King of Debt …

The Commerce Department announced Wednesday that the overall U.S. trade deficit in goods last year soared to an all-time high of $891 billion.  That’s an all-time high … of $891,000,000,000.  That’s the second record Trump has broken in as many months … he must be mighty proud of himself.  But wait … it seems that I recall something he said …

  • “I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN” – 04 December 2018
  • “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!” – 04 April 2018

Now, frankly, although concerning, the trade deficit does not worry me nearly as much as the national debt that rose to a staggering all-time high of $22 trillion last month.  That was the first record he broke.  Between the two, the national debt and the trade deficit, it would appear that Trump’s real goal is to bankrupt the United States of America.  Is this what he meant by “Make America Great Again”?  And worse yet, his blind-faith followers, both in the Congress and among the voters, are still busily applauding him, chanting “Lock her up”, and still waiting for Mexico to pay for the wall that will never be built.tax-cuts-debt.jpgCare to know some of what happens when a nation becomes ‘bankrupt’ and cannot pay its debt?  In part, domestic savers and investors, anticipating a fall in the value of the local currency, will scramble to withdraw their money from bank accounts and move it out of the country. To avoid bank-runs and precipitous currency depreciation, the government may shut down banks and impose capital controls. As punishment for default, capital markets will either impose punitive borrowing rates or refuse to lend at all. And credit-rating agencies will no doubt warn against investing in the country.

mnuchin

Mnuchin … a seedy-looking character

That Donald Trump does not understand economics is obvious, but what’s worse, what is unconscionable, is that he refuses to listen to and learn from those who do understand.  To add insult to injury, Trump’s Secretary of the Treasury is Steve Mnuchin, an investment banker and former hedge-fund manager.  Talk about putting the fox in charge of the hen house!!!

Trump’s ignorance is quite frankly costing us … we the taxpayers, We the People.  Farmers are filing for bankruptcy because Trump’s tariffs have virtually closed the Chinese market for soybeans and damaged exports of milk and pork.  And still, the people are applauding him with their eyes closed and cotton stuffed into their ears.Farm-bankruptcyAnd while our debt increases, while our trade deficits are skyrocketing, while farmers are losing their life savings, Donald Trump wants to spend billions more dollars to build a useless, unneeded wall on our southern border.  As I said … it would seem his goal is to take what he, his family, and his rich cronies can get during his four-year term and destroy the rest.

The biggest cause of the national debt increase is the tax cuts for the very wealthy that were voted into law in December 2017.  If you think of your household budget, it is as if you took a large pay cut, yet still have the same obligations such as mortgage/rent, electricity/gas, car payment, water bill, fuel, food, clothing, etc.  You can see where this just doesn’t work.  Obviously, Trump cannot see, for apparently he either missed out or slept through Econ 101, and has never had to prepare or maintain a household budget.  After all, this is the ‘man’ who thought you had to present identification to buy groceries!

Way back in 2016, when he was campaigning for the office he now holds, he said this:

“People said I want to go and buy debt and default on debt, and I mean, these people are crazy. This is the United States government. First of all, you never have to default because you print the money, I hate to tell you, OK?”

That is reminiscent of the time, when my children were small, and I couldn’t afford to buy my son a toy he wanted.  He said, “But mommy, you have lots of checks!”  Sigh.  It simply doesn’t work that way, as most of us who are thinking individuals realize.  I could understand that lack of comprehension from my 6-year-old son, but not from a ‘man’ aged 72 who is the leader of a nation of some 300 million people!

Perhaps most telling is an incident from 2017 when economic advisors (ones who actually understood economics) were trying to explain to Trump that his policies would ultimately lead to a severe spike in the national debt, and Trump’s response was …

“Yeah, but I won’t be here.”

