The Fiscal Responsibility of Republican Governance. And Other FairyTales

[peggysue2]

Remember when the US Debt and Deficit were the rallying cry of the GOP? When President Obama was accused of racking up more debt than any other president in the history of mankind? This was, of course, after the Republican Party managed to wreck the US Economy, ushering in the ‘Great Recession” of 2007-2008.

Good Times!

While Paul Ryan touts the sheer delight of a secretary finding $1.50 more in her paycheck, Steve Mnuchin has indicated that the country is running out of revenue earlier than expected. He and his financial wizards have advised that the debt ceiling be raised no later than early March because the accounting sleight-of-hand to keep the lights on will have puttered out by then.

But why? The Trumpster has hailed the economy robust, the massive tax cuts as an engine of growth and prosperity. And, and, and . . . the stock market, which unfortunately fell off a cliff on Friday.

The fact that starting in February, the US government will be bringing in $10-15 billion less in revenue each month just might be, could be, whatta think guys the reason for the need to borrow more money to pay the bills.

How much money?

Last Monday, the Treasury Department said they estimated $441 billion dollars would be needed for this quarter. This would be the largest sum of debt requested since 2010, right about the time President Obama was attempting to drag the country from a financial ditch, the steepest since the Great Depression.

Btw, the Republicans sold this piece of reckless financial voodoo on the basis of a 3% annual growth rate. The CBO is projecting a 2.3% growth rate this quarter. If we’re lucky. Because there are also whispers of a housing collapse in the near future, over-exuberant 401K borrowing and other disturbing credit level spending that eerily sounds like the . . . good ole days.

Did I mention the stock market fell off the cliff Friday? I mention this primarily because the Trumpster has been beating his chest over stock market gains. Strange I haven’t heard a word about the stock dive on Friday, presumably brought on by the fear of inflation and increased interest rates.

For all the whooping and hollering, the tax cuts were in service to corporations and Republican donors. These donors have now turned on the funding spigots for their GOP lackeys. While Paul Ryan headlined the delighted secretary (he has since removed that tweet), he failed to tell his giggly constituent that he received $500,000 in campaign funds from Charles and Elizabeth Koch. Mere days after the the tax bill passed.

Coincidence?

Only if you believe Steve Mnuchin’s claim that the country’s lack of revenue has nothing, nada, zip to do with the tax bill giveaway of 2017. If that’s the case, I’ll tell you about Sam Brownback and how he saved the State of Kansas with his fantastical economic policies.

Yup, there’s an entire collection of Grimm Fairytales related to Republican Trickle-Down theory. We’re living inside one of those chapters right now.


https://www.nytimes.com/2018/01/31/us/politics/united-states-debt-limit.html

https://www.snopes.com/kochs-contributed-ryan-after-tax/

https://www.washingtonpost.com/opinions/trickle-down-economics-is-a-nightmare-kansas-proved-it/2017/06/12/c2d7aae0-4fa6-11e7-91eb-9611861a988f_story.html?utm_term=.db24c98d484f

[lapfog_1]

1. this is what I've been saying for almost a week

tax cuts -> less revenue -> more borrowing -> increased yields on bonds -> less future corporate profits -> stock market correction (or worse)

[peggysue2]

3. It's the 'or worse" . . .

that should be of concern for everyone. Because it's not as if we haven't been here before.

[lindysalsagal]

2. and then some other fairy tales:

1. Religious "freedom." They legislatively impose their religion on everyone else.
2. Homeland "Security." We piss off everyone abroad and are left without allies.
3. Personal civil "freedoms" : only if you're white, male, straight, and christian.
4. "Pro-life". But anti eating, ageing, medical care, education, public transportation, employment.
5. "Prolife" but pro-unlimited gun deaths.
6. "Pro-life" but insist on for-profit medical care, even when it bankrupts hospitals.

[peggysue2]

5. Yes!

The newly distributed volume of Grimm Fairytales is multi-chaptered and is not recommended for the feint of heart.

Not for those who value civil liberties and security either. It does, however, make the case for resistance all the more clear.

Here's to massive Democratic victories in 2018!

[DetlefK]

4. By pure coincidence, experts have been predicting a stock-market downturn for 2018 for months now.

Right now, everybody is investing in A-list companies only, because they are stable and people are still carefull, 10 years after the recession.

The experts expect that banks will shift their investments from A-list companies to all kinds of companies in general in 2018. This will cause the stock-market to go down, even though the money is just shifted around from the A-listers to B-listers and C-listers.

[peggysue2]

6. The fact that banks . . .

are ready to take on more risk, doesn't make me feel any better. Again, shades of 2007-2008.

It's the small investor, those whose pensions are tied to the stock market after defined pensions went the way of the horse and buggy, that really concerns me. I read an article last week of people diving into 401k's, taking the penalty to buy property and/or vacations. The one woman had $130,000 in her account that went to $400,000. On paper, of course. Still, she drew down $50,000 for home improvements and vaca time. That's a path headed for financial ruin.

We should have learned. But we never seem to regardless of the warning signs. Personal debt is up. Students are still reeling from university borrowing. The housing market is wa-a-y overpriced and ordinary people have been jumping into the market because . . . they've seen the astronomical gains and want a piece.

And then, we have the Treasury Department running out of funding earlier than expected for quarterly expenses because of a massive tax give-away. Which, of course, they're loathe to admit.

None of this news makes me feel confident.