Drudge Retort: The Other Side of the News
Saturday, February 10, 2018

he White House is preparing to release a budget Monday that will not balance, according to a person familiar with the document, reversing the administration's previous stance and casting aside a point of pride for conservatives. The shift away from a balanced budget occurred even before President Donald Trump signed into law Friday morning the massive $320 billion spending deal hashed out between Republicans and Democrats on Capitol Hill. In the original version of the budget, which was completed in mid-January, lower federal revenues due to steep tax cuts, combined with higher mandatory spending on entitlement programs, resulted in deficits throughout the next decade, according to the source.

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The new bipartisan spending deal from Congress only exacerbates the problem. According to the Center for a Responsible Federal Budget, deficits will top $1 trillion next year under that agreement and could reach $2.1 trillion by 2027 if it becomes permanent and U.S. interest payments rise.

A senior official at the Office of Management and Budget said earlier Friday that Monday's proposal will reflect the new spending limits. The White House budget will also include a "road map" for offsetting the growth in spending "in a responsible manner," the official said.

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Both parties are terrible, but Republicans Suck Way WAY more.

The American Society of Civil Engineers estimate that it would take $2 trillion dollars to fix our crappy infrastructure.

But we just gave $2 trillion in GOP tax cuts to billionaire owned corporations that were already making record profits.

Now more deficit spending.

Not very bright, people.

I blame Republicans and their dumbass voters.

#1 | Posted by PinchALoaf at 2018-02-09 03:57 PM | Reply | Newsworthy 2

Pinch, I remember when there were Dems who were actual conservatives, fiscal and otherwise. And I remember when there were Repubs of the same stripe. Where are they now? Only a handful of R's even mentions fiscal responsibility but their voting record is far too much like the big-trough-spenders in Congress.

#2 | Posted by AKat at 2018-02-09 05:00 PM | Reply

"Dems who were actual conservatives, fiscal and otherwise"

Single Payer is a conservative idea, fiscal and otherwise.

The Democrat Party doesn't support it but a lot of Democrats do, and very, very few Republicans do. I don't think there's a Republican here who supports it.

#3 | Posted by snoofy at 2018-02-09 05:22 PM | Reply | Newsworthy 1

Trillions in debt isn't a big deal when the 1% don't have to sacrifice or pay for it.

#4 | Posted by Derek_Wildstar at 2018-02-09 07:30 PM | Reply | Newsworthy 2

Trillion dollar deficit, let's have a parade!

#5 | Posted by snoofy at 2018-02-09 07:42 PM | Reply | Funny: 2

unrecoverablity, it's the Right's plan.

#6 | Posted by ichiro at 2018-02-10 12:41 AM | Reply

"unrecoverablity, it's the Right's plan."

A fair number of Trump supporters, and a few others, seem to think a Great Cleansing wouldn't be such a bad thing.

#7 | Posted by snoofy at 2018-02-10 01:16 AM | Reply | Newsworthy 1

More tax cuts are needed.;-)

#8 | Posted by bat4255 at 2018-02-10 08:18 PM | Reply

. According to the Center for a Responsible Federal Budget, deficits will top $1 trillion next year

More winning from the bankruptcy-prone dotard.

#9 | Posted by reinheitsgebot at 2018-02-10 08:33 PM | Reply

Funny how deficits only matter when Democrat is in the White House.

#10 | Posted by morris at 2018-02-11 12:35 AM | Reply | Newsworthy 1

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There will be much hand wringing and gnashing of teeth as the republicans tell us we must make hard choices when the truth is the only responsible choice is to raise taxes back to levels where our government could pay its bills. The economy grew the best when tax rates were much higher

#11 | Posted by hatter5183 at 2018-02-11 01:37 AM | Reply | Newsworthy 1

Repubs during Obama (pulling hair out and self-flaggelating and weeping);

'OMG, the deficit is out of control, we may all be consumed by self-righteous fire if something is not done about this deficit'

Repubs during Trump (rubbing themselves over the exquisite joy they feel);

'Deficits don't matter. Debts don't matter. All that matters is for the richest people to be able to get richer. No, no, I'm not rich, but I will be, just as soon as those rich people start throwing their money away. Oh yes, it will happen....just you wait and see ... no, not yet, just wait a little while longer ... it's never happened before, but it will this time ... it's coming, I can FEEL it .... oh yes, it is coming ... I can feel the trickle...

