currencies replaced commodity-backed money, CBDCs could replace cash and other forms of decentralized currency. The transition to fiat money was marked by government overreach and monetary instability. As Frédéric Bastiat once observed, “The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.” This fiction becomes even more dangerous when applied to money itself.

The Austrian School’s critique of fiat money is directly applicable to CBDCs. Fiat money—unlike gold—has no commodity value and is subject to manipulation by central authorities. Similarly, a CBDC would be little more than a digital token, entirely dependent on government policy for its value. This creates an incentive for governments to inflate the money supply and erode the purchasing power of ordinary citizens. Over time, this could lead to widespread economic instability and social unrest.

How to Oppose CBDC: The Austrian Approach

Given these risks, how can we effectively oppose the development of CBDCs? The Austrian approach offers a clear roadmap. First and foremost, education is key. Many people lack a basic understanding of economics, leaving them vulnerable to misleading narratives about the supposed benefits of digital currencies. It is essential to expose the risks and advocate for alternative solutions rooted in market principles.

Advocacy and resistance are equally important. We must actively defend the few remaining freedoms we still possess. This means supporting policies that promote financial privacy, opposing state surveillance, and encouraging the development of decentralized financial systems. It also means resisting the temptation to trade liberty for convenience. History shows that once freedom is surrendered, they are rarely regained without a struggle.

Finally, we must promote voluntary market solutions. The private sector has already developed numerous alternatives to state-backed digital currencies, from decentralized cryptocurrencies to innovative payment systems. These solutions offer the best hope for preserving financial freedom in the digital age. By encouraging competition and innovation, we can create a more resilient and inclusive financial system—one that empowers individuals rather than subjugating them.

As the debate over CBDCs intensifies, it is crucial to remain vigilant. While proponents may emphasize the potential benefits, we must not lose sight of the risks. The lessons of history are clear: centralized control over money leads to economic instability, reduced personal freedom, and greater government overreach. By embracing the principles of the Austrian School, we can chart a different course—one that prioritizes freedom, innovation, and individual autonomy.

Tyler Durden
Fri, 03/07/2025 – 21:45

20 States Sue Feds Over Mass Terminations

20 States Sue Feds Over Mass Terminations

A coalition of 20 state attorneys general sued two dozen federal agencies under the Trump administration on March 6, and are seeking the reinstatement of tens of thousands of workers who were laid off in recent weeks.

California Attorney General Rob Bonta attends a press conference in Los Angeles, Calif., on April 15, 2024. John Fredricks/The Epoch Times

The AGs claim that the mass terminations of probationary workers – those who had been in their jobs for less than one year, was illegal because the agencies did not comply with legal requirements for reductions in force (RIFs), according to Maryland AG Anthony Brown and the others. One of the requirements is that 60 days of advance notice is given to workers and states.

“The Office of Personnel Management (“OPM”) has unlawfully directed federal agencies to conduct mass terminations of probationary employees, suddenly and without any advance notice,” reads the complaint, filed in federal court in Maryland. “Defendants have followed through on this directive, firing employees by the hundreds and, in many instances, thousands—all without following the procedures for conducting RIFs and without providing notice to the affected employees or states.”

According to the states, they have suffered harm because they’re struggling to identify which agencies have conducted layoffs and which terminated workers require state support. They also claim that terminated workers have sought unemployment and other social services.

“These layoffs are not only harmful to the federal workforce, but they’re also straining state resources and risk overburdening Maryland,” said Brown in a video statement.

The states are demanding that the court order the 21 agency defendants to stop mass terminations of probationary workers and reinstate any who were fired on or after Jan. 20, when Trump was sworn in.

“The Trump Administration’s sweeping mass firing of probationary federal employees is simply unlawful,” said California AG Rob Bonta in a statement, adding that over 200,000 federal workers are currently on probationary status.

Meanwhile, a federal judge in California recently ordered the immediate reinstatement of some probationary workers who had been fired, including some with the Department of Defense.

Tyler Durden
Fri, 03/07/2025 – 20:30

To Tariff Or Not To Tariff?

To Tariff Or Not To Tariff?

Via SchiffGold.com,

First there was the first Trump trade war, which appeared to end before it began. 

Now, a dizzying Round Two has begun of the Trump tariff saga, and it isn’t clear what concessions will be made. 

But there is a common denominator: things change quickly under a Trump administration, with a rapid-fire news cycle and manic-depressive markets struggling to keep up with the latest announcement.

Whether it’s a statement about tariffs, a new Truth Social post about cuts, or a dramatic televised meeting about finding peace in Ukraine and closing a minerals deal, the market is constantly trying to figure out if the most recent development will make for a Trump pump or a drop.  The rapid, unpredictable shifts leave markets reeling, from Trump Trade to selloff and back again.

Trump’s February announcement of 25% tariffs on Canada and Mexico and a doubled 20% levy on China: the S&P 500 plummeted 1.76%, the Dow shed nearly 1.5%, and the Nasdaq cratered 2.6% in a single session. Bond yields tumbled as investors fled to safety in fear of higher prices, inflation, and disrupted supply chains. Within days, Trump’s suggestion of a potential compromise tied to immigration or fentanyl controls sent futures ticking upward again. However, markets were clearly spooked in February when Trump’s tariff announcements began in earnest.

More recently, a wave of news just came out about retailers telling consumers to expect higher prices on all kinds of goods, as major brands comment that everything from food to furnaces and ACs will cost more as they pass their higher prices onto American families. Tariff target countries Canada, Mexico, and China have announced new retaliatory measures.

Canada is threatening levies on goods ranging from tobacco to firearms. Mexico, hit with the same rate, is eyeing tariffs on $15 billion in US exports like pork and semiconductors, while China has escalated with 15% counter-tariffs on US coal and gas. These tit-for-tat measures echo the 2018-2019 trade war, when China’s retaliation slashed U.S. farm exports, hammering rural economies. Tariffs and counter-tariffs are a tax on prosperity, not a solution to ballooning deficits and other economic woes.

Now, days after the dramatic Zelenskyy meeting, the Ukrainian leader is signaling he is ready to talk about the deal wherein the US would be repaid for war aid in the form of access to Ukraine’s mineral resources like lithium and rare earths that are critical for tech and defense industries. 

Meanwhile, Trump is hinting at a compromise with his latest wave of tariffs against Canada, Mexico, and China, even if the tariffs won’t be completely reversed. Trump’s style is to assert himself as the Dealmaker in Chief, finding sources of economic leverage to wage a form of transactional diplomacy where the outcome of every meeting is tied, ultimately, to some new or modified economic arrangement. It’s a distinctly Trumpian style of governance. 

But markets are so focused on the economic effects of the tariffs that a deeper issue is hardly being addressed: the executive branch of a country shouldn’t be allowed to unilaterally decide on what tariffs should or shouldn’t exist. Tariffs should be enacted through acts of Congress, not executive fiat.

Historically, tariffs were Congress’s domain — like the Smoot-Hawley Tariff Act of 1930, which deepened the Great Depression by slashing global trade 66% in three years. Today, Trump’s use of the International Emergency Economic Powers Act (IEEPA) bypasses legislative oversight. As is often the case, an “emergency” is being used to justify excessive executive reach.

Just like economic sanctions, tariffs are a form of war, and countries that trade with each other aren’t generally fighting with each other. For example, if the US is trading with Russia and trading with Ukraine at the same time, it’s unlikely that the US will also be at war with either of those countries. But just as importantly, it makes it much less likely that those two countries will be at war with each other, either. Escalating tariffs on China could push Beijing and Moscow closer as Trump tries to close his mineral deal in Ukraine and end the war led by Putin and Zelenskyy.

The tariff frenzy, like all state intervention, distorts markets and misallocates resources. True price discovery becomes impossible. Free trade fosters efficiency, peace, and lower prices by encouraging cooperation and aligning production, price, and demand. Tariffs increase prices as consumers bear the brunt, and spark conflict as targeted countries retaliate with their own levies. As Peter Schiff recently said on Palisades Gold Radio about the state micromanaging the economy:

“That’s assuming that you want to entrust the economy to a handful of bureaucrats who think they know more than the market. I would rather have sound money. I don’t want central government planning…they don’t solve problems, they create bigger problems.”

Gold, the ultimate barometer of economic unease, stands to benefit. When Smoot-Hawley triggered inflation and uncertainty, gold demand surged as a hedge. Adjusted for inflation, its price climbed dramatically from 1930 to 1934 after FDR’s revaluation. Today, with gold hovering near $2,900 per ounce, a further rally could be incoming as fiat currencies falter under inflationary pressure and trade war instability.

As uncertainty reigns, gold’s luster grows as a tangible escape from a world where trade wars threaten prosperity, prices, and peace. Whether Trump’s threats lead to fast concessions or a more drawn-out economic conflict, gold will shine as a safe haven from market uncertainty over which is the correct answer.

Tyler Durden
Fri, 03/07/2025 – 20:05

Trump Admin Axes $400 Million In Grants To Columbia University Over Antisemitism Inaction

Trump Admin Axes $400 Million In Grants To Columbia University Over Antisemitism Inaction

Members of the US Joint Task Force to Combat Anti-Semitism, including the Departments of Justice, Health and Human Services, Education, and the US General Services Administration, announced on Friday morning that $400 million in federal grants to Columbia University will be rescinded, citing the university’s “continued inaction” in addressing antisemitism on campus.