As long as he can milk it for what it’s worth to him, personally, while he’s in office, he does not care what happens to our economy, our nation, our lives, once he leaves office.  I fear that by the time somebody manages to awaken the republicans, remove their blinders and pull the cotton from their ears, it will be too late to avert a full-fledged depression such as  the one that began in 1929 and lasted for ten years.  milton-friedman

25 thoughts on “King of Debt …

  1. So he’s learning well from the British Tories, is he? Cameron said when voted in that with their cuts “no-one would be left behind”: knife crime is horrendous now. We hear almost every day of another teenager being stabbed. These kids are a lost generation: one half dabbles with gangs and violence the other suffers mental health problems and all because politicians don’t want to pay for enough police, teachers and after school clubs where the youngsters can create a positive vision for themselves. There are hundreds of working parents living in shelters with their children because they can’t afford the rent and the NHS doesn’t have enough nurses and doctors. And I haven’t even mentioned Brexit yet… and it’s a lot of those who suffer the most who vote them in. It’s incredible… 🙋‍♀️🐝

    Liked by 3 people

    • Sigh. Whatever has this world become, my friend? We on this side of the pond are so wrapped up in the ongoing circus that we don’t spend much time thinking about the troubles in other parts of the world, but … the Middle East is headed for yet another Arab Spring, Venezuela and Brazil are in turmoil, India and Pakistan are on the brink of something major if tensions don’t soon cool, Macron in France is proving inept, and you guys have Brexit. I have friends on both sides of the Brexit issue. Those who voted to remain in the EU are very concerned right now about a number of things, such as potential shortages, damage to the economy, etc., while those who voted to leave seem comfortable that the problems will be minimal as long as they don’t leave with a ‘no deal’. Can all these things be resolved without a major catastrophe? I’m not sure.

      Liked by 1 person

    • I know what you mean. It seems I keep writing the same ol’ same ol’, and believe me, I am saying ‘Yuk’ the entire time I’m writing. In all my life, I had never worn the letters off of my keyboard, but now I have worn the lettering off the i, o, l, n from pounding them so hard!

      Liked by 1 person

  2. “I fear that by the time somebody manages to awaken the republicans, remove their blinders and pull the cotton from their ears, it will be too late to avert a full-fledged depression.” Jill, they also need to pull their noses out of trump’s butt.

    Liked by 2 people

    • Exactly! His latest budget proposal is to cut all social programs, cut spending on the environment, increase defense spending, with no increase in taxes. Now, even using ‘creative accounting’, that is a recipe for disaster, but … like you said, he won’t be in office by the time the stuff hits the fan and it will be somebody else’s problem. Like … OURS!

      Liked by 1 person

  3. Jill, good post. The trade deficit does not bother me that much as it reveals we are an importing nation of buyers. The cures are Americans saving more and making greater numbers of quality products here. With the China market slowing, they are investing and buying more homegrown stuff. This impacts the US and EU.

    You are right to worry about the debt, especially since the President does not care and the GOP punted on fiscal responsibility. The Dems need to be more mindful as well.

    By the numbers, the US debt has crossed $22 trillion and is projected to be near $34 trillion in 2027. That is $1.5 trillion more due to the irresponsible tax cut by the GOP in December 2017. To be frank, any dumb ass can do a tax cut. But, we need a combination of spending cuts and tax increases to deal with our debt – the math will not work otherwise and if politicians tells you it will, do not believe them. This is per the counsel of several nonpartisan budget groups, like the Committee for a Responsible Federal Budget, The Concord Coalition and Congressional Budget Office to name three.

    Keith

    Liked by 1 person

    • Thanks Keith! He has no idea what he is doing. Just this morning I read about his proposed 2020 budget that would slash funding for housing, food stamps, medical care, the environment, transportation and housing, while increasing spending on defense. No mention of raising taxes. If the government is not FOR the benefit of the nation’s citizens, then why even bother to have one? Under his plan, the budget would be balanced in 15 years, he says. Half the population under the poverty line would be dead, but so what? His billionaire buddies would be fine and well. His lack of knowledge is killing us! Luckily, his budget doesn’t stand a snowball’s chance of being passed by Congress, as even some republican legislators are up in arms over it, but it speaks volumes about the mentality of this ‘man’.

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