He’s cutting taxes … again. No wait … he isn’t cutting taxes! He’s reversing his trade tariffs. No wait … he isn’t doing that, either! Just what the hell is the fool in the Oval Office doing??? Nobody knows, for sure.
Economists have been predicting that the nation will see another recession before the end of 2020. I am not an economist, but nonetheless put my two cents worth in and say I think it will come by the end of 2019, or at least a harbinger of a recession. Trump has seemingly believed that his house of cards would stand at least through November 3rd, 2020 … election day.
Well, last week there were some warning signs. First, Trump’s latest round of tariffs on imports from China sent retailers into a frenzy, with the holiday shopping season on the horizon, and so as the Dow headed south, Trump postponed those tariffs, and the next day all was well once again. Then, the bond market flashed a warning signal, as the spread between the 2-year Treasury note and 10-year bond inverted for the first time in more than a decade. That has historically presaged a recession, and so once again the market turned southward, losing about 3% last Thursday.
Trump to his base, the only people who believe a word he says, claimed that …
“Our Economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed. The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!”
Oh, wouldn’t it be lovely if the “man” actually had a clue about what he is speaking?
He talks of further tax cuts. Our national debt and budget deficits are both already at a historic high … and he wants to cut revenue even more??? Where the heck is the money going to come from to keep the government functioning, to pay Social Security checks and pay the military and pay for food stamps, Medicare/Medicaid, etc., etc., etc.??? How will the United States pay its loans? Has the “man” no sense of how the economy works, how revenue vs expenses work, how a budget works? Yeah, silly question, isn’t it? He has no concept … he thinks you have to have an ID to buy groceries.
But it gets even better (where ‘better’ means ‘worse’ in the alternative universe). Remember back in May 2016, when Trump was hot on the campaign trail and he made this statement …
“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?”
Oh, my aching head!!! Donnie, Donnie, Donnie … it is NOT that simple! The money that is printed is expected to be backed up with real assets! This is not an effing game of Monopoly but is real world economics!
Printing more money will only exacerbate the problem, yet that is precisely what Trump is proposing to offset the market downturn that he swears doesn’t exist. Or rather, that he believes has been created by his enemy, “the media”.
“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election. The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”
People … sigh … the incumbent does not know what he is doing. He does not understand how global markets work. He does not understand how the economy works. He barely understands how to wipe his patootie. To my republican friends: I beg of you, please study this situation, try to understand what your “hero” is doing to not only this nation, but to the world.
Most presidents are not economists. But then, most presidents hire economic advisors who ARE economists, who DO understand how the world of economics and high finance works, and more importantly, they actually LISTEN to those paid advisors. Trump is convinced that his “gut” (and there is certainly enough of it) is smarter than all the advisors that WE THE PEOPLE are paying, and he listens to nobody. Folks … there is a price to be paid for this folly. We will all pay that price. Think about it.