“These cancellations represent the first round of action and additional cancellations are expected to follow,” the task force wrote in a statement.

On Monday, the task force notified Columbia University’s Acting President of a comprehensive review of the university’s federal contracts and grants amid ongoing investigations under Title VI of the Civil Rights Act. The review follows reports of “chaos” and “anti-Semitic harassment” on campus since Hamas’ attack on Israel in October 2023.

The task force moved very quickly this week, and by Friday morning, it announced that more than $400 million in federal grant funds from HHS and the Department of Education were rescinded.

“Since October 7, Jewish students have faced relentless violence, intimidation, and anti-Semitic harassment on their campuses – only to be ignored by those who are supposed to protect them,” stated Secretary of Education Linda McMahon. 

McMahon noted, “Universities must comply with all federal antidiscrimination laws if they are going to receive federal funding. For too long, Columbia has abandoned that obligation to Jewish students studying on its campus. Today, we demonstrate to Columbia and other universities that we will not tolerate their appalling inaction any longer.”

Leo Terrell, the head of the DOJ’s antisemitism task force, stated:

“Freezing the funds is one of the tools we are using to respond to this spike in anti-Semitism. This is only the beginning. Cancelling these taxpayer funds is our strongest signal yet that the Federal Government is not going to be party to an educational institution like Columbia that does not protect Jewish students and staff.”

“Anti-Semitism is clearly inconsistent with the fundamental values that should inform liberal education,” Sean Keveney, HHS Acting General Counsel and Task Force member, said, adding, “Columbia University’s complacency is unacceptable.”

Earlier this week, President Trump warned woke colleges and universities that his administration planned to stop federal funding to these higher education facilities that allow “illegal protests” and will deport foreign students who participate. 

As we previously noted, students at Columbia University last year received “Resistance 101” training from far-left activists affiliated with the Samidoun group, which the Israeli government designated as a terrorist organization in 2021.

And remember, these college kids were being used as useful idiots by these Marxist groups to attack America’s critical infrastructure: 

Why the Biden-Harris regime was so hellbent on allowing these college uprisings to occur in the first place remains an open question. Unless those radicals in the administration were pushing for color revolutions…

The next question is how much taxpayer funds were funneled through USAID into shady far-left NGOs that financed the chaos. 

Tyler Durden
Fri, 03/07/2025 – 19:40

Texas Senate Passes Bitcoin Strategic Reserve Bill

Texas Senate Passes Bitcoin Strategic Reserve Bill

Authored by Vince Quill via CoinTelegraph.com,

The Texas Senate passed the Bitcoin strategic reserve bill SB-21 in a 25-5 vote on March 6, following a fierce debate on the state Senate floor.

Texas State Senator Charles Schwertner, who introduced the legislation, argued for the bill and said it would help Texas shore up its balance sheet with a valuable, scarce asset.

“We don’t have stacks of dollar bills and safes like we did in medieval times. What we have is digital currency,” Senator Schwertner told the floor.

Pro-Bitcoin lawmakers also assuaged fears that Bitcoin was a direct competitor to the US dollar as a global reserve currency, adding that BTC was more similar to gold and a hedge against inflation. Schwertner said:

“I would argue, and put forth, that because of central intervention and manipulation of the supply of currency, in this case, the US dollar, the ability to spend money through printing money has caused the dollar to fall in value and fall in worth.”

This monetary inflation has caused people to lose faith in the US dollar, the Texas state senator added.

The bill must still be signed by the governor to be passed into law, and if SB-21 is enacted, Texas will become the first state in the United States to have a digital asset strategic reserve.

Texas state senator Charles Schwertner arguing for the merits of SB-21. Source: Bitcoin Laws

Texas Strategic Bitcoin Reserve bill gets overhaul

The Texas Strategic Bitcoin Reserve legislation was introduced in January as a Bitcoin-only bill that did not mention the acquisition of other digital assets.

However, in February, the bill was refiled with broader language to reflect the potential inclusion of other digital assets.

Texas lawmakers overhauled the bill following US President Donald Trump’s Jan. 23 executive order directing a commission to study the feasibility of a “digital asset stockpile,” which would likely include multiple cryptocurrencies.

The first page of SB-21, which seeks to establish a strategic Bitcoin and digital asset reserve in Texas. Source: Texas Senate

States lead the charge toward Bitcoin reserves

Wyoming Senator Cynthia Lummis, one of the most vocal proponents of a US Bitcoin strategic reserve, recently told an audience at the Bitcoin Investor Week conference in New York that states will likely adopt Bitcoin reserves before the federal government does.

A map showing the progress of strategic reserve bills in the 50 US states. Source: Bitcoin Laws

Lummis, who introduced the Bitcoin Act of 2024 to the US Senate in July 2024, argued that federal adoption would be slower than state adoption due to bureaucratic and procedural hurdles.

Tyler Durden
Fri, 03/07/2025 – 19:15

PA Faces “Looming Power Crisis” After Gov. Shapiro’s Electricity Tax And Plant Closures

PA Faces “Looming Power Crisis” After Gov. Shapiro’s Electricity Tax And Plant Closures

Not unlike the rest of the country which will soon have aggressive new power needs thanks to the data centers powering AI, Pennsylvania is also facing its own power crisis. 

Nearly a year after Gov. Josh Shapiro promised a “new era” in energy—touting job creation, lower utility bills, and billions in clean energy investment—Pennsylvanians see little progress. Instead, he promotes short-term fixes and questionable deals that do nothing to curb rising electricity costs, according to a new op-ed in the Delaware Valley Journal by Senator Gene Yaw.

Shapiro overlooks the real issue: his RGGI electricity tax and the premature shutdown of key power plants without a clear replacement strategy. When energy supply lags behind demand, prices inevitably rise, Yaw notes.

In the next decade, the grid faces a projected 80,000-megawatt shortfall. Pennsylvania, supplying a quarter of the region’s power, would need at least 20 new plants to keep pace—yet none are planned or in development.

Since RGGI’s proposal, Pennsylvania has seen no new baseload energy investment. The governor insists action is needed, yet his carbon tax push and failed policies only worsen the crisis. Real solutions require attracting energy investment, modernizing the grid, and streamlining regulations.

The letter in the Delaware Valley Journal says that he Senate Energy Committee has prioritized grid reliability, collaborating with other states and advancing measures to secure power supply—efforts blocked by Democrats. I’m introducing the Grid Stabilization and Security Act and reviving a Baseload Energy Development Fund to address the shortfall.

“We’ve advanced several measures aimed at addressing grid reliability, including legislation to establish an Independent Energy Office in Pennsylvania, legislation to protect the power grid from purposeful damage and legislation to place decisions regarding energy restrictions within the purview of the legislature,” the Senator writes.

“Unfortunately, these measures were only supported by Republicans on the committee. Recently, I announced plans to introduce a bill to address electric generation shortfall by establishing the Grid Stabilization and Security Act. Plans to reintroduce a bill from last session establishing a Pennsylvania Baseload Energy Development Fund are underway.”

Yaw continues: “Saying we must diversify our energy sources and create clean, reliable and affordable energy is doing nothing but rearranging the deck chairs on the Titanic. Wind, solar, batteries and other unproven, unreliable sources do not answer this one question: where does my electricity come from at 3 a.m. on a cold, calm winter night?”

“We are racing towards the iceberg and have no plan to slow down, let alone stop, before we get there. We must encourage and implement construction of thermal baseload electric generation capacity now. I hope the governor joins us in this effort.”

Tyler Durden
Fri, 03/07/2025 – 18:50

Trump v. Atlanticism: Understanding Russiagate

Trump v. Atlanticism: Understanding Russiagate

Authored by Thomas Farnan via OneLeggedParrot.com,

Last month, President Trump bypassed Europe, NATO, and the entire postwar order and opened a conversation directly with Russia. In doing so, he defied Washington’s established foreign policy paradigm that had been in place since the 1940s.

“They” always feared he would go there, and “they” tried to prevent it by a never-ending string of investigations, prosecutions, and impeachments.

The “they” Trump defied is called on X “the Deep State” which is a colorful nickname. It has a real name, too: “Atlanticism,” after the Atlantic Charter entered by Roosevelt and Churchill. It is the “A” in “North Atlantic Treaty Organization.”

In high-toned treatises, Atlanticism described a form of empire built upon American hegemony. The moral justification was ostensibly based on American benevolence, a projection of virtue that relied on propaganda. It’s closest historical analog, though, was colonialism.

The lands occupied by Atlanticist ideology traded in American currency. NATO existed to deter the Soviet threat. But it was also an occupying army. There were not colonial governments. There was, instead, strict control of information, puppet governments, and election interference.

When Trump questioned the continuing need for NATO in 2016, institutions with a financial stake in Atlanticism performed a Cold War soft power operation against him. Western intelligence agencies mobilized to connect Trump to Russia, leading to a series of political dirty tricks.

Russiagate was not merely bureaucratic haplessness masquerading as foreign intrigue. It was, instead, the sclerotic postwar spy apparatus targeting an American presidential candidate and then president.

In 2024, Trump won the presidency again, in part out of the electorate’s disgust over the dirty tricks. Upon returning to the Oval Office, he deliberately refocused foreign policy on the American hemisphere.

