TAXPROF ROUNDUP: The IRS Scandal, Day 817.

RUNNING OUT OF OTHER PEOPLE’S MONEY: Puerto Rico Has Defaulted.

It’s all over the wires: Puerto Rico has defaulted on its $58 million payment to creditors of its Public Finance Corporation, which was due by the end of day. San Juan’s treasury only managed to scrape together some $628,000 towards the total. The government had tried to argue that the PFC bonds were of a different category—and had a different legal status—than general obligation debt. Credit rating agencies rejected the argument. “Moody’s views this event as a default”, Moody’s analyst Emily Raimes said in a statement, according to Reuters. “This is a first in what we believe will be broad defaults on commonwealth debt.”

What now? A whole lot of mess, more than likely.

That’s what happens when you run out of other people’s money.

STANDING ATHWART HISTORY, ARMED WITH LAWSUITS: “Uber Battle in New York Shows the Problems and Promise of the Sharing Economy,” Rick Moran writes at the PJ Tatler, noting that the goal of the reactionary left is “Lawfare writ large. If you can’t beat ‘em, kill ‘em. The enemies of what some observers are calling ‘The Next Big Thing’ are looking to strangle this derivation of the sharing economy in its infancy.”

IT’S CALLED THE AUDACITY OF HOPE: Iran publishes book on how to outwit US and destroy Israel.

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UNEXPECTEDLY: Report: Obama Admin Taking the Side of Palestinians Over U.S. Citizens in Terror Case.

ABOLISH GOVERNMENTAL IMMUNITY, MAKE COPS BUY INSURANCE: SWAT Team Liable for Wrong-House Flash-Bang Raid on Grandmother, Teen Girl; Can Be Sued For Their Actions. Judge Richard Posner compares police action to Keystone Kops. Except the Keystone Kops were funny.

HOW’S THAT HOPEY-CHANGEY STUFF WORKIN’ OUT FOR YA? (CONT’D): GDP Numbers Keep Getting Worse. “In the 138 years from 1870 to 2008, the US economy expanded by about an average of 3% a year. After the revisions to GDP data from 2012-2014, we see that the U.S. economy since the financial crisis has been growing an average of 2.0% a year versus the earlier 2.3%. The difference between 3% and 2% may not sound like much, but think of it this way: At a 3% growth rate the economy doubles in about 24 years. At a 2% growth rate the economy doubles in about 36 years – 50% MORE time!”

Plus: “Today there are 136 people receiving some sort of government benefit for every 100 people employed in the private sector.”

HILLARY SCANDAL UPDATE: Judge Slams Hillary and Huma, Orders Answers.

ASHE SCHOW: Judge again dismisses lawsuit from man accused of sexual harrasment without evidence.

Judge Margaret Morrow, a U.S. district court judge, dismissed for the second time a lawsuit filed by Scott Hounsell, a former executive director of the Republican Party of Los Angeles County. This was Hounsell’s amended complaint filed earlier this year.

But in a move beneficial to Hounsell, Morrow did not dismiss the lawsuit with prejudice, allowing the former Republican staffer to amend his complaint once again, in part thanks to reporting on the case by the Washington Examiner.

Hounsell’s trouble began in 2012, when he participated in a bus caravan from Sacramento to Santa Clarita while he was still working for California State Assemblyman Cameron Smyth. Along for the trip were students from a local charter school who were learning about politics. One of those students was “Jane Doe” (her name was changed since she has not been charged with a crime), who would later accuse Hounsell of inappropriate behavior.

Doe claimed she sat next to Hounsell for about two hours during the return bus trip. One of her teachers disputed this claim, saying Doe had been kept away from Hounsell because she had remarked earlier she thought he was “cute.” Hounsell says he spent the return trip sitting next to friends and watching a movie.

Facebook messages between Doe and, allegedly, Hounsell sent nearly a year after the bus trip were discovered on Doe’s computer at school when she left the social media website open. Screenshots of the messages were taken by other students (though they appear to be screenshots of a phone, not of a computer) and sent to school administrators.

