Former Reagan Budget Director Predicts Fiscal Bloodbath

Discussion in 'Political Issues' started by czsmithGT, Feb 27, 2017.

  1. czsmithGT

    czsmithGT

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    http://www.zerohedge.com/news/2017-02-26/stockman-after-march-15-everything-will-grind-halt

    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’s 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 15th 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. That holiday 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.”
     
  2. PhotoFeller

    PhotoFeller A swamp dude

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    They will increase the debt ceiling with the commitment to 'figure it all out later'.
     

  3. First shot

    First shot

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    That's what they've been doing for years. Somethings gotta give. Being no financial wizard, I don't know what it will be. What I do know, is that in the 8 years of President Obama, my income in the residential construction field, dropped 35%. Have any federal workers had that happen? If so, I'd like to hear from them.
     
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  4. PhotoFeller

    PhotoFeller A swamp dude

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    I just don't see Trump abandoning his campaign promises, including tax cuts for citizens and businesses. If his promises go unfulfilled, and if tax increases are imposed, he'll be another 1-term president like GHW Bush.
     
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  5. TF2Addict

    TF2Addict

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    Correct me if I'm wrong but Stockman has been doom and gloom for years and years. Eventually something has to give (or one would think so) but I don't think it's right around the corner.
     
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  6. TF2Addict

    TF2Addict

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    Trump also has promised to balance the budget and decrease the debt. Is anyone going to hold him to those promises?
     
  7. aircarver

    aircarver Descent Terminated Silver Member

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    Damned if he does ...
    The pain resultant from fixing this is problematic with the country on the brink of civil war ...

    Damned if he doesn't ...
    Even the world's biggest economy can't live forever off its' credit card ..
    Trouble is- no one can foresee how how or how fast the crash will come, but it will be a booger ! ... :wow:
     
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  8. Robgmn

    Robgmn

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    Was your company crushed by the crash prior to Obama?
    New housing starts have been climbing ever since 2009 (261% between 2009 and 2016).
    SOMEONE's gotta' be making some money.
     
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  9. jeanderson

    jeanderson Making America great again! Platinum Member

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    Longer term, yes the debt is a real problem. But two issues I have with what Stockman says:

    "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."
    How is this different than any other debt ceiling? Congress passes another law that allows the ceiling to be raised. Done. I don't like it at all, but there's no "crisis" here (at least not this year).

    "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’s madness."
    Tax cuts are not a zero-sum game. Cutting taxes will fuel economic growth that has the potential to negate any cuts in actual revenue. Further, if they give corporations a one-time reduced tax rate on capital overseas moved back here, the tax revenue windfall will be huge.
     
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  10. Paul7

    Paul7

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    You're measuring from the depth of the recession, which was caused primarily by Democrats basically making if illegal for banks to properly evaluate home loans, all in the name of 'fairness'. Don't tell me you want to defend the pathetic economic record of Obama, the only POTUS never to have even one year of 3% growth, the guy who grew the deficit more than all other presidents combined, with nothing to show for it?
     
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  11. Iamaarmed

    Iamaarmed

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    Housing starts can be very misleading as: Estimates of housing starts include units in structures being totally rebuilt on an existing foundation. (Which means not much more than remodeling of old structures and replacements not new starts as the term indicates.)
     
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  12. Robgmn

    Robgmn

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    No, I was strictly speaking to the claimed 35% reduction in housing construction income during a timeframe when housing starts increased 261%.

    If there is MORE construction, then the income should not be going DOWN.

    And you may want to do a little reading on the cause of the housing bubble. It was NOT due to "democrats making it illegal to properly evaluate a home loan". If anything, DEregualtion was a contributing factor (amongst MANY others), such as the bipartisan approval of the Gramm-Leach-Bliley Act.
    Blaming any political party for the housing bubble is akin to blaming Bill Gates when the video card on your computer fails.
    It's silly.
     
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  13. Robgmn

    Robgmn

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    So if it gets rebuilt on an existing foundation, the construction companies don't make any money on it?
    Sign me up!
     