He Truth Socialed aggressively about Canada, Mexico, Greenland, and Panama, sending his new Secretary of State on his first diplomatic mission to negotiate better rates on passage through the Panama Canal after threatening to take it back by force.

President Trump was steering the ship of state back to the foreign policy of The Monroe Doctrine, in which America’s focus was on problems in its own hemisphere – and not on “democracy” movements abroad.

The new Trump administration made clear that Ukraine would not be invited into NATO, which would have obligated the United States to send troops half a world away to fight Russia. There is credible reporting that President Trump has also started to deny the NATO proxy warriors in Ukraine encryption codes needed to attack Russia with drones and missiles.

With no American cavalry coming to save the day and President Trump cultivating an independent diplomatic relationship with Russia, the most rational path in Ukraine is to negotiate a ceasefire.

Whatever its intentions – and they were arguably altruistic – Atlanticism became a Frankenstein monster that took its initial design to its rational conclusion that threatened existence.

We scratched the surface of what that means in USAID, Soft Power, And How Solzhenitsyn Predicted This Crisis. The following is based on a compilation of essays written between 2016-2020 connecting Russiagate to Atlanticism. It includes links to original sources and some updates.

To understand the malevolence of Atlanticism, it is essential to grasp the wild details of the putsch it attempted in President Trump’s first term. Following is the craziest story ever told in the history of American politics. Now that President Trump has closed the circle by embarking on a new foreign policy, it is relevant to revisit the story from beginning to end with the benefit of additional context.

***

In the 1950s, the Cold War was waged on the premise of the domino theory. Russia was thought to be intent on spreading communist ideology by armed insurrection throughout the world. The Red Menace had to be stopped with blood and treasure in places like Vietnam and El Salvador.

The logic of the domino theory committed America to an unprecedented peacetime military build-up. In addition, the West created an intricate spy bureaucracy to discern Russia’s evil designs. The Five Eyes agreement was a postwar alliance among the United States, the UK, Australia, Canada, and New Zealand to share intelligence. Under its terms, the Brits could spy on Americans suspected of helping Russia, and report their findings back to the CIA.

The CIA could not do anything with the information because it was not permitted, generally, to conduct investigations on American soil. J. Edgar Hoover’s FBI closed the legal loophole by expanding its mission to gather intelligence against Americans who might be Russian agents, under the auspices of “law enforcement.” Now, the Brits could spy on Americans, share the information with the CIA, and the FBI could be brought in to finish the job.

There were spectacular abuses. Hoover kept secret files on Martin Luther King, Jr., Hollywood stars, and politicians who were rivals to his power. The FBI’s domestic intelligence gathering function caused understandable discomfort on the political left.

In response, liberal Idaho (before those words were an oxymoron) Senator Frank Church set up a commission to investigate domestic surveillance abuses. Technology, by then, permitted federal agencies to capture huge amounts of wire communications without disclosing the eavesdropping to Americans who were being surveilled.

Senator Church stated his concerns on an episode of Meet the Press:

If this government ever became a tyrant, if a dictator ever took charge in this country, the technological capacity that the intelligence community has given the government could enable it to impose total tyranny [against those who] combine together in resistance to the government.

The result of Senator Church’s work was the Foreign Intelligence Surveillance Act of 1978 (FISA). Under the new law, the FBI could not use its technological capacity to secretly gather intelligence against any American without first going to court with credible evidence that the citizen was a spy.

In the early 1990s, the Soviet Union disbanded, leaving an entire apparatus in the West built to fend off Soviet expansion. None of it was dismantled. Instead, intrusive devices meant to prevent World War III wound up in the hands of European bureaucrats and wannabee sophisticates of the American spy ranks. Together, they set out to find Russian intrigue of the sort that let them keep using their cool gadgets.

Prominent among them was a British spy by the name of Christopher Steele. He built a distinguished life for himself by blaming Russia for bad things. It was Steele, as a member of MI6, who determined that Alexander Litvinenko’s poisoning was a Russian state hit. Nobody has seen the evidence that proves Russia poisoned Litvinenko because that would reveal sources and methods. We have to rely on Steele. But, not to worry, Steele would never just make stuff up, right?

By such shadowy machinations, “Putin is a thug” replaced the domino theory as the raison d’etre of the lucrative Western spy apparatus. How Putin poisoning political enemies justified complex intelligence gathering and expensive military bases originally designed to prevent Soviet incursions into Western Europe is not something you were supposed to ask. A priori, “Putin is a thug” meant he wants to annex France.

Think tanks like the Atlantic Council and the Brookings Institution gave the “Putin-is-a-thug” mantra an official, silk-stocking, “former generals, major corporations, Senators, friendly foreign governments, and top academics agree” stature. It worked mostly because Democrats and Republicans were looking for a reason to hate Putin anyway, but for different reasons.

Putin’s anti-immigrant, anti-liberal, Christianity-sourced populism was anathema to Democrats. He roiled some of progressivism’s most strictly enforced pieties, speaking freely of his own baptism, his beliefs, and the positive role Christianity played in Russian history. He put a girl rock band, Pussy Riot, in prison for desecrating an altar, a crime that had not been prosecuted since the pope crowned heads of state.

In 2013, the Kremlin imposed a ban on the advocacy of the homosexual lifestyle in the presence of children, strictly limited advertisements for abortions, and prohibited elective abortions later than 12 weeks after conception. The Sochi Olympics closing ceremonies in 2014 featured a tribute to Russian writers, including communism’s most eloquent critic, Aleksandr Solzhenitsyn, whose books are required reading in Russian schools.

President Obama personally boycotted the Sochi Olympics and sent in his place a delegation of gay athletes, to protest Russia’s laws against gay advocacy. It was a diplomatic breach of the sort that was carefully avoided during the Beijing Olympics, even though China has a far worse record on human rights.

On the social issues alone, Putin would seem to be a natural ally for the American right, but it does not work that way. Instead, when discussing Putin, Republicans are quick to evoke images of Stalin and gulags. That is partly because the Cold War is ingrained in the Republican identity. They are the paunchy vets who always don their bad-fitting uniforms for the parade.

Mostly, though, it is because the funding pipeline that makes Washington, D.C. the wealthiest region in America feeds mostly on military spending. Politico reported in 2015, “the United States still maintains nearly 800 military bases in more than 70 countries and territories abroad…. Britain, France and Russia, by contrast, have about 30 foreign bases combined.” Republicans have been feeding at that trough for 75 years.

Smack dab in the middle of the foreign entanglements debated by this bipartisan mix of Putin-hatred is the country of Ukraine, which sits geographically between Europe and Russia.

The Cold War view was that Ukraine was the geographical key to the Soviet empire. Since the 1990s, Ukraine has bounced back and forth between alignment with Russia and the West. Like a child in a bitter divorce, it has become a proxy in the battle between two mismatched parents: the parochial, nationalistic, religious preferences of Putin’s Russia; and the globalism of the West.

In 2010, Russia-sympathetic candidate Viktor Yanukovych was elected as president of Ukraine, in part due to the services of an American political consultant, Paul Manafort. In 2014, Yanukovych would make the mistake of not signing an association agreement with the European Union. John McCain flew to Kiev to rally support for the EU.

McCain reported back to the Atlantic Council about his trip. There followed a successful coup d’état, that replaced the Russia-sympathetic government with a Western puppet.

President Obama later told CNN’s Fareed Zakaria that he had “brokered a deal to transition power in Ukraine.” The word “brokered” suggests that the Obama administration successfully replaced a government half a world away at the behest of Washington’s smart people. There was also a leaked phone call in which Assistant Secretary of State Victoria Nuland participated in choosing the new government.

In 2015, the fledgling Donald Trump campaign gained unlikely traction among the Republican rank-and-file by questioning Washington’s Putin hatred. Several times in that summer – after his June announcement that he would run for president – Trump cited his experience with the Miss Universe Pageant in Russia as providing foreign policy bona fides and, in the same interviews, he spoke highly of Vladimir Putin.

Such bombast enraged the huffy foreign policy establishment, but regular people got a kick out of it, partly because of the rage it caused among the self-important. Candidate Trump did not know it, but he was thumbing his nose at the West’s most powerful syndicate – Atlanticism – and there would be hell to pay.

In September 2015, Putin made a speech at the UN in New York harshly critical of NATO expansion and Western meddling on Russia’s borders, citing “the bloc thinking of the times of the Cold War” that was having devastating effects in places like Ukraine. For Trump, it must have seemed a gift when a world leader like Putin provided such a harsh critique of President Obama’s foreign policy just a short cab ride away from his campaign headquarters in Trump Tower.

Trump gave Putin’s speech a stellar review. He would appear on The O’Reilly Factor on FOX the next day and say, “I will tell you that I think in terms of leadership, [Putin] is getting an ‘A,’ and our president is not doing so well. They did not look good together.”

Trump spent the next few months distinguishing himself from all other Republican candidates by lavishing praise on Putin, even daring to question the Russian president’s role in the Litvinenko poisoning: “In all fairness to Putin, you’re saying he killed people. I haven’t seen that. I don’t know that he has. Have you been able to prove that?”