#12 | Posted by kudzu at 2018-02-11 09:38 AM | Reply | Newsworthy 2

People forget sometimes, the money is not real until you try to use it to buy something. There is no economic principle that says you cannot mint a twenty-three trillion dollar coin and pay off the national debt.

#13 | Posted by john47 at 2018-02-11 09:56 AM | Reply

Let's have a parade sponsored by Visa!

#14 | Posted by danni at 2018-02-11 10:10 AM | Reply | Funny: 2

#7 yeah, well, ...define cleansing.

#15 | Posted by ichiro at 2018-02-11 03:18 PM | Reply

the King of Debt, loves and lives for more debt. will he use the nuclear option? he is the nuclear option.

#16 | Posted by ichiro at 2018-02-11 03:25 PM | Reply

Trillion dollar deficit, let's have a parade!

#5 | POSTED BY SNOOFY

I don't care who you are but that is funny as hell!

😆 😂 🤭🤮🤧😁

#17 | Posted by donnerboy at 2018-02-11 04:09 PM | Reply

There will be much hand wringing and gnashing of teeth as the republicans tell us we must make hard choices when the truth is the only responsible choice is to raise taxes back to levels where our government could pay its bills. The economy grew the best when tax rates were much higher

#11 | Posted by hatter5183 at 2018-02-11 01:37 AM | Reply | Flag

They are going to come out and call for cuts to social security, medicare and medicaid. That has been their goal all around.

Now Lil Marco and Daddy's girl have been going around pushing a plan for the US to pay for family leave by drawing down on social security benefits.

www.washingtonpost.com

"Consider the paid parental leave plan teased in President Trump's State of the Union address, which has now gained traction with Sen. Marco Rubio (R-Fla.) and Ivanka Trump. The plan, described as "a budget-neutral approach to parental leave" by advocates, would allow parents to draw from their Social Security benefits early to fund their parental leave, then require them to delay the collection of retirement benefits by some yet-to-be-calculated period of time. "

To the GOP, the poor are not entitled to retirement and health care. This back door attack on social security is a first step towards that. By doing this, they are changing peoples mind that social security is untouchable by dangling a big fat carrot in their face. Once people get used to that it will be easier to get rid of the program altogether.

This will only worsen the coming retirement savings crisis.

#18 | Posted by 726 at 2018-02-12 07:05 AM | Reply | Newsworthy 1

""Consider the paid parental leave plan teased in President Trump's State of the Union address, which has now gained traction with Sen. Marco Rubio (R-Fla.) and Ivanka Trump."

That pretentious rich bitch is going to plan parental leave for average Americans, it's just disgusting. Why not have Marie Antoinette plan out how the little people should get benefits like parental leave, she would know as much about life for the average woman as whould Ivanka. What a pile of crap! F Ivanka Trump, this is insulting to American women. Go shopping Ivanka, you have no basis for planning any policies at all.

#19 | Posted by danni at 2018-02-12 07:19 AM | Reply | Newsworthy 3

I am longing to see conservatives of BOTH parties riding in tumbrels on the way to the new Chop-Chop Square on the National Mall. It is my favorite dream these days, and it makes me want to get up, shower, shave, and get dressed every day! I want to be sitting in the front row, next to madame Therese Dafarge, as she knits! Death to the Aristos! Eat the riches.

#20 | Posted by john47 at 2018-02-12 07:53 AM | Reply

This country is on a path toward bankruptcy.

#21 | Posted by JeffJ at 2018-02-12 08:28 AM | Reply

Only in your dreams snowflake.

#22 | Posted by Sniper at 2018-02-12 12:16 PM | Reply | Funny: 1

"This country is on a path toward bankruptcy."

It's part of Trump's master plan:

Donald Trump just threatened to cause an unprecedented global financial crisis

In an interview Thursday on CNBC, Donald Trump broke with tired clichés about the evils of federal debt accumulation. "I am the king of debt," he said. "I love debt. I love playing with it."

But he replaced fearmongering about debt with an even more alarming notion -- a bankruptcy of the United States federal government that would incinerate the world economy.

"I would borrow, knowing that if the economy crashed, you could make a deal," Trump said. "And if the economy was good, it was good. So therefore, you can't lose."

www.cnbc.com

#23 | Posted by Gal_Tuesday at 2018-02-12 01:55 PM | Reply

Wall Street: Trump's debt policy smacks of bankruptcy

His vow to 'make a deal' with creditors would undermine U.S. economy, bankers say.

