TRUMPERNOMICS FOR THE
RICH…. and his parasitic family!
Report:
Trump Says He Doesn't Care About the National Debt Because the Crisis Will Hit
After He's Gone
"Trump's alleged comment is
maddening and disheartening,
but at least he's being straightforward about his indefensible
and self-serving neglect. I'll leave you with this reminder of the scope of the problem, not that anyone in power is going to do a damn thing about it."
but at least he's being straightforward about his indefensible
and self-serving neglect. I'll leave you with this reminder of the scope of the problem, not that anyone in power is going to do a damn thing about it."
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MAY 06, 2020
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President Trump said the White
House coronavirus task force "will continue on indefinitely" one
day after Vice President Mike Pence said the
group may dissolve at the end of the month.
Speaking to reporters on Tuesday, Trump said reopening the country is paramount and touted the task force's accomplishments so far “because we can’t close our country down for the next five years,” adding, “We’ve learned a lot.” Similarly, Pence had said discussions about the task force winding down were underway and that the group could be abolished by the end of the month. "The last four Governors teleconference calls have been conclusively strong," Trump said. "We may add or subtract people to it, as appropriate. The Task Force will also be very focused on Vaccines & Therapeutics." |
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After joining with Democrats to
rush trillions out the door to counteract the effects of the pandemic, some
Republicans are now saying that they are back to worrying about deficits —
most prominently, Senate Majority Leader Mitch McConnell.
"We haven't had much discussion about adding $2.7 trillion to the national debt, and the way that could indeed also threaten the future of the country," the Kentucky Republican said in a recent radio appearance. Democrats disagree and are seeking an additional $1 trillion in relief aid for state and local governments. McConnell, though, has said he only wants the federal government to help states with "expenses that are directly related to the coronavirus outbreak,” not wanting to help them ”fix age-old problems that they haven't had the courage to fix in the past,” such as shoring up troubled pension funds. McConnell has even expressed an openness to allowing states to go bankrupt instead of giving them federal relief, a controversial opinion that received pushback from some Republicans. |
Few Debt Critics Remain As U.S. Ramps Up Borrowing to
Aid Economy
5 May 20207
WASHINGTON (AP) — The U.S. government has opened the spigots and
let loose nearly $3 trillion to try to rescue the economy from the coronavirus
outbreak — a river of debt that would have been unthinkable even a few months
ago.
And yet the response, even from people who built careers as
skeptics of federal debt, speaks to the gravity of the crisis: Almost no one
has blinked.
With the U.S. economy in a frightening free-fall, they say, the
government has no choice but to pour trillions into an emergency operation.
Doing less would risk a catastrophe — a recession that could devolve into a
full-fledged depression. And if that were to happen, the government’s fiscal
health would end up far worse.
What’s more, the lessons of World War II and the 2008 financial
crisis suggest to many that a combination of ultra-low interest rates and
eventual economic growth can keep government debts manageable and prevent a budget
crisis.
In a sign that investors worry more about a deep recession than
about whether the government might eventually struggle to repay its escalating
debt, the yield on the benchmark 10-year Treasury note remains well below 1%.
Many analysts say that while soaring federal debt may end up slowing an
eventual recovery, there won’t be any recovery if the government doesn’t borrow
and spend aggressively now.
“Like most folks, I’m not especially concerned about deficit and
debt now,” said Donald Marron, director of the Tax Policy Center, a Washington
think tank. “Interest rates remain low. Immediate health and economic concerns
must take precedence.’’
Nonetheless, the numbers are shocking. After Congress passed
four programs to sustain the economy through the COVID-19 crisis, the budget
deficit — the gap between what the government spends and what it collects in
taxes — will hit a record $3.7 trillion this year, according to the
Congressional Budget Office.
On Monday, the Treasury Department announced that it will borrow
$2.99 trillion in the April-June quarter, blowing away the previous quarterly
record of $569 billion, set in the recession year of 2008, and eclipsing the
$1.28 trillion it borrowed in the bond market in all of 2019. By the time the
budget year ends in September, the government’s debt — its accumulated annual
deficits — will equal 101% of the U.S. gross domestic product, according to the
CBO.
Policymakers are trying to fend off catastrophe. The lockdowns
and travel curbs meant to contain the virus are battering the economy. GDP is
expected to fall at a 40% annual rate from April through June. That would be
the worst quarter on record dating to 1947. Thirty million Americans have
sought unemployment benefits since the virus struck.
Even before the health crisis, the government’s debt to the
public, swollen by President Donald Trump’s 2017 tax cuts, amounted to more
than 80% of GDP, highest level since 1950.
The nation has been here before. In 1946, the year after World
War II ended, federal debt peaked at nearly 109% of GDP. By 1962, the debt
burden had dropped below the 1940 level of 44% of GDP. The surging postwar
economy poured tax revenue into government coffers.
In some ways, things are different now. The economy doesn’t grow
as fast. From 1947 through 1962, the economy averaged a robust, debt-erasing
3.5% annual growth. It’s unlikely to achieve anything that impressive anytime
soon. Since 2010, GDP growth has averaged just 2.3% annually.
Economists have long worried about the consequences of big
government debts. When the government takes on debt, the argument goes, it
competes with private borrowers for loans. It “crowds out’’ private investment,
heightens borrowing rates and threatens growth.
But after the financial crisis, economists began to rethink
their approach to debt. The recovery from the Great Recession, in the United
States and especially in Europe, was sluggish in part because policymakers
declined to juice growth with more debt. The 19 European countries that share
the euro currency slid back into recession in 2011. As their economies slumped,
their debt problems worsened.
