Drudge Retort: The Other Side of the News
Tuesday, October 16, 2018

The sell-off last week was likely just a mild preview of what will happen once the blunt contradictions of Trump's major economic moves -- crazy even by his standards -- set in. "We're [---]," a market analyst friend of mine put it this weekend. "It's all baked in the cake already." You don't have to be a financial expert to see the irreconcilability of these three problems:

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Per the article ...

1. Fed tightening

Under Trump, the Federal Reserve is trying to end a decade-long party. Massive programs of money-printing and low-to-zero-interest rate lending were implemented to keep markets moving after the 2008 disaster.

Terms like "unlimited liquidity" began to catch on to describe the level of central bank support the financial world could expect in the post-crash universe.

2. Trump's tax cuts depend on monster growth

When Republicans rammed through the administration's tax-cut package, more than a few analysts warned that the cuts were based on too-rosy projections of economic growth.

Groups like the Tax Policy Center warned, "Trump's tax cuts would drive new activity at first, but ... the impact would be blunted in later years by rising deficits, forcing more federal borrowing."

3. Trump's tariffs

Here's how dumb Donald Trump is. First, he announces a massive unnecessary tax cut that can only be paid for by unsustainably high growth.

Almost immediately, he has to increase national borrowing to pay for it.

The traditional Treasury note supply goes up right away, but even that's not enough to pay the nut. In fact, this week -- October 16th, to be exact -- the government is going to debut a brand-new two-month Treasury bill, through which it hopes to raise $30-$35 billion immediately.

So we're going to have to sell more and more Treasury notes. On whom do we depend most of all to buy those notes?

That's right: China, which holds about $1.2 trillion in Treasury notes and about $1.5 trillion in U.S. debt overall.


QFT

#1 | Posted by PinchALoaf at 2018-10-15 09:36 PM | Reply | Newsworthy 1

OH crap!!! the economy is deep in deep trouble. We better impeach the traitor and put in a lib dem.

#2 | Posted by Sniper at 2018-10-16 11:39 AM | Reply

#2 it would probably have the better chance of mitigating the problem.

(Have an adult explain what mitigate means)

#3 | Posted by jpw at 2018-10-16 04:00 PM | Reply

OH crap!!! the economy is deep in deep trouble. We better impeach the traitor and put in a lib dem.

#2 | POSTED BY SNIPER

Well, since the economy crashes every time a Republican is in office...and the economy rebounds after a Dem fixes everything... and this has been going on for nearly 40 years now...

Yeah, that's actually a pretty good idea.

#4 | Posted by Sycophant at 2018-10-16 04:08 PM | Reply | Newsworthy 8

If you had $18 trillion in annual income and $1.5 trillion in Chinese debt, would you feel comfortable? The Fed can pay it all off anytime with a computer keystroke. But, if done too fast it would devalue the dollar.

China's enormous industrial base makes it possible to buy Volvo and Hummer and to try to buy Unocal. We must rebuild ours, though it will never have the same mix it once had.

The Republican tax cut is an enormous transfer of wealth from the working class to the idle rich.

There is no reason for the Federal Government to borrow from the private sector. By borrowing from itself instead it would save billions on every public works project.

The Fed is beholding to its private sector stockholders and worries more about inflation than unemployment. Both are their responsibility under their charter, but they only worry about the former because their stockholders (banks) hate it went inflation deflates the value of all their loans. The Fed private construct is unnecessary and serves only old wealth, who just happen to own all the banks. Today they are protected by hundreds of PhD economists that don't know what they're doing, but have unimpeachable credentials.

For tariffs to work, 70,000 manufacturing plants must return to the USA.

Throughout American Capitalism history, every boom has been followed by a bust. Its a great way to further impoverish those without any savings.

We are in a boom, through no fault of Trump. Brace yourself for the next bust.

#5 | Posted by bayviking at 2018-10-16 04:55 PM | Reply | Funny: 1 | Newsworthy 4

OH crap!!! the economy is deep in deep trouble. We better impeach the traitor and put in a lib dem.

#2 | Posted by Sniper

First good idea you've ever had, since the economy does better under dem leadership.

#6 | Posted by SpeakSoftly at 2018-10-16 05:09 PM | Reply | Funny: 1 | Newsworthy 3

Republicans are OUTRAGED about the defecit they caused..

#7 | Posted by MrSilenceDogood at 2018-10-16 07:49 PM | Reply | Newsworthy 4

Nothing says republicl°wnery like this line from the article; a massive unnecessary tax cut that can only be paid for by unsustainably high growth. Almost immediately, he has to increase national borrowing to pay for it.

That is how they do everything.

#8 | Posted by RightisTrite at 2018-10-17 05:47 AM | Reply

"Republicans are OUTRAGED about the defecit they caused.."

Not the leaders of the GOP, they knew exactly what they were doing. The increase in debt was entirely intentional. Basically, their theory is that they were transfering the SS trust fund from us to themselves. It remains to be seen if we will let them get away with the heist. We need to repeal every tax cut going all the way back to Reagan. Make no mistake about it, the Republican leadership is evil and they don't give a crap about their base.

#9 | Posted by danni at 2018-10-17 08:35 AM | Reply

Another thread that Republicans have hidden from at all costs.

#10 | Posted by Sycophant at 2018-10-17 12:11 PM | Reply

First good idea you've ever had, since the economy does better under dem leadership.

#6 | POSTED BY SPEAKSOFTLY AT 2018-10-16 05:09 PM | REPLY | FUNNY: 1 | NEWSWORTHY 2

The record unemployment, GDP growth and stockmarket under Trump? Wow, he must be a Dem.

#11 | Posted by fishpaw at 2018-10-17 04:35 PM | Reply | Newsworthy 1

It's HAPPENING again!!

Is 2017 Set Up For A Financial Crisis? - 01/01/2017 - www.huffingtonpost.com
Next recession will hit during Trump's first two years - May 2, 2017 - www.marketwatch.com
The Great Recession Is Still With Us - DEC 1, 2017 - www.theatlantic.com
Get ready for next crisis - Monday, 17 Jul 2017 - www.thestar.com.my

#12 | Posted by SheepleSchism at 2018-10-17 10:40 PM | Reply

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