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Senator John Kennedy (R.-LA)

In these days of Bidenomics and rampant inflation, 1% matters.  A single percent added to a home loan can be the difference between affording a home or not.  The same is true for an auto loan, the second most expensive thing most Americans will ever buy.  Keep that in mind as you read about how our dimwitted Treasury Secretary, Janet Yellen, is handling the nation’s finances:

Republican Louisiana Sen. John Kennedy accused Treasury Secretary Janet Yellen in a Tuesday hearing of striving to boost the economy by borrowing short-term, higher-interest rate debt to help President Joe Biden secure reelection.

Surely no treasury secretary, charged above all with seeing to America’s financial health, would do something like that!

The national debt has surged to nearly $34.6 trillion under Biden, which is around $6.8 trillion more than when he took office. Kennedy criticized Yellen for her department borrowing shorter-term bonds with higher interest rates instead of longer-term bonds that have lower interest rates.

‘Today you can borrow for 10 years at 4.4%. Instead, you’re choosing to borrow at 5.4%,’ Kennedy said. ‘That makes no sense!’

Not to people who care about not wasting other people’s money.  But as Margaret Thatcher said, the trouble with socialism is you always run out of other people’s money.

‘Market participants believe that short-term interest rates will come down, and they will come down to a level substantially below the current 10-year,’ Yellen responded.

And just who are these “market participants” and why should the US Government base the fate of untold billions on whatever their belief might be?  Yellen doesn’t say.

The current ten-year borrowing rate for Treasury bonds is 4.35%, which is the lowest it has been in roughly three weeks, according to Trading Economics.

“Three weeks”?! We’re making those kinds of decisions on what may or may not be a trend only three weeks old?

‘You announced last November … that we have decided to start issuing an inordinately large amounts of short-term debt, didn’t you?’ Kennedy asked, to which Yellen answered affirmatively.

‘Because of the inverted yield curve, that means that you’re gonna pay more in interest on short-term debt than say 10-year debt,’ the senator said. ‘Now that’s a fact. You can go check the numbers of Treasuries yesterday. First, that costs taxpayers a lot more money in the interest. And number two, you’re working at cross purposes with the Federal Reserve because what you’re doing is stimulating the market. You’re pumping money into the economy and Jay Powell’s over here beavering away trying to reduce inflation. And you’re beavering away trying to increase it.’ [skip]

‘By paying an interest rate that is 100 basis points higher than you would have to pay,’ he said. ‘And the only reason I can figure that y’all are doing that is, is to try to give the economy a sugar high five months before an election. Why else would anybody want to borrow at 5% when you can borrow at 4%?’ [skip]

Kennedy specified he’s concerned about taxpayers rather than investors, but Yellen said the principle is the same for both.

‘You’re borrowing at 5% when you could borrow at 4% to deficit spend. And it makes absolutely no sense why you would do that other than to try and artificially stimulate the economy and help Joe Biden get reelected,’ Kennedy said. [skip]

Average interest rates on credit cards have also spiked recently, increasing from 14.56% in February 2022 to 21.47% as of November 2023. Americans’ credit card debt rose by $143 billion in 2023, reaching over $1 trillion in total.

‘My mama didn’t raise a fool and if she did, it was one of my brothers,’ Kennedy said, restating his assertion that Yellen is attempting to help Biden win, but the Treasury secretary denied that short-term debt borrowing gives the economy a ‘sugar high.’

Remember this Yellen greatest hit?  

Treasury Secretary Janet Yellen told  Fox Business Network this week that she regrets using the word ‘transitory’ to describe the post-Covid pandemic inflation, framing it as a good-faith prediction gone wrong. This is revisionist history.

It is clear that Yellen participated in a concerted political effort to dismiss the growing concerns about spiking pricing because Democrats were trying to ram through a massive, cronyist, welfare-state boondoggle using reconciliation. Her rhetoric mirrored that of the entire White House. Yellen didn’t misjudge anything; she followed a script. (Though it is a possibility she actually wrote it.)

But we should absolutely believe her:  

When asked about the dire predictions of economists, Yellen said, ‘I really don’t think that is going to happen. We had a 3.5% unemployment rate before the pandemic and there was no sign of inflation increasing.’ That was on March 8, 2021. On March 1, 2021, The Wall Street Journal reported that ‘anxiety about inflation is at a fever pitch, among economists and in markets, where long-term interest rates have been grinding higher since President Biden unveiled plans for huge new fiscal stimulus.’

