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Unleash Prosperity Hotline
Issue #1276
06/02/2025
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1) $1 Trillion a Year in Fraud!!!

This estimate doesn't come from us or DOGE, but the U.S. government's OWN auditors.

Bravo to - of all places - 60 Minutes for their interview with Linda Miller, formerly a chief investigator at the Government Accountability Office, who has tracked how taxpayer money is misspent. GAO's official assessment is that taxpayers are victims of $520 billion a year in fraudulent and "erroneous" payments.

But here is Miller's assessment as featured on 60 Minutes:

"I believe the government is losing between $550 billion and about $750 billion a year. We're coming up close to the $1 trillion amount-- is lost, every year, to fraud."
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Let's say she is off by 50%. That's still close to $5 trillion in fraud over 10 years, and that's at least three times as much as the savings in the GOP budget.
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2) Steel Tariffs Again? Say It Ain't So!

President Trump says he will now seek a 50% tariff on imported steel, up from 25% currently. He describes this policy as "a fence" that foreign steel producers "won't be able to jump over."

Trump's heart may be in the right place to save steel jobs, but as we've pointed out repeatedly on these pages, steel tariffs are a net loser on jobs.
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We learned this in Trump's first term when Federal Reserve Board economists found ([link removed]) that these metal tariffs were

"associated with a relative reduction in manufacturing employment of 2.7 percent, with the positive contribution from the import protection effects of tariffs (0.4 percent) more than offset by the negative effects associated with rising input costs (-2.0 percent) and retaliatory tariffs (-1.1 percent)."

The industries that were most disrupted by the tariffs were transportation, manufacturing and construction.
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Mr. President, don't go there again. A better idea is the 15% made in America corporate tax.
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3) In UK: Higher Capital Gains Tax Tanks Revenues

The politicians seem to never learn:

Last October, Britain's new Labour government unveiled a budget it proudly said would achieve the highest revenue as a proportion of GDP since World War Two. It included an immediate hike in the top capital-gains tax rate from 20% to 24%. The carried interest capital gains tax went from 28% to 32%. Even the lowest bracket went from 10% to 18%.

The results won't shock HOTLINE readers. Capital gains tax receipts have fallen 10% in the past year, despite a 20% increase in the rate.
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Jonathan Riley, a tax advisory lawyer, explains what is happening: "Business owners have been asked the question: would you like to sell your business (regardless of where it is located) and pay 24 per cent tax, or would you like to move (for example to Portugal, Italy or Spain), sell your business and pay no tax?"
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4) The Mississippi Miracle - Schools That Actually Teach Kids How to Read

Mississippi has among the lowest education spending per pupil of any state, yet over the past decade it has made impressive strides in test scores compared to other states. Look at the difference between Maryland and Mississippi:
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Maryland suffered the country's largest plunge driven by prolonged COVID school lockdowns and over the top wokeness. But almost every state looks bad these days compared to Mississippi:
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Mississippi Governor Tate Reeves explained how they did it:

"It is the direct result of passing conservative reforms in our legislature in 2012 and 2013, followed up by a very strong implementation by our Department of Education and a lot of hard work by teachers and students, and parents all over the state… We went back to teaching reading, utilizing phonics. It was the right thing to do for our kids."
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5) Save Me San Francisco

Mayor Daniel Lurie declared the end to San Francisco's "soaring city budgets" last week, by announcing he would eliminate 1,400 city jobs, cut $185 million in grants to outside groups, and steer spending to core services like police and clean streets.
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Lurie is an heir to the Levi Strauss clothing fortune, who ran a successful non-profit for many years. Now he’s trying to balance a $16 billion budget deep in the red. The city employs nearly one of every 10 workers in the area.

Tragically, this once-iconic American city collapsed during COVID lockdowns and woke policies in its aftermath. Businesses have fled and tourism has collapsed. The fiasco is being called by frustrated locals: a "doom loop.”

Lurie may not like references to his shock therapy as a city-version of DOGE, but this sounds an awful lot like what Elon Musk was trying to do in Washington.

Hallelujah!
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6) Oldie But Goodie - Laffer in a Doonesbury Cartoon

And speaking of the Laffer Curve (see Item 3 above), as we celebrate its 50-year anniversary we wanted to reprint this historic 1981 cartoon:

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