  14. First shot

    First shot

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    Yes we, a small company, got smacked in late 2007. These new starts didn't happen in central Va, where there was a housing market glut. In the past few years, it's the national pre-fab housing builders that are throwing houses up with all Hispanic labor. All that's left is remodeling and renovation, that's being fought over in bidding wars between contractors that survived.
     
  15. First shot

    First shot

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    Also Robgmn, the 261% increase IMO, is not trustworthy. Plus it's regional. Up in D.C. construction is booming, but it's all linked to government. I'm thinking of retirement anyway, but that only solves the problem for me. A friend in Austin Tx, said there's quite a bit being built there. Hope that helps explain something.
     
  16. Robgmn

    Robgmn

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    Do you find the concept untrustworthy, or just the number for the timeframe?
     
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  17. Paul7

    Paul7

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    Nonsense, Clinton and Carter had their fingers in this as well, see the Community Reinvestment Act. And Obama's buddies at ACORN were suing lenders for racism who didn't want to lend to unqualified borrowers.

    Bush tried to rein in this problem, but was opposed by congressional Democrats. See http://www.nytimes.com/2003/09/11/b...ed-to-oversee-freddie-mac-and-fannie-mae.html

    "Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

    ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

    Representative Melvin L. Watt, Democrat of North Carolina, agreed.

    ''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said."
     
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  18. nursetim

    nursetim

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    I have the vague notion that if they taxed everyone, man, woman, and child, and pet, 100%, we would still be in debt. Is Trump the unlucky one to be caught standing in this economic musical chairs, or rather Russian roulette?
     
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  19. Robgmn

    Robgmn

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    Have you ever read anything about the economy? Taking Trump's claim as true is shortsighted, since it is a one-year example.
    It's like saying that since the market tanked when the DotCom Bubble burst, that it has never done well in it's history.

    For a bad economic track record, look to Bush Jr.
    Bush Jr. was the worst since Hoover. Except for debt vs. GDP (the one indicator where you don't WANT to beat the average), any chart you graph of economic indicators during his reign shows underperformance versus the averages since 1953.
    Those are actual, factual numbers.

    Change In Real GDP
    [​IMG]

    Change In Private Sector Jobs
    [​IMG]

    Change In Real Median Family Income
    [​IMG]

    S&P 500
    [​IMG]

    Debt vs. GDP
    [​IMG]



    Under Obama, a terrible economy became a "meh" economy.
    Under Bush, a terrible economy became a REALLY terrible economy.

    My prayer is that a "meh" economy doesn't revert to "terrible" under Trump.
    An initial promise to reduce income while increasing expenditures does not give me a warm and fuzzy feeling, however. I don't see where giving someone a $1,000 tax cut can generate anything LESS than $1,000 in tax revenues. It's just not economically possible.

    It's like saying "I'm going to hire myself to build a house for me, and I'll pay me a million dollars. I'll be rich!".
    Uhhh, if you've got the million, you're already "rich".


    PS Hey Paul7: look up the word "bipartisan". It may surprise you.
     
    Last edited: Feb 27, 2017
  20. Paul7

    Paul7

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    I'll ignore your dumb question, and ask if you really want to defend this?

    http://www.nationalreview.com/article/435093/barack-obama-economy-jobs-ugly-truth

    Real median family income down, poverty rates up, people on food stamps up almost 40%, labor non-participation rate at record high, etc.

    I didn't mention Trump.

    Huh?

    I would say the opposite, under Bush is was a "meh" economy and REALLY terrible under Obama. Despite the dotcom bust and 9/11, the economy grew at an about average rate until 2007 with the housing bubble bust. Bush had something like 55 straight months of economic growth. Inflation adjusted GDP grew an average of 3.8% with Bush compared to 2.5% under Obama. Bush had two years of 3%+ growth, Obama 0.

    BTW, Bush isn't my political hero, but he damaged the economy much less than Obama, just wait til Obamacare collapses and the day of reckoning comes for Obama's ginormous deficit.

    So far the stock market seems to prefer Trump's approach.

    Tax cuts both under JFK and Reagan increased revenue, conversely, tax hikes often decrease revenue. After Reagan's cuts, federal tax receipts doubled. That's not supposed to happen, at least if you're a liberal.
     
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