Christopher Steele could not have been pleased. Republicans, too, did not appreciate the Putin heresy. Around the time of Putin’s UN speech, the strategic intelligence firm Fusion GPS put out a feeler to Republican interests, offering to find dirt on Trump. The Washington Free Beacon, a neoconservative website funded by the hedge-fund billionaire Paul Singer, hired Fusion GPS. At the time, Singer was backing Marco Rubio for the Republican nomination.

Alexandra Chalupa, a Ukrainian-American operative, also began doing opposition research for the DNC about Trump and Russia in late 2015. The Ukrainian embassy representing the new Ukrainian government whose power President Obama had “brokered” worked closely with Chalupa. Suddenly, lots of powerful Washingtonians were trying to connect Trump to Russia.

On January 16, 2016, The Atlantic Council issued a dispatch under the banner headline: “US Intelligence Agencies to Investigate Russia’s Infiltration of European Political Parties.” The lede was concise: “American intelligence agencies are to conduct a major investigation into how the Kremlin is infiltrating political parties in Europe, it can be revealed.”

There followed a series of pull quotes from an article that appeared in the The Telegraph, including one stating that, “James Clapper, the US Director of National Intelligence” was investigating whether right wing political movements in Europe were sourced in “Russian meddling.”

The dispatch spoke of “A dossier” that revealed “Russian influence operations” in Europe. This was the first time trippy words like “Russian meddling” and “dossier” would appear together in official sources.

Senator Frank Church would have been rolling over in his grave. A progressive Democratic president was spying on European political parties to uncover connections to Russia. This meant, almost necessarily under the Five Eyes Agreement, that foreign agents were returning the favor and spying on the Trump campaign and sharing their “intelligence” with John Brennan at the CIA, who was shucking it off to James Comey at the FBI.

One of the international men of mystery spying on European political parties was none other than the ubiquitous Christopher Steele. A March 5, 2018 piece in The New Yorker about Steele described the connection:

Even before Steele became involved in the U.S. Presidential campaign, he was convinced that the Kremlin was interfering in Western elections. In April of 2016, not long before he took on the Fusion assignment, he finished a secret investigation, which he called Project Charlemagne, for a private client. It involved a survey of Russian interference in the politics of four members of the European Union—France, Italy, the United Kingdom, and Germany—along with Turkey, a candidate for membership. The report chronicles persistent, aggressive political interference by the Kremlin: social-media warfare aimed at inflaming fear and prejudice, and “opaque financial support” given to favored politicians in the form of bank loans, gifts, and other kinds of support. The report…. suggests that Russian aid was likely given to lesser-known right-wing nationalists in the United Kingdom and elsewhere. The Kremlin’s long-term aim, the report concludes, was to boost extremist groups and politicians at the expense of Europe’s liberal democracies. The more immediate goal was to “destroy” the E.U., in order to end the punishing economic sanctions that the E.U. and the U.S. had imposed on Russia after its 2014 political and military interference in Ukraine.

At roughly the same time Steele worked on Project Charlemagne, he hired Fusion GPS to do research on Paul Manafort. Glenn Simpson detailed this in his book: “Weeks before Trump tapped Manafort to run his campaign, Christopher Steele had hired Fusion for help investigating Manafort.” Manafort was then working as an advisor to Trump’s campaign, and he had not yet ascended to campaign manager. His one-time business partner, Rick Davis, had managed John McCain’s campaign, and Manafort was tapped as a level-headed insider who could possibly bring some ballast to Trump.

The perfect storm that became Russiagate looked like this in March 2016:

Steele was investigating Putin’s influence in European politics. Manafort had been helpful in electing a Russian-sympathetic candidate in Ukraine, and he started to work for Trump. Steele hired Fusion GPS to investigate Manafort. Then Fusion GPS hired Steele to help them. Cozy, huh? Oblivious to it all, Trump continued to poke the bear, wondering out loud about NATO’s continued relevance and questioning America’s foreign policy in Ukraine. The Atlantic Council was on high alert, defending NATO against Trump’s heresy.

There were whispers of “Putin’s candidate”, but they were only whispers. It probably would have remained innuendo parroted occasionally on the campaign trail. But then something extraordinary happened.

On March 19, 2016, Hillary Clinton’s campaign chairman, John Podesta, surrendered his emails to an unknown entity in a “spear phishing” scam. This has been called a “hack,” but it was not.  Instead, it was the sort of flim-flam hustle that happens to gullible dupes on the internet. The content of the emails was beyond embarrassing. They showed election fraud and coordination with the media against the candidacy of Bernie Sanders. The DNC and the Clinton campaign needed a cover story.

Blaming Russia would be a convenient way to deal with the Podesta emails. There was already an existing Russia operation around Trump that could easily be retrofitted for this purpose. The problem was that it was nearly impossible to identify the perpetrator of a phishing scheme using computer forensic tools. The only way to associate Putin with the emails was circumstantially.

The DNC retained a company called “CrowdStrike” to help. CrowdStrike’s chief technology officer and co-founder, Dmitri Alperovitch, was an anti-Putin Russian expat and a senior fellow at the Atlantic Council. With the Atlantic Council in 2016, all roads led to Ukraine.

The Atlantic Council’s list of significant contributors included Ukrainian billionaire Victor Pinchuk. The Ukrainian energy company that was paying millions to Hunter Biden as a member of its board of directors, Burisma, also appears prominently on the Atlantic Council’s donor list. Arseniy Yatsenyuk, the Western puppet installed in Ukraine, visited the Atlantic Council’s Washington offices to make a speech weeks after the coup.

Pinchuk was a big donor (between $10 million and $20 million) to the Clinton Foundation. Back in ’15, the Wall Street Journal published an investigative piece, “Clinton Charity Tapped Foreign Friends.” The piece was about how Ukraine was attempting to influence Clinton by making huge donations through Pinchuk. Similarly, in 2014, the New York Times saw fit to print a story, “Foreign Powers Buy Influence at Think Tanks.” The article identified both the Atlantic Council and the Brookings Institution as think tanks being paid by foreign governments for lobbying efforts, noting that the arrangements, “opened a whole new window into an aspect of the influence-buying in Washington that has not previously been exposed.”

On June 12, 2016, WikiLeaks founder Julian Assange announced: “We have upcoming leaks in relation to Hillary Clinton . . . We have emails pending publication.” Two days later, CrowdStrike fed the Washington Post a story, headlined, “Russian government hackers penetrated DNC, stole opposition research on Trump.” The improbable tale was that the Russians had hacked the DNC computer servers and got away with some opposition research on Trump. The article quoted Alperovitch.

The next day, a new blog – Guccifer 2.0 – appeared on the internet and made an improbable confession:

Worldwide known cyber security company CrowdStrike announced that the Democratic National Committee (DNC) servers had been hacked by “sophisticated” hacker groups.

I’m very pleased the company appreciated my skills so highly))) But in fact, it was easy, very easy.

Guccifer may have been the first one who penetrated Hillary Clinton’s and other Democrats’ mail servers. But he certainly wasn’t the last. No wonder any other hacker could easily get access to the DNC’s servers.

Shame on CrowdStrike: Do you think I’ve been in the DNC’s networks for almost a year and saved only 2 documents? Do you really believe it?

Here are just a few docs from many thousands I extracted when hacking into DNC’s network.

Guccifer 2.0 posted hundreds of pages of Trump opposition research allegedly hacked from the DNC and emailed copies to Gawker and The Smoking Gun. In raw form, the opposition research were documents obtained in the Podesta emails, with a notable difference: It was widely reported the documents now contained “Russian fingerprints.”

The document had been cut and pasted into a separate Russian Word template that yielded an abundance of Russian “error “messages. The document’s metadata included the name of the Russian secret police founder, Felix Dzerzhinsky, written in the Russian language.

The three-parenthesis formulation from the original post “)))” is the Russian version of a smiley face used commonly on social media. In addition, the blog’s author deliberately used a Russian VPN service visible in its emails even though there would have been many options to hide national affiliation.

Under the circumstances, the FBI should have analyzed the DNC computers to confirm the Guccifer hack. Incredibly, though, the inspection was done by CrowdStrike, the same Atlantic Council-connected private contractor paid by the DNC that had already concluded in The Washington Post that there had been a hack and Putin was behind it.

CrowdStrike would declare the “hack” to be the work of sophisticated Russian spies. Alperovitch described it as, “skilled operational tradecraft.” There is nothing skilled, though, in ham-handedly disclosing a Russian identity on the internet when trying to hide it. The more reasonable inference is that this was a set-up. It certainly looks like Guccifer 2.0 suddenly appeared as a cover story for the Podesta email leak in coordination with the Washington Post’s article that appeared the previous day.

FBI Director James Comey confirmed in testimony to the Senate Intelligence Committee in January 2017 that the FBI’s failure to inspect the computers was unusual. “We’d always prefer to have access hands-on ourselves if that’s possible,” he said. But the DNC rebuffed the FBI’s request to inspect the hardware. Comey added that the DNC’s hand-picked investigator, CrowdStrike, is “a highly respected private company.”

What Comey did not reveal was that CrowdStrike never corroborated a hack by forensic analysis. In testimony released in 2019, it was revealed that CrowdStrike admitted to Congressional investigators as early as 2017 that it had no direct evidence of Russian hacking.