When school officials questioned Doe about the messages, she said that Hounsell had tickled her ribs on the bus trip but that the messages didn’t start until sometime after the trip. When she was questioned by the police weeks later, she claimed that Hounsell had tickled her leg while talking to another person and that sexually explicit Facebook messages began while they were both on the bus.

Doe insisted to police that she never planned to follow through with anything said in the messages and that she and Hounsell had never made plans to do so. Doe gave police access to her Facebook account to search for the messages. They found none.

Despite this, and the district attorney declining to file charges, the Los Angeles City Attorney picked up the case almost immediately and charged Hounsell with two counts of trying to seduce a minor. Before Hounsell was even aware of the charges, he says he and his former employer were inundated with media calls. Hounsell turned himself in downtown as media vans swarmed his home. He spent seven hours in jail.

Democratic prosecutors target political enemies and call it “justice.”

24 HOURS LATER, here are the results of the InstaPundit readers poll:

Overall, not much change from the first hour, despite a lot more votes. I’m not surprised that Scott Walker and Carly Fiorina are popular among InstaPundit readers, but I am surprised at the size of Walker’s margin.

OUR SOURCE WAS THE NEW YORK TIMES: Real Time magazine headline: “Charles Koch Says U.S. Can Bomb Its Way To $100k Salaries,” as spotted by Mary Katharine Ham at Hot Air:

You won’t be surprised to learn that the libertarian Koch said…exactly the opposite. What he was pointing out as a “monstrous measure” was the amount of spending, particularly government spending on among other things military endeavors, that goes into the GDP that might not be a great representation of the growth of our economy.

The body of the story makes clear what Koch was saying, but the headline is horrendous.

To their credit, MKH adds that Time has since toned down their headline, but I’m not sure why they would have complained if Charles Koch had said what their original version implied. As James Taranto noted at the Wall Street Journal in 2010, Paul Krugman of the New York Times was praising the “miracle of the 1940s” for saving the reputation of FDR’s New Deal. In response, Taranto wrote:

What Krugman calls “the miracle of the 1940s” is more commonly known as World War II, a ruinous conflict that cost some 60 million lives, including more than 400,000 American ones, and that entailed the near-extermination of Europe’s Jewish population.

World War II is sometimes called a “good war,” meaning that few dispute American intervention was necessary or that we fought on the right side. But this easy moral clarity is possible only because the Axis actions that started the war were unambiguously evil.

In April 2009 we noted that David Leonhardt, a Krugman colleague at the Times, had praised the economic policies of Germany’s National Socialist Party. Now Krugman calls World War II itself a “miracle.” The Old Gray Lady is in the grips of utter madness.

Far from the only ones — but then, it’s hard out here for a Democratic operative with a byline.

HIGHER EDUCATION BUBBLE UPDATE: Study: Yes, Student Loans Are Making College More Expensive. “We find that institutions more exposed to changes in the subsidized federal loan program increased their tuition disproportionately around these policy changes, with a sizable pass-through effect on tuition of about 65 percent.”

Do tell.

THE HILL: Poll: Clinton’s favorability takes a major hit.

Hillary Clinton’s favorability is sinking further underwater, according to the latest NBC News/Wall Street Journal poll released Monday night.

The Democratic presidential candidate is viewed unfavorably by 48 percent of likely voters, compared with 37 percent who view her favorably.

Her ratings are down significantly from the last NBC/WSJ poll in June, when 44 percent viewed Clinton favorably versus 40 percent who viewed her unfavorably.

These numbers will certainly add to the consternation already permeating Democratic circles following a recent Quinnipiac University poll which showed Clinton’s favorability drowning in key swing states.

True: Bill suffered worse. But Hillary ain’t Bill.

CBS, NBC MINIMIZE COVERAGE OF NEW MEXICO CHURCH BOMBINGS: “One wonders how much air time the Big Three networks would set aside if the two bombings took place outside of mosques in New Mexico.”

THE MEDIA/GOVERNMENT CLASS IS AMAZINGLY INCESTUOUS: Sen. Chuck Schumer enlists famous cousin Amy to pitch gun control bill.