Senator Kennedy is right.  Yellen isn’t remotely in his intellectual league.  The Mummified Meat Puppet Administration (MMPA) is doing everything it can in the remaining months before the presidential election to try to trick Americans into thinking the economy is just great, as Joe Biden keeps saying.  Consider the Strategic Petroleum Reserve (SPR):  

WASHINGTON, June 3 (Reuters) – The U.S. is buying another 3 million barrels of oil for the country’s Strategic Petroleum Reserve, the Department of Energy said on Monday, as it slowly replenishes the stockpile after the largest sale ever in 2022.

The oil, which is for delivery to the SPR in November, is being purchased at an average price of $77.69 per barrel, the department said.

The replenishment of the SPR is needed after President Joe Biden ordered the sale of 180 million barrels over six months in 2022 in an effort to control fuel prices after Russia’s invasion of Ukraine. The DOE said it has purchased back 38.6 million barrels, and that it would continue to look for opportunities to buy back oil for the stockpile.

Here’s what the article is not saying: that 2022 “effort to control fuel prices” was a cynical attempt to buy votes, to trick Americans into thinking Biden was lowering gas prices.  The SPR is supposed to be for national emergencies like wars.  Most of our navy is not nuclear powered, and our land and air forces surely are not.  Biden has so depleted the SPR for temporary political advantage if we got into a war, we’d run out of fuel in weeks, if that long.  It’s also not saying Biden’s handlers have done nothing to refill the SPR at lower oil prices, because they don’t care about national security.  They care only about keeping power.  Joe Biden is senile.  He’s running nothing.

How can we know that?  Consider this from May 21:  

The Biden administration said Tuesday it is releasing 1 million barrels of gasoline from a Northeast reserve established after Superstorm Sandy in a bid to lower prices at the pump this summer.

The sale, from storage sites in New Jersey and Maine, will be allocated in increments of 100,000 barrels at a time. The approach will create a competitive bidding process that ensures gasoline can flow into local retailers ahead of the July 4 holiday and sold at competitive prices, the Energy Department said.

So the MMPA is  trying to refill the SPR while it’s simultaneously draining the SPR for transitory political advantage.  How does this tie into what Yellen is doing?

Final Thoughts:  Senator Kennedy is on target.  Particularly when we’re talking borrowing on a national scale, the numbers become so big as to be almost impossible to understand.  A single percent turns into untold billions for the brokest nation in history, a nation printing untold billions every week, which drives up inflation, while spending trillions we don’t have, which continually runs up the national debt.  We currently spend more than a trillion more per year than we take in.

Ethical politicians would put a stop to this, but instead, they keep spending, printing money, and raising the debt ceiling—the amount we can borrow and spend—rather than imposing budgetary restraint.  What makes this worse is politicians like Biden’s handlers and Yellen who deny inflation is as bad as it is, or in some cases, that it even exists.

They think they can gaslight Americans, telling them everything is just fine, and they’ll forget how $200 no longer fills a grocery cart, and upwards of a $100 is required to fill a gas tank.  They tell Americans electric vehicles will save them fabulous amounts of money.  All they have to do is find someone willing to loan them $68,000 or more at 7+% interest for an EV.

Yellen thinks Americans as so stupid they don’t realize borrowing at 5.4% costs more—a lot more—than borrowing at 4.4%.  They think Americans are so stupid that if gas prices temporarily go down 20 cents or so just before an election because Biden’s handlers are putting America in danger for electoral advantage, they won’t realize those prices will go back up if Biden is elected, and will worsen as his handlers impose even more draconian anti-energy policies.

The sad truth is, Democrats/Socialist/Communists don’t care.  They’re willing to put America at risk.  They’re willing to crash the economy so long as they retain power.  Equally sadly, a great many Americans, perhaps enough to swing an election, are woefully uninformed—“low information voters.”

Politicians on both sides tell us this will be the most important election in history.  D/S/Cs, because if they don’t win, their destructive policies won’t be implemented, and it could be many years, even generations, before they’re able to get power again.  Republicans like Senator Kennedy because if they don’t win, we’re going to lose our constitutional, representative republic, and liberty once lost, is virtually never regained.

Realizing that far too many Americans are economically illiterate, and don’t know we aren’t a democracy but a representative republic, or the difference, is sobering.  And Janet Yellen is an incompetent, and a poor liar.  She has a great deal of company in the MMPA.