In the United States, rates didn’t rise much even as the economy
gradually strengthened. It turns out investors have a near-insatiable appetite
for U.S. Treasurys, given their status as the world’s safest investment. Their
rush to buy Treasurys helped lower the government’s borrowing costs. So did
persistently low inflation.
In such a low-rate, low-inflation environment, the risk of
piling on debt seems more manageable, at least for countries like the United
States and Japan that borrow in their own currencies.
“We can worry much less about the amount of debt than most
economists guessed,” said Douglas Elmendorf, a former CBO director and now dean
of the Harvard Kennedy School who for years has been a critic of runaway
federal debt.
Today’s U.S. policymakers enjoy the support of the Federal
Reserve, which has been flooding the market with cash and keeping borrowing
costs ultra-low. Fed Chairman Jerome Powell took the unusual step at a news
conference last week of imploring Congress not to worry right now about the
risk that its aggressive rescue programs will produce excessive debt.
“I have long time been an advocate for the need for the United
States to return to a sustainable path from a fiscal perspective,” Powell said.
“This is not the time to act on those concerns. This is the time to use the
great fiscal power of the United States to do what we can to support the
economy and try to get through.”
Likewise, Olivier Blanchard, a former chief economist of the
International Monetary Fund, challenged the old consensus on government debt in
a speech last year:
“Put bluntly, public debt may have no fiscal cost… The
probability that the U.S. government can do a debt rollover, that it can issue
debt and achieve a decreasing debt to GDP ratio without ever having to raise
taxes later, is high.’’
Then again, the future might not be like the recent past. Mark
Zandi, chief economist at Moody’s Analytics, said he thinks rates will
eventually start rising as the economy regains health, perhaps in 2022 or 2023.
“There’s going to be a day of reckoning,” Zandi said. “We are
going to as a nation have to address these deficits and debts. We’re going to
have to raise taxes. We’re going to have to restrain spending.’’
But for now, he said, “You have to respond with everything
you’ve got to make sure the economy doesn’t completely fall apart.’’
“The question is not: How much does this cost? But rather: How
much will debt go up if we do this, versus if don’t do this?’’ said Richard
Kogan, senior fellow at the Center on Budget and Policy Priorities and a budget
adviser in the Obama administration.
Bankrupting America
|
Posted:
Apr 08, 2020 12:01 AM
Two weeks
ago, President Donald Trump signed the largest stimulus bill in U.S. history:
more than $2 trillion.
For once,
both Republicans and Democrats agreed. The Senate voted 96-0. The House didn't
even bother with a formal vote.
At the
White House, a reporter asked the president, pointing out that the bill
includes $25 million for the Kennedy Center, "Shouldn't that money be
going to masks?"
"The
Kennedy Center has suffered greatly because nobody can go there," Trump
responded. "They do need some funding. And look -- that was a Democrat
request. That was not my request. But you got to give them something."
"Something"
they got. The bill includes $25 million for Congressional salaries, $50 million
for an Institute of Museum and Library Services and lots of other
wasteful things.
Only a
few politicians were wary. Rep. Thomas Massie complained that he wasn't even
allowed to speak against the bill.
Rep. Alex
Mooney asked: "How do you pay for it? Borrow it from China, borrow it from
Russia? Are we going to print the money?"
Those are
good questions.
Our
national debt is already $24 trillion. Now it will jump, percentage-wise, to
where Greece's debt was shortly before unemployment there hit 27%.
There are
really three options:
1. Raise
taxes.
2. Print
money.
3.
Default.
Let's
consider each:
1.
Raising taxes on rich people is popular. Even Michael Bloomberg wants
"higher taxes on billionaires" like him.
But
raising taxes on the rich often kills the wealth and jobs some rich people
create. And it won't solve our debt problem. Even if we took all the
billionaires' wealth -- reducing their net worth to zero -- it would cover only
an eighth of our debt.
2. Some
on the left now say, "Don't worry about debt, just print money!"
This
belief, called Modern Monetary Theory, destroys lives.
Zimbabwe's
dictator tried it. Eager to spend more money on wars, higher salaries for
government officials and luxury for himself, he had his government print more
money. But that meant more money pursued the same goods. That caused explosive
inflation. Soon, a $2 bag of onions cost $30 million Zimbabwean dollars.
The more
money the government printed, the more inflation there was. They eventually
even issued 100 trillion dollar bills. Today those 100 trillion bills are worth
about 40 cents.
Inflation
wrecked lives in 1920s Germany, Argentina and Russia, and in modern-day
Venezuela, too.
3.
America could simply refuse to pay our debt. But that would betray everyone who
invested in America, and bankrupt Americans who bought Treasury Bonds.
Defaulting
on your debt wrecks economies, too. When Argentina defaulted, unemployment rose
to 21%.
Once
you're deep in debt, no option is good.
How did
we get to this point?
Presidents
have talked about the dangers of debt for decades. But they didn't deal with
it; they just talked about it.
"We
have piled deficit upon deficit, mortgaging our future and our children's
future," warned Ronald Reagan. "We must act today to preserve
tomorrow."
Bill
Clinton said, "We've got to deal with this big long term debt
problem."
Barack
Obama called driving up the national debt "irresponsible" and then
proceeded to do exactly that.
Donald
Trump complained that Obama "doubled" the nation's debt. But now,
under Trump's presidency and the new CARES Act, our debt will grow even faster.
This will
not end well.
So far,
the deficit spending hasn't done enormous harm. But it will. You can stretch a
rubber band only so far, until it breaks.
Our debt
will wreck our children's lives.
Yet,
today politicians mostly talk about spending more.
John
Stossel is author of "Give Me a Break: How I Exposed Hucksters, Cheats,
and Scam Artists and Became the Scourge of the Liberal Media." For other
Creators Syndicate writers and cartoonists, visit www.creators.com.
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