RICHARD FERNANDEZ: Reinforcing Failure. “Venezuela is a problem similar but more severe than the challenge Greece poses to the European Union. In both cases you have countries with large voter blocs of socialist believers. They are charming, sympathetic and economically hopeless. Nobody even pretends to believe that another bailout will help Greece. Realistically no amount of charity will sustainably help Venezuela either, if the 12th largest oil reserves on the planet could not. About all a handout will do is simultaneously reinforce failure and obscure its causes.”

PRIVILEGE NOT CHECKED: Chuck Todd Lectures Ben Carson Over ‘Black Lives Matter’ Movement.

MARC THIESSEN: Hillary’s Sandy Berger Problem.

The Clinton e-mail scandal reached a new level of seriousness when the intelligence community inspector general found classified information from five intelligence agencies in e-mails housed on Clinton’s private server. It is against the law to remove classified information from government facilities and retain it after you have left office and have no official reason to possess it.

Just ask Sandy Berger. In 2003, Bill Clinton’s former national security adviser was caught removing five classified documents from a secure reading room at the National Archives, as he prepared to testify before the 9/11 commission.

A Justice Department investigation ensued and in 2005 Berger reached a plea agreement in which he was allowed to plead guilty to a misdemeanor charge of unauthorized removal and retention of classified material instead of a felony. He was sentenced to two years of probation and 100 hours of community service and was stripped of his security clearance for three years. Prosecutors and defense lawyers agreed on a $10,000 fine, but the judge raised it to $50,000. In 2007, in order to shut down a disbarment investigation by the District of Columbia bar, he relinquished his license to practice law.

That was for unlawfully removing and retaining just five classified documents.

Clinton has apparently been caught removing at least five e-mails containing what we now know to be classified information and retaining them on her personal server in her home in Chappaqua, N.Y., after she left office. And in the weeks ahead, that number will probably grow to the hundreds, if not thousands.

Berger got a good deal because he was a Clinton minion. But Hillary’s not a Clinton minion, she’s a Clinton.

14 NO TRUMP—GRADING THE CANDIDATES: Who won Monday’s rehearsal for Thursday’s first big GOP debate? Roger Simon casts his vote at his Diary of a Mad Voter site.

What’s your take? Let us know in the comments.

CHANGE: Dutch King Willem-Alexander declares the end of the welfare state. “The classic welfare state of the second half of the 20th century in these areas in particular brought forth arrangements that are unsustainable in their current form.”

THE WAPO ON CHARLES KOCH AND HIS PARTNERSHIP WITH THE UNITED NEGRO COLLEGE FUND:

Their relationship is viewed with deep skepticism among many liberal leaders, who accused the college fund president of betraying his principles last year when he accepted $25 million from Koch Industries and the Charles Koch Foundation. The American Federation of State, County, and Municipal Employees ended its scholarship program with the college fund after Lomax attended a Koch donor meeting. . . .

He and Lomax have found common ground over the issue of criminal justice reform, a cause that Koch Industries has taken up. And Koch expressed concern about the recent spate of high-profile incidents in which black men have died at the hands of police officers.

“To me, if someone is committing a crime, to deal with it needs to use the minimum force necessary to prevent that crime,” Koch said, alluding to the death last year of Eric Garner during a confrontation with police in Staten Island. “There has got to be a way to stop that. I mean, I’d let the guy go. No big deal. He’s not really hurting — maybe he’s avoiding taxes or something, but to end up in his death is outrageous.”

The conservative benefactor’s friendship with Lomax began after the former president of Dillard University in New Orleans took the helm of the college fund in 2004. Georgia-Pacific was a longtime supporter of the group, and when Koch Industries bought the paper company the following year, Lomax saw an opportunity.

When the UNCF launched a major fundraising drive several years ago, one of his first stops was Koch Industries.

As part of a 2014 grant that Koch gave to the college fund, $18.5 million went to create a Koch Scholars program, which provides scholarships based on financial need to students interested in economics and entrepreneurship.

Read the whole thing.

JOURNALISM: Time Smears Charles Koch in Headline; Changes Headline, Still Misses His Point.

THAT TALKING POINTS MEMO IS “DISGUSTED” IS JUST A BONUS: Ted Cruz is making bacon with a machine gun.

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