CrowdStrike’s president Shawn Henry testified, “There’s not evidence that [documents and emails] were actually exfiltrated [from the DNC servers]. There’s circumstantial evidence but no evidence that they were actually exfiltrated.” The circumstantial evidence was Guccifer 2.0; i.e., the uncorroborated cover story.

This was a crucial revelation because the thousand ships of Russiagate launched upon the positive assertion that CrowdStrike had definitely found a Russian hack. The testimony that there was no direct evidence of a hack was kept from the American public for nearly three years.

The reasonable inference is that the DNC was trying to frame Russia, and the FBI and intelligence agencies were going along with the scheme because of political pressure. Lending weight to the frame-up theory: at the same time CrowdStrike was raising a false Russian flag over the hack, the DNC also hired Fusion GPS to create Russian dirt on Trump. The law firm, Perkins Coie, was used as a cut out to hire both CrowdStrike and Fusion GPS, so that the DNC’s involvement would not be immediately visible.

There were massive conflicts of interest.

To give the hit job a veneer of credibility, Fusion GPS recruited its client, Steele, for whom it was investigating Paul Manafort. But Steele at the time had already investigated Putin’s supposed involvement in European politics, in Project Charlemagne. Finding that Russia colluded with Trump would at least be an act of confirmation bias.

Steele couldn’t tap anyone actually connected to Putin to provide Trump kompromat. Instead, he dipped into Washington’s ready pool of earnest role players and got the Putin dirt from low level policy researcher with connections to the Brookings Institution, Igor Danchenko.

Danchenko drafted what has famously come to be called “the Steele dossier,” a facially absurd document that claimed Putin possessed videotape of Trump paying two prostitutes to pee on a bed the Obamas had used while in Russia. The theory was that Putin was using that video (kompromat) to control Trump’s candidacy, injecting it with the sort of anti-immigrant, anti-liberal, Christianity-sourced populism that was working so well for him in Russia.

Therein lies the chewy tootsie roll center of Russiagate: Atlanticists have a condescending view of the hoi polloi who vote against their globalist projects, regarding the huddled masses as easily manipulated, Pygmalion-like, by smarter people. They project that Putin is playing Professor Henry Higgins to the flower girls who reject their ideas, because that is how they see the world. This simple prejudice makes Russian collusion a first principle with no need for supporting evidence.

In his master’s thesis at the University of Louisville, Danchenko had thanked Fiona Hill, who would help him graduate to the position of senior researcher at Brookings, and co-author a paper with her about how Russian ambitions in Europe and Asia are bolstered by its energy exports. Hill is the British-American academic and self-confessed Russia-hawk who was Adam Schiff’s key impeachment witness against President Trump.

Danchenko would disclaim the substance of the dossier to the FBI in 2017 – a fact the FBI did not disclose until 2020. Disclaiming the substance of the dossier in his FBI interview was a stunning admission by the so-called primary sub-source that somehow did not stop Trump’s own Justice Department from using the dossier to ratchet up the inquiry and appoint a special council.

While CrowdStrike and Fusion GPS were creating false Russian flags over the Trump campaign, the CIA managed to get the FBI to open its own domestic spy investigation. John Brennan was asked in his February 4, 2018 appearance on Meet the Press about the role of the Five Eyes Agreement in investigating the Trump campaign, and he made a blunt admission:

Now I’m not going to get into details about how it was acquired. But the FBI has a very close relationship with its British counterparts. And so the FBI had visibility into a number of things that were going on involving some individuals who may have had some affiliation with the Trump campaign. And so the intelligence that we collected was pulsed against that. And I thought it would have been derelict if the FBI did not pull the threads, investigative threads, on American persons who might have been involved with Russia and working on their behalf either wittingly or unwittingly.

There is no way to read his answer except to infer that Brennan prodded the FBI investigation into Trump with the help of “British counterparts”, and he’s proud of it.

At the time the CIA was pushing the FBI to investigate, Trump had made an unlikely and inexplicable run at the Republican nomination on a populist agenda. The Brits were dealing with their own unlikely and inexplicable political event. Tens of millions of working-class voters had done the unthinkable: reject rule by the EU.

It was the time of the Brexit vote and a wave of populism was sweeping the UK. On July 13, 2016, British academic Dr. Andrew Foxall penned an op-ed in the New York Times, “Why Putin Loves Brexit.” Foxall blamed Russia for the previous month’s Brexit vote, adding in a little-noted aside that spies were looking into it:

The United States is so concerned over Moscow’s determination to exploit European disunity that in January, James R. Clapper Jr., the director of national intelligence, began a review of Russia’s clandestine funding of European parties.

Whatever their motivation, British intelligence agencies were imagining Putin under mattresses, and they were in full spy-mode about it. Minor members of the Trump campaign, including Carter Page and George Papadopoulos, were invited to London to talk to Cambridge professor Stefan Halper, who burrowed in on Trump and Russia. Unless U.S. intelligence agencies were freestyling in Great Britain, MI6 was spying on the Trump campaign.

Halper is inferentially a British spy or at least a double agent. The alternative is that he was an American spy conducting rogue operations from England. At the time, Halper was an FBI confidential human source being paid by American tax dollars.

After Papadopoulos hooked on as a minor underling in the Trump campaign, he ran into a person by the name of Josef Mifsud while traveling in Europe. Mifsud either did or didn’t bring up something about Hillary Clinton emails, depending on who you believe: Papadopoulos or Andrew Downer, an Australian diplomat connected to the Clinton Foundation who gratuitously inserted himself into these events right as the FBI was looking for a pretext to start and official investigation. Downer himself would later retreat from the claim that Papadopoulos mentioned emails.

James Comey has called Mifsud a Russian agent. But Mifsud has documented connections to British spy agencies. He traveled to the United States in early February 2017 as a guest of the State Department, an accommodation not ordinarily made to Russian operatives who just stole an election. Joseph Mifsud walked, quacked, and acted like a Western asset. The alternative is that he somehow showed up in the middle of a honeypot operation against George Papadopoulos as a real Russian spy to play the part of a Russian spy.

The FBI would officially launch its investigation into the Trump campaign, Crossfire Hurricane, on July 31, 2016. A few days later, the agent who opened the investigation – Peter Strzok – would text his lover, “We’ll stop” Trump. By then, the DNC, its paid contractors CrowdStrike and Fusion GPS, the CIA, foreign intelligence services, and the FBI were engaging in a joint operation to stop Trump that was being run out of Washington’s silk-stocking think tanks.

Together, this powerful junta successfully dealt with the release of the Podesta emails. The contents were beyond embarrassing. The emails show Clinton and the Democratic Party fixing the primaries against Bernie Sanders. The chair of the DNC, Debbie Wasserman Schultz, was forced to resign on the eve of the democratic convention in late July for her role in the dirty tricks.

The Podesta emails were the sort of political dirt Woodward and Bernstein got from Deep Throat in that parking garage. You would think the media would have celebrated the emails leak for speaking truth to power. This time, though, The Washington Post intervened firmly on the side of the cover-up. By August, the media was running with the Clinton campaign’s Russia smear operation: The damaging emails showed Putin was behind Trump was now the story.

It made no sense, but Trump was placed on the defensive for email leaks that showed his opponent fixing the primaries. Paul Manafort, who was by then Trump’s campaign manager, resigned because a fake ledger suddenly appeared out of Ukraine connecting him to Russia. In September, the CIA briefed President Obama that the Russians believed the Clinton campaign was conducting a false flag operation to connect Trump to Russia. This briefing was not declassified until 2020, and the necessary inference is that President Obama had full knowledge of the dirty tricks.

Trump protested by stating the obvious: the federal government has “no idea” who was behind the hacks. The FBI and CIA called him a liar, issuing a “Joint Statement” that cited Guccifer 2.0, suggesting 17 intelligence agencies agree that it was the Russians. Hillary Clinton took advantage of this “intelligence assessment” in the October debate to portray Trump as Putin’s stooge” She said:

“We have 17, 17 intelligence agencies, civilian and military who have all concluded that these espionage attacks, these cyber-attacks, come from the highest levels of the Kremlin.  And they are designed to influence our election. I find that deeply disturbing.”

The media’s fact checkers excoriated Trump for lying. It has since been learned that the “17 intelligence agencies” claptrap was always false. Somehow, Trump won anyway. Then, immediately after the election, elements of the scheme began to unravel.

On Dec. 22, 2016, CrowdStrike caused an international stir when it claimed to have uncovered evidence that Russians hacked into a Ukrainian artillery computer app to help pro-Russian separatists. Voice of America later determined the claim was false, and CrowdStrike retracted its finding.

Ukraine’s Ministry of Defense was forced to eat crow and admit that the hacking never happened. It was suddenly obvious to anyone paying attention that if you wanted a computer testing firm to fabricate a Russian hack for political reasons in 2016, CrowdStrike was who you went out and hired.

In a piece first published on January 11, 2017, headlined “Ukrainian Efforts to Sabotage Trump Backfire,” Politico reported that Ukraine tried to help Hillary Clinton in the 2016 presidential election: “The Ukrainian efforts had an impact in the race, helping to force Manafort’s resignation and advancing the narrative that Trump’s campaign was deeply connected to Ukraine’s foe to the east, Russia.” Ukraine later apologized and admitted its interference.

The conspirators probably should have exited the scheme there and played dumb but instead they doubled down. The Washington insiders who had together orchestrated the Russia hoax switched into a cover-up, hide-the-evidence, continue-to-harm-Trump operation.