Of course he would never allow the U.S. to default. Anyone who suggested such a thing must be "crazy." What Trump meant to say was that if interest rates rise he would consider buying back existing U.S. debt at a lower prices. As interest rates rise, the price of existing debt goes down.

"In other words, we can buy back debt at a discount. People said I wanted to go and buy debt and default on debt, these people are crazy," Trump said.

But then he landed himself right back in the soup.

"This is the United States government," Trump said. "First of all, you never have to default because you print the money, I hate to tell you."

www.politico.com

#24 | Posted by Gal_Tuesday at 2018-02-12 01:59 PM | Reply

#22 | POSTED BY SNIPER

Your p***y traitor in chief is incapable of anything but bankruptcies. Did you really not see this one coming?

#25 | Posted by IndianaJones at 2018-02-12 02:01 PM | Reply

I hope his idiot base realizes that when Trump causes a debt crash their veterans pensions will be cut as well as SS.

#26 | Posted by bored at 2018-02-12 02:11 PM | Reply

#24

I know that this will cause the Usual Suspects to accuse me of supporting Trump, but most of what he said is correct and we did a lot of it during the Obama administration:

What Trump meant to say was that if interest rates rise he would consider buying back existing U.S. debt at a lower prices. As interest rates rise, the price of existing debt goes down.

"In other words, we can buy back debt at a discount. People said I wanted to go and buy debt and default on debt, these people are crazy," Trump said.

It's called monetizing the debt, and the Fed does it all the time:

A nation monetizes its debt when it converts debt to credit or cash. It frees up capital that's locked in the debt and puts it into circulation. The only way it can do this is with its central bank. The central bank purchases the government debt and replaces it with credit. The bank puts the debt on its balance sheet. It creates the credit out of thin air. A central bank is the only bank that can legally do this.
"This is the United States government," Trump said. "First of all, you never have to default because you print the money, I hate to tell you."

This one he is only partially correct, no money is printed but the Fed credits are basically the same, even though no money is printed:

The Federal Reserve monetizes the U.S. debt when it buys U.S. Treasury bills, bonds and notes. When the Federal Reserve purchases these Treasurys, it doesn't have to print money to do so. It issues credit to the Federal Reserve member banks that hold the Treasurys. It then puts the Treasurys on its own balance sheet. It does this through an office at the Federal Reserve Bank of New York. Everyone treats the credit just like money, even though the Fed doesn't print cold hard cash.

How does this monetize the debt? When the U.S. government auctions Treasurys, it's borrowing from all Treasury buyers. These include individuals, corporations and foreign governments. The Fed turns this debt into money by removing those Treasurys from circulation.

Decreasing the supply of Treasurys makes the remaining bonds more valuable.

These higher-value Treasurys don't have to pay as much in interest to get buyers. This lower yield drives down interest rates on the U.S. debt. Lower interest rates mean the government doesn't have to spend as much to pay off its loans. That's money it can use for other programs.

It is as if the Treasurys bought by the Fed didn't exist. But they do exist on the Fed's balance sheet. Technically, the Treasury must pay the Fed back one day. Until then, the Fed has given the federal government more money to spend. That increases the money supply, thus monetizing the debt.

Lump this in with Quantitative Easing ("QE") and the Fed is basically "printing money:
Most people didn't worry about the Fed monetizing the debt until the 2008 recession. That's because until then, open market operations weren't large purchases. Between November 2010 and June 2011, the Fed bought $600 billion of longer-term Treasurys. That was the first phase of Quantitative Easing, known as QE1.

There were four phases of the QE program that lasted until October 2014. The Fed ended up with $4.5 trillion in Treasurys and mortgage-backed securities on its balance sheet.

On June 14, 2017, the Fed said it would reduce its holdings so gradually it wouldn't need to sell them.

Once the fed funds rate reaches its target of 2.0 percent, the Fed would allow $6 billion of Treasurys to mature without replacing them. Each month it would allow an additional $6 billion to mature. Its goal is to retire $30 billion a month.

#27 | Posted by Rightocenter at 2018-02-12 02:15 PM | Reply

You're welcome.

#28 | Posted by Rightocenter at 2018-02-12 02:16 PM | Reply

#27 & 28 Did you read the article I linked to? Apparently not:

That comment -- that the U.S. can simply pay back its trillions of dollars in debt by printing a ton more money -- drove Wall Street crazy again and prompted a conference call from top Democrats to rip Trump as completely unglued on the economy.

