Back again to the Blog. I have been beavering away teaching an online course this semester (it began in late January) and for anyone who thinks that teaching online is easier than face-to-face, I offer my complete disagreement. It is hard work and far more time consuming, but no less fun. I am having a blast.
Since my last post, we have inaugurated a new president here in the States, Donald Trump. I have been watching with fascination the snowflake melt-down on the left and right, and am sad to see my country so divided. Today, I awoke to an interesting piece by Tyler Durden over at Zero Hedge, a page I follow to stay atop financial matters. This piece is disturbing.
And, so, I am worried. Tyler Durden is worried. Here is today’s post:
Former Reagan Administration White House Budget Director David Stockman says financial pain is a mathematical certainty.
Two weeks ago, David Stockman warned that “the market is apparently pricing in a huge Trump stimulus. But if you just look at the real world out there, the only thing that’s going to happen is a fiscal bloodbath and a White House train wreck like never before in U.S. history.” Stockman goes on to exclaim that, when looking at markets, “what’s going on today is complete insanity.”
Now he is back with another interview, this time with Greg Hunter of USA Watchdog in which he again warns that a giant fiscal blood-bath is coming soon. He urges people to pay especially close attention to the March 15, 2017, debt ceiling deadline, at which point everything could “grind to a halt.”
Stockman explains,
“I think we are likely to have more of a fiscal bloodbath rather than fiscal stimulus. Unfortunately for Donald Trump, not only did the public vote the establishment out, they left on his doorstep the inheritance of 30 years of debt build-up and a fiscal policy that’s been really reckless in the extreme. People would like to think he’s the second coming of Ronald Reagan and we are going to have morning in America. Unfortunately, I don’t think it looks that promising because Trump is inheriting a mess that pales into insignificance what we had to deal with in January of 1981 when I joined the Reagan White House as Budget Director.”
So, can the Trump bump in the stock market keep going? Stockman, who wrote a book titled Trumped predicting a Trump victory in 2016, says,
“I don’t think there is a snowball’s chance in the hot place that’s going to happen. This is delusional. This is the greatest suckers’ rally of all time. It is based on pure hopium [Russo’s Note: this word is a blend of hope and opium], and not any analysis at all as what it will take to push through a big tax cut. Donald Trump is in a trap. Today the debt is $20 trillion. It’s 106% of GDP. Trump is inheriting a built-in deficit of $10 trillion over the next decade under current policies that are built in.”
“Yet, he wants more defense spending, not less. He wants drastic sweeping tax cuts for corporations and individuals. He wants to spend more money on border security and law enforcement. He’s going to do more for the veterans. He wants this big trillion-dollar infrastructure program. You put all that together and it is madness. It doesn’t even begin to add up, and it won’t happen when you are struggling with the $10 trillion of debt that’s coming down the pike and the $20 trillion that’s already on the books.”
Then, Stockman drops this bomb and says:
“I think what people are missing is this date: March 15, 2017. That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015 expires. The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. There will not be Obama Care repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”
A complete collapse would please the snowflakes for about 5 minutes, please them that is until their iTunes fail and the ATM doesn’t seem to work any more. I cannot wait to see their reactions.