Trump had promised that he would appoint General Michael Flynn as his National Security Advisor. Flynn publicly favored rapprochement with Russia and was somewhat of an Atlanticist iconoclast. Once behind the desk with access to the government’s top-secret files, Flynn possibly would have figured out that the FBI and CIA combined with the DNC and members of the Obama administration to play political dirty tricks against Trump. The plotters’ first order of business was to sideline Flynn.

In their meeting two days after the election, President Obama forcefully told Trump not to give Flynn a role in his administration. Trump was taken aback but he did not listen and made General Flynn his National Security Advisor. The Obama Administration needed a Plan B: Invent an international incident to entrap Flynn.

On December 27, 2016, the Obama administration expelled 35 Russian diplomats—including gardeners and chauffeurs—for interfering in the election. Flynn had a conversation with the Russian ambassador the next day and the plotters listened in via wiretap. The Obama administration wanted to see if Flynn signaled to the Russians that the Trump administration would have a different approach to foreign policy.

Under American law, it is perfectly okay for an incoming administration to communicate its foreign policy preferences during a transition even if they differ from the lame duck administration. That is one of the purposes of a presidential transition. Flynn could have said, “President-elect Trump believes this Russian interference thing is a fantasy, and these sanctions will be lifted on his first day in office.”

Given the soupy mix of conspiracy theories at the time, it is unlikely the Trump administration would have survived such an act of diplomatic common sense. The conspirators were hoping to get Flynn on tape making that sort of accommodation to the Russians. The promise to lift the sanctions would then be cited to suggest a quid pro quo that proved the nonexistent collusion. But Flynn was noncommittal in his wiretapped conversation. Drat!

The plotters did have a transcript of what he said. This is where the outrageous behavior of the FBI is fully displayed. James Comey invited Flynn to be interviewed by the FBI, supposedly about Russian collusion to steal the election. Flynn was eager to tell the FBI that Russian collusion was ridiculous. What Flynn did not know was that the purpose of the interview had nothing to do with the election. It was a trick.

Comey did not need to ask Flynn what was said in the conversation with the ambassador—he had a transcript. The only reason to ask Flynn about it was to cross him up. It would be a test pitting Flynn’s memory against the transcript. The inescapable conclusion is that the FBI set a trap for the incoming national security advisor to disrupt the foreign policy of the newly elected president.

Flynn was not completely clear about what he had discussed with the ambassador, but most of it was none of the FBI’s business. In his defense, he did not believe he was sitting there to tell the FBI how the Trump administration was dealing with Russia going forward. The conversation was supposed to be about the election. He certainly did not think the FBI would unmask his comments and compare them to his answers. That would be illegal.

Flynn was forced to resign. The conspirators had successfully eliminated the one person with the experience and gumption to discover their dirty tricks and go after them for it. Once Flynn had been successfully sidelined, insiders combined with the media to invent a phony Russia narrative that called into question Trump’s legitimacy.

Republicans played leading roles ginning up Russia hysteria during the transition. Trump appointed Exxon chairman Rex Tillerson as his secretary of state. He had received the Order of Friendship from Vladimir Putin in 2013, for his work on the Arctic Exploration Pact with Russia’s state-owned oil company, Rosneft. Tillerson drew the ire of Marco Rubio, a prominent Republican on the Senate Intelligence Committee, who tweeted, “Being a ‘friend of Vladimir’ is not an attribute I am hoping for from a #SecretaryOfState – MR.”

Sen. John McCain expressed opposition to Tillerson’s appointment. McCain went on TV to declare that “Vladimir Putin is a thug, and a murderer, and a killer….and a KGB agent.” Trump’s attorney general, Sen. Jeff Sessions, ridiculously recused himself from the Russia probe because he had recently seen the Russian ambassador in a reviewing line at the Senate, which somehow placed him under investigation for collusion.

Both sides in Washington – Republicans and Democrats – were now playing the same Russia game. Everyone knew their role. Buzzfeed released the Steele Dossier to much fanfare on January 10, 2017, and it caused a feeding frenzy in the media. A new wave of reporting ensued, using smears and innuendo to question whether Trump was controlled by Russia. In 2021, Axios offered a muffled after-the-fact apology calling the reporting, “one of the most egregious journalistic errors in modern history….”

FBI Director James Comey attended a meeting before Trump’s inauguration, during which President Obama posited that “we cannot share information fully as it relates to Russia” with the new president. Comey had an obligation to say, “Mr. President, with due respect, the FBI gathers intelligence for the president, and once you’re out the door and the new guy is in here, I have an obligation to share everything with him, even embarrassing facts that show we were using the FBI to improperly surveil his campaign.” Instead, Comey – who was up to his neck in the political operation at this point – saluted and said, “Yes sir.”   

Moments after the inauguration, while she still had access to her computer – in a clumsy attempt to paper the record – Susan Rice sent a CYA email stating President Obama had said during the earlier meeting that they should do everything by-the-book. Ambassador Rice wrote:

President Obama began the conversation by stressing his continued commitment to ensuring that every aspect of this issue is handled by the Intelligence and law enforcement communities ‘by the book’. The President stressed that he is not asking about, initiating or instructing anything from a law enforcement perspective.  He reiterated that our law enforcement team needs to proceed as it normally would by the book.

Early in his administration, President Trump met with Comey on several occasions and asked him to make public what he had told the president privately: that the president was not a target of the Russia investigation. Comey refused, and Trump fired him.

Comey then leaked notes of his meetings with Trump, he claimed under oath, to get a special counsel appointed. He did not say what he knew behind the scenes about the inner workings of Washington that convinced him his notes would yield that result.

Because of the Sessions recusal, the special counsel decision devolved to the second in command at the Justice Department, Rod Rosenstein, a Washington insider who had been recommended to Trump by Republican leaders. Without any evidence that showed a possible crime, Rosenstein appointed Robert Mueller to investigate, “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump.”

Mueller had been Obama’s director of the FBI until 2013. He had previously explored Paul Manafort’s advocacy on behalf of Yanukovych in Ukraine. Manafort may or may not have violated tax and banking laws in 2010. Given the twisted and arcane nature of those laws, who knows? What is known is that Manafort first was investigated for breaking those laws way back then. A discretionary decision was made not to prosecute.

Nevertheless, in 2017, the Office of Special Counsel in the Russia probe indicted Manafort for hiding income that he received in 2010 from Ukraine. Mueller essentially dusted off some old files from when he ran the FBI and indicted Trump’s one-time campaign manager on a stale tax charge.

Mueller also indicted underlings in the Trump campaign for process crimes, inanities like – in the case of George Papadopoulos – not correctly stating the date when he officially joined the campaign, which the media then portrayed as “an indictment for lying to the FBI in the Russia probe.” They also indicted Flynn for lying to the FBI in an interview that was itself a set-up.

The Roger Stone prosecution was emblematic of the through-the-looking-glass world of the Mueller probe. Stone had been a Trump-friend and confidante for years. He claimed in 2016 that he had a connection to Wikileaks and therefore could speculate with credibility about Clinton email contents and their drop date.

When questioned after the election as part of a Congressional investigation, he said his backchannel to WikiLeaks was comedian and radio talk show host Randy Credico. Credico admitted that at the time he was leading Stone to believe he had an in with Julian Assange, who had been on his radio show. He wrote an email to Stone on September 18, 2016: “that batch probably coming out in the next drop… I can’t ask them favors every other day. I asked one of his lawyers… they have major legal headaches riggt [sic] now… relax.”

Stone did not tell investigators that when he failed to get insider knowledge from Credico, he had a colleague, Jerome Corsi, try to contact Wikileaks. Corsi was unsuccessful in those attempts. In America, apparently, if your name is not James Comey or John Brennan, failure to disclose to Congress something you consider immaterial gets you indicted for perjury.

Any unbiased investigator would have looked at the Roger Stone facts and said, “Who cares?” Stone certainly had reason to believe Credico was a backchannel, and he had email evidence to prove it. Moreover, if Trump’s people really needed a backchannel to contact Wikileaks to inquire when the emails were being released, that means they did not have direct contact when the emails were obtained.

Once the Mueller team found out that Trump confidantes could not even get hold of Assange, it was time to end the inquiry over whether Trump conspired with Assange.

Stone emailed Credico after talking to investigators and said, basically, you better not lie to them like you lied to me or I’ll kill your therapy dog. That sort of bluster was not unusual in their relationship. Stone had once joked on social media that Credico had died of a drug overdose.

For his gag about killing the dog, Stone was also prosecuted for witness tampering, even though Credico himself admitted that he never felt threatened and considered it a joke. The prosecution of Roger Stone (before a tainted jury) was a misuse of the legal process for political ends. It was designed to generate a month’s worth of misleading headlines, each some variant of “Trump Advisor Found Guilty of Lying About Wikileaks.”

Stone was convicted and President Trump was forced, by the rules of fairness, to commute his sentence and incur unneeded controversy in an election year among voters who were purposely conned by the ridiculous prosecution.

The only actual Russians Mueller indicted were associated with an internet troll farm that, the indictment suggested, Putin had used to influence the 2016 election for Trump. The troll farm, the Internet Research Agency (IRA), had purchased $100,000 worth of Facebook ads, more than half of them after the election, and only a small percentage having anything to do with the candidates themselves.