Trump is not exactly wrong on either front. The U.S. can and does buy back existing debt and replace it with cheaper debt. But Trump's initial comments certainly sounded more like negotiating with creditors, as one does in a bankruptcy proceeding, to accept less than they are owed, something Wall Street associates with places like Puerto Rico, Argentina and Greece and not with the United States of America, which has a triple-A credit rating and maintains the world's reserve currency.

And the Federal Reserve can and does "print" money in massive amounts and can do so in ways that make existing debt burdens -- both for individuals and the government -- less onerous. But presidents, Treasury secretaries and Federal Reserve chairs would never go out and say they plan to create inflation to deal with the debt.

#29 | Posted by Gal_Tuesday at 2018-02-12 02:24 PM | Reply

The article then goes on to talk about objections to Trump's comments by Wall Street analysts:

To do so could dramatically change the way investors view the U.S. and cause rates to skyrocket. And other nations that have tried to inflate their way out of debt have often failed spectacularly.

"If there is ever an example of how dumb it is to print money to handle debt, I'm in a country which has had to learn that the hard way more than once," said David Kotok, chief investment officer at Cumberland Advisors, speaking from a conference in Argentina. "It's a stupid idea. You don't discharge debt, especially U.S. dollar debt, by printing money. You do print money to create liquidity for banking systems in trouble, but you don't print money to cheapen your debt which is the reserve currency of the world."

Other Wall Street analysts said while the basic concepts Trump highlighted -- buybacks and money printing -- are common, the fact that they came from a presidential candidate was shocking.

"We've basically renegotiated existing debt in the past and we certainly do print money," said Jim Paulsen, chief investment officer at Wells Capital. "These concepts are far from odd. But to say them as a presidential candidate is what is so striking to me and frightening. For a president to say these kinds of things publicly would have the opposite effect you would want in that they would put the economy into recession."

and so on.

#30 | Posted by Gal_Tuesday at 2018-02-12 02:27 PM | Reply

I read it (I always do), but obviously most people don't understand how debt gets monetized, which is what what he was hamhandedly, as is his MO, discussing, as was your excerpt in the article.

#31 | Posted by Rightocenter at 2018-02-12 02:28 PM | Reply

"which is what what he was hamhandedly, as is his MO, discussing, as was your excerpt in the article."

Maybe but some folks weren't so sure he knew what he was talking about (it wouldn't have been the first time he spouted off something that demonstrated his ignorance on some policy or another) :

"This is yet another big misstep. What he is implying is the era of Fed independence is over," said Douglas Holtz-Eakin, president of the American Action Forum and a former official under President George W. Bush. "I no longer know what Trump does and doesn't know about managing the debt, but I'm pretty sure I don't trust his judgment. I also worry about the international community watching this daily. They have reason to be nervous about him."

Holtz-Eakin added that he would recommend Trump refrain from this kind of commentary until he can spend more time learning about the subject. "If I were advising him I'd say let's take a day or two off of this and talk about beauty pageants or something else you know about because this has got to stop."

#32 | Posted by Gal_Tuesday at 2018-02-12 02:33 PM | Reply

"brought to you by Carl's Jr."

#33 | Posted by lfthndthrds at 2018-02-12 02:34 PM | Reply

#32

I don't disagree with Holtz-Eakin, but we all know that Trump's misstatements and tweets are a burgeoning industry for the pundit business.

Trump's idiocy in making this statement notwithstanding, the Fed will not print money to retire debt, they will continue to monetize it, I just hope that a new round of QE doesn't commence since I think that is fairly dangerous from an inflation standpoint. Trump isn't going to dictate Fed policy, so all the teeth gnashing and hand waiving over this particular issue, while entertaining, is mostly a waste of time.

#34 | Posted by Rightocenter at 2018-02-12 03:46 PM | Reply

I read it (I always do), but obviously most people don't understand how debt gets monetized, which is what what he was hamhandedly, as is his MO, discussing, as was your excerpt in the article.

#31 | POSTED BY RIGHTOCENTER

"How debt gets monetized"?

I understand it perfectly -- debt is debt, and it always needs to be paid off.

You're engaging in financial-bean-counting doublespeak.

Nice try with the bait and switch.

#35 | Posted by PinchALoaf at 2018-02-13 02:11 AM | Reply

"but obviously most people don't understand how debt gets monetized"

Go on...

#36 | Posted by snoofy at 2018-02-13 02:25 AM | Reply

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