The Mueller Report concluded that “[t]he Russian government interfered in the 2016 presidential election in sweeping and systematic fashion.” They did it by “a social media campaign that favored presidential candidate Donald J. Trump and disparaged presidential candidate Hillary Clinton.”

The Republican-led Senate Intelligence Committee commissioned two reports, from the University of Oxford’s Computational Propaganda Research Project and the firm New Knowledge, that also concluded that the IRA had influenced the election by social media posts.

The posts uncovered by the Senate and the Special Counsel, though, were beyond strange. Most had nothing to do with the election. Hilariously, Mueller tried to prove his case against the troll farm in court. The IRA unexpectedly hired lawyers to mount a defense instead of suffering an empty, unenforceable conviction by default. Turns out, nobody could connect even the minor trolling to Putin.

US District Judge Dabney Friedrich, who presided over the trial, noted the indictment in the case “does not link the [IRA] to the Russian government” and alleged “only private conduct by private actors.” The judge prohibited prosecutors from publicly claiming that the troll farm was sponsored by the Russian government, because there was no evidence of that.

The Justice Department was forced to dismiss the indictment.

As a final, desperation play, the Senate Intelligence Committee issued a report that defied the findings of the Mueller probe and suggested that Trump colluded with Putin during the 2016 election when Paul Manafort sent some polling data to Ukrainian Konstantin Kilimnik. There is no evidence that Kilimnik was a Russian agent or that the otherwise available polling data could possibly be used to influence an election.

Instead, by all accounts (even Mueller’s), Manafort was just trying to impress a possible consulting client who had previously worked closely with the Obama administration (far more closely than with the Trump campaign). That the U.S. Senate was willing to engineer the Russian interference virus into a strain that even Mueller rejected shows how much Washington wanted the phony political operation to continue.

At the end of it all, after tens of millions of dollars in investigations, and countless words spilled in the media alluding to a Russian conspiracy to steal the 2016 election, there was nothing there.

Attorney General William Barr eventually dispatched U.S. Attorney John Durham to investigate the origins of the Russia probe. Durham obtained one guilty plea. Turns out, FBI lawyer Kevin Clinesmith fabricated evidence to get a FISA warrant on Carter page. Otherwise, the Russiagate conspirators escaped. Once the Republican Senate Intelligence Committee conceded that Vladimir Putin meddled in the election, it gave the bad guys an airtight alibi.

John Brennan, James Comey, James Clapper et al. could say that whatever they did to stop the Red Menace from interfering in our democracy makes them American heroes. When he was interviewed, Brennan probably told U.S. Attorney John Durham that President Obama became concerned about Russian interference way back in 2015 and instructed the CIA to use all intelligence tools at its disposal to get to the bottom of it.

Guaranteed, that caused Durham to tug at his beard and ask, “How do you indict high ranking officials for protecting America?”

Durham never took the next logical step to call this operation what it was: a Washington power grab against an outsider using false Russian flags. He would have to cross lots of powerful Republicans and Democrats to take his investigation to its natural conclusion. That is unfortunate, because his failure has continued to vector American foreign policy in the direction of war.

“Putin is a thug” is a mantra that funds think tanks and embellishes the hero’s journey of many of Washington’s most notable Republicans. It is sourced less in fact than in constant repetition. How is Russia worse than Saudi Arabia, to whom the United States supplies F-15s and military training?

When President Trump finally met with Vladimir Putin in Helsinki in July 2018, he expressed skepticism about the Putin-did-it racket.  At a joint press conference with the Russian president, Trump was asked about allegations of Russian election meddling and he responded, “President Putin says it’s not Russia. I don’t see any reason why it would be.”

He added, “I would rather take a political risk in pursuit of peace than to risk peace in pursuit of politics,” signaling that he believed Russian interference was primarily an invention of his political enemies.

Trump even dared to bring up the FBI’s failure to test the DNC servers: “You have groups that are wondering why the FBI never took the server — haven’t they taken the server…. Why was the FBI told to leave the office of the Democratic National Committee?”

The Western media predictably went nuts. But the frenzy scuttled upon the rocks of public opinion, as usually happened with Trump. The Washington Post could not figure out the polling numbers Trump received after publicly rejecting the fake Russia meddled in the election narrative:

[P]ublic reaction nationally [to the Helsinki summit] appears more muted than in Washington, where Trump faced withering bipartisan criticism for appearing to side with Putin over U.S. intelligence agencies at a July 16 news conference in Helsinki.

The lesson? Standing against swamp politics to reestablish friendly relations with an armed nuclear state is not something that upsets ordinary Americans.

It is possible to admire the pure audacity of the plotters and their friends in the media for pulling this one off. For the first two and a half years of Trump’s presidency, they constructed a diabolical trap: if he denied that Russia interfered in the election it meant he himself was colluding in the conspiracy.

Republicans stupidly insisted on conceding phony Russian intrigue, which allowed the plotters to say they were justified to investigate it. Russian collusion was a hoax. It is time to finally admit that there was no Russian interference either.

The Republican establishment’s slavish acceptance of Washington’s Putin-did-it lie perfectly illustrates why it regularly loses political battles. Gifted in 2016 with undeserved victory in a generational realignment that they were dragged to kicking and screaming, they proceeded to question its source and validity.

Because if Trump was a product of KGB-esque intrigue, then Hillary was a victim of meddling. Trump was at least a hapless beneficiary. The basket of deplorables were not only racist losers, they were also Putin’s unwitting stooges.

There was always a basic logical contradiction in Russiagate: If the Steele dossier tapped Russian sources to reveal a Putin plot to harm Hillary, why did it primarily include crazy stuff that hurt Trump? And if it was created to smear Trump, why did the intelligence community rely on it to conclude that Putin was out to get Hillary?

Read closely, the dossier tells you who fabricated it beginning on its first page:

Source B asserted that the TRUMP operation was both supported and directed by Russian President Vladimir PUTIN.  Its aim was to sow discord and disunity within the US itself, but more especially within the Transatlantic alliance which was viewed as inimical to Russia’s interests.  Source C, a senior Russian financial official said that the TRUMP operation should be seen in terms of PUTIN’s desire to return to Nineteenth Century ‘Great Power’ politics anchored upon countries’ interests rather than ideals-based international order established after World War Two. S/he had heard PUTIN talking in this way to close associates on several occasions.

The key is the use of the descriptor trans-“Atlantic” in describing Putin’s ambitions. That is a Washington insider word. It is the “A” in NATO. It is the “Atlantic” in Atlantic Council. Unless Vladimir Putin goes around the Kremlin talking like a NATO lobbyist, he never said any of those things.

An ideals-based Transatlantic alliance that defies the rabble who prefer governance based on national interest is, instead, the postwar foreign policy paradigm called Atlanticism.

In the end, the political class wanted Russian interference to be true because of Atlanticism’s continuing hold over the American soul. The evil geniuses behind this operation baited the hook with a Putin lure knowing that the Republican establishment (see, e.g. Paul Ryan, Mitt Romney, NeverTrump) would not be able to resist.

“Russia v. America the Rematch” would make America 1985 again, and Republican insiders threatened by Trump’s insurgency would reclaim their petty thrones and dominions.

If there were not places like the Brookings Institution and the Atlantic Council funded by foreign governments with pecuniary interests in keeping NATO bases in their countries, this operation never would have gotten off the ground.

The Russia hysteria proves, more than anything, that America is not a democracy. It is an insider-ocracy run by lobbyists and think tanks even against the choices of American voters. Eisenhower said to beware the military industrial complex, and that remains a fair description of the great amorphous beast.

Trump’s first term was crippled by Atlanticism. In his second term, he has turned spectacularly on the beast, driving a stake into its still beating heart. The true facts of Russiagate are especially important as the Trump administration proceeds to transform the foreign policy establishment. The above telling is the full story of the worst scandal in American political history.

Tyler Durden
Fri, 03/07/2025 – 18:25

Consumer Credit Jumps More Than Expected In January, Back Over $5 Trillion

Consumer Credit Jumps More Than Expected In January, Back Over $5 Trillion

We have repeatedly warned that with their savings – and especially “emergency covid savings” – gone or nearly gone, Biden admin’s residual savings data manipulation notwithstanding…

… US consumers had no choice but to max out their credit cards in order to “extend and pretend” their moment of purchasing greatness, or as we called it three months ago, their last hurrah (see In “Last Hurrah”, Credit Card Debt Explodes Higher Despite Record High APRs As Savings Rate Craters), a hurrah that would last very briefly as it was only a matter of months if not weeks before said cards were denied.

One month later, that’s exactly what happened, when to our surprise, revolving credit cratered at the fastest pace since the covid crash, contracting a whopping $13 billion, an event which for a country that lives on debt – literally – is unheard of outside of a recession.

Commenting on the plunge, we said that “we don’t know what sparked this sudden reversal in the favorite American pastime – i.e., to buy stuff one can’t afford and hope to pay it back some time in the future for a modest 29.95% APR – but we know what didn’t: falling rates… because they didn’t.” We then proceeded to show that the average interest rate on credit card balances were at the second highest on record ever though the Fed had already cut rates by 100 bps.

And while it would have been normal, if not expected, for credit card balances to continue declining with savings rates near record lows and with credit card rates at record highs, trust the US economy to do precisely the opposite of what is logical and according to the latest just released consumer credit data, US consumers exited 2024 with a bang after Consumer credit soared by a record $40.8 billion in December, a complete reversal of the November drop, and a month that sticks out like a sore thumb in the history of consumer credit as shown below.

And while one would expect that the record December surge in credit would quickly reverse at the start of the year amid the ongoing drawdown in savings – and the lack of holiday spending – the US consumer has a habit of doing just the opposite of what is expected, and according to the latest NY Fed data, in January consumer credit surged again, rising by $18.084 billion (from a downward revised $37.1 billion vs $40.8 billion previously), and the third highest monthly increase since June 2023…

… which sent the total back over $5 trillion.

Taking a closer look at the number, revolving credit – i.e., credit card debt – increased by $9 billion or roughly half of the near record $21 billion surge in December.

Non-revolving debt (i.e. student and auto loans) rose almost by the same amount, up $9.1 billion and also down from the $16.2 billion the previous month.

Looking at the composition of nonrevolving credit, the Fed reported that in Q4 student loans rose by $4.2 billion, well below the $31.8 billion increase in Q3, though still enough to push the total amount to a new record high of $1.777 trillion, while auto loans posted a more modest $2.1 billion increase to $1.569 trillion.

To be sure, while a drop in consumer credit could have been explained with the fact that credit card APRs were at all time highs (currently 23% up almost 10% from a decade again), the fact that APRs remained just shy of a record high – half a year into the Fed’s easing cycle – certainly does not explain why US consumers scrambled to max out their credit cards both at the end of 2024 and at the start of 2025, just as their savings accounts hit the lowest level in years.

And as we warned last month, “while the recent surge in credit card usage may explain the burst in spending to end the year, there is only so far that an economy can be pushed with maxed out credit cards”, something which the market is finally starting to realize today.

Tyler Durden
Fri, 03/07/2025 – 18:00

Bill O’Reilly Reveals The Dark Future Trump Created For The Democratic Party

Bill O’Reilly Reveals The Dark Future Trump Created For The Democratic Party

Authored by The Vigilant Fox via modernity.news,

Bestselling political author Bill O’Reilly says Donald Trump has driven the Democratic Party to the edge of total collapse.

On Wednesday night’s episode of Cuomo, O’Reilly laid out exactly why the Democrats are in freefall — comparing their current situation to the collapse of the Republican Party in 1931, when Herbert Hoover’s response to the Great Depression left Americans furious.

“I think the Democratic Party is on the verge of collapse. And I liken it to 1931, when Herbert Hoover and the Republican Party basically said to the very suffering American people in the Depression, ‘We’re not helping you. You got to do it on your own. It’s all about self-reliance. We’re not going to give you any safety nets.’ That led to five consecutive Democratic wins. Five,” O’Reilly stressed.

“[It wasn’t] until Dwight Eisenhower, 20 years later, did the Republicans recover. I see the same scenario for the Democrats.”

WATCH:

What’s the driving force behind the Democrats’ collapse? O’Reilly pointed to their obsessive hatred of Trump, explaining that it has clouded their judgment so much that they’ve lost all sense of reality and purpose.

“What happened [to the Democratic Party]?” O’Reilly asked. “What happened was Trump hatred,” he explained. “And that’s what the headline is of the speech [Tuesday] night. When you are hating someone, you lose all perspective, you lose all feeling, you’re consumed.”

O’Reilly even tied this kind of blind hatred to historical evil.

“And I wrote a book, it’s going to be out in September, called Confronting Evil. And these people who did all these terrible things, they all had one thing in common. They hated. They were just haters across the board. That’s what you saw in that chamber last night.”

If O’Reilly is right, Democrats could find themselves locked out of the White House for 20 years or longer. It turns out that when your entire platform revolves around hating and opposing Trump, you no longer have a platform worth running on. Good riddance.

Watch the Full Video:

Tyler Durden
Fri, 03/07/2025 – 17:40

Federal Dependency Is A Ticking-Time-Bomb For State-Budgets

Federal Dependency Is A Ticking-Time-Bomb For State-Budgets

Authored by Vance Ginn via TheDailyEconomy.org,

Imagine finishing high school and realizing that no matter what path you take – college, a job, or starting a business – your money doesn’t go as far as it should. 

Your car loan is more expensive, rent keeps rising, and groceries cost more monthly. 

If you go to college, tuition is higher; if you don’t, more of your paycheck disappears in taxes. 

This isn’t just bad luck – it’s the result of reckless government spending that fuels inflation, drives up interest rates, and makes it harder for everyone to get ahead.

In fiscal year 2023, federal funds to state and local governments totaled $1.1 trillion, nearly one-fifth of all federal spending and 4 percent of US GDP. This money doesn’t come free — it’s taken from taxpayers, borrowed from future generations, or printed by the Federal Reserve, creating inflation.

Even states that claim to be fiscally conservative are hooked on federal money. Texas took in $102 billion for its 2024-2025 budget, nearly one-third of its total budget. That means Texas, like all states that average 36 percent of their budget from federal funds, is highly tied to federal mandates for what it wants to do.

The biggest driver of this dependency is Medicaid, which received $616 billion in federal spending in 2023, over half of all federal funds to states. Many states expanded Medicaid with temporary federal funds, but when Washington inevitably pulls back, states will be forced to raise taxes, cut services, or both, burdening many families. The same pattern applies to federally backed education and transportation spending. 

The more states rely on Washington, the less control they have over their policies.

This isn’t just about wasteful spending — it directly hits American households. More deficit spending contributes to higher interest rates, making mortgages, student loans, and car payments more expensive. The Fed buying Treasury debt to keep interest rates lower by increasing the money supply creates inflation, forcing families to stretch their scarce budgets further. 

Every dollar the federal government spends on state programs is taken from the economy, where businesses and individuals could have put it to far more productive use. The ongoing budget fight in Washington makes one thing clear: states can’t count on federal funds forever. 

Through the Department of Government Efficiency (DOGE), President Trump and Elon Musk have started freezing wasteful grants and unnecessary spending — steps that should have happened long ago. 

Critics claim this is an overreach, but the real issue is decades of reckless spending leading to a $36 trillion national debt and a Congress unwilling to act.

The Keynesian idea that government spending fuels growth is a myth. Milton Friedman warned that spending is a cost, not a benefit. Every dollar Washington spends is taken from the productive private sector, where real wealth and innovation are created. More government spending crowds out private investment, reduces productivity, and leaves taxpayers with higher costs.

States that are the most dependent on federal aid — Louisiana, Alaska, and New Mexico, where over 50 percent of revenue to cover their budgets comes from Washington — also tend to have some of the weakest economies. The more states rely on federal funds, the less incentive they have to keep taxes low, cut regulations, and encourage private investment.

Trump’s spending freezes have upset politicians who depend on federal funds to prop up bloated budgets, but the real issue is that states allowed themselves to become dependent.

Excluding federal funds, state spending has grown by 61.1 percent from 2014 to 2023, far outpacing the 31 percent in compounded population growth plus inflation. But of course, much of that state spending increase is matched by as much, if not more, in federal funds, creating perverse incentives for states to spend more. But excluding federal funds from state spending over that decade helps to remove much of the increase in federal funds to states for those states that expanded Medicaid. Ultimately, had states kept their spending in check, they could have saved taxpayers $454 billion in 2023.

With Washington facing a growing debt crisis, states must act now to prepare for less federal funding. 

That starts with transparency — understanding exactly how much money comes from Washington, where it goes, and which programs will be at risk when federal dollars dry up. Then, states must rein in spending, eliminate inefficiencies, and take back control over education, healthcare, and transportation so they are not at the mercy of federal strings.

Some states are already moving in the right direction. 

Nearly a dozen — including Oklahoma, Louisiana, Iowa, Texas, and Florida — have launched a DOGE to expose waste and inefficiency. Oklahoma’s Division of Government Efficiency has already uncovered millions in unnecessary spending, providing accountability for spending with taxpayer money.

Long-term spending relief, however, requires Congress and state legislatures to act. While Trump and DOGE are taking steps, only Congress can make these cuts permanent. Without legislative action, future administrations could reverse spending freezes. Lawmakers who claim to be fiscal conservatives must prove it.

Some states have already shown that spending restraint works. Alaska, Colorado, North Dakota, Oklahoma, and Wyoming have kept their entire budget growth below inflation and population growth over the last decade, ensuring taxpayers aren’t overburdened. Others, like Louisiana, Massachusetts, and North Carolina, have slowed state spending growth below this key rate but remain too dependent on federal funds that grew more rapidly.

The Sustainable Budget Project by Americans for Tax Reform found that if governments had capped federal and state spending growth at population growth and inflation, taxpayers could have saved $2.5 trillion in 2023. That money could have been invested in businesses, used to create jobs, or saved for the future. Instead, excessive spending has made our lives more difficult.

Rising interest rates and national debt will eventually force Congress to reduce spending, leaving states with two painful choices: massive tax hikes or severe service cuts. There are no more excuses. Congress must spend less. To prepare for this inevitability, states must spend less, reject federal money with strings attached, and embrace free-market principles before it’s too late.

Tyler Durden
Fri, 03/07/2025 – 17:00