Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
David Stockman: Forget The FBI, This Is The ‘Real Raiding Party’
By David Stockman as originally published on Contra Corner and reprinted here with permission
While the FBI was raiding the offices of Trump's lawyer yesterday afternoon, the CBO published a blockbuster report evidencing the Donald's own raiding party. To wit, in roughly 90 days of fiscal madness between December and February, Trump and his GOP allies piled $459 billion onto next year's (FY 2019) deficit.
That eruption of red ink consisted of $285 billion for the tax bill and $174 bill
To quote Winston Churchill : ” An Optimist sees opportunity in every difficulty ” . Naturally it is easier to be an optimist if you fall into the top tenth of the top one percent of wealth holders .
One thing about ” kicking the can down the road ” is that : The last kick at the end of the road , by the cliffs edge , is a doozy .
What if? you miss the can? The progression of ugliness is going to kick the living sh*t out of 80% of the planet.
This thesis does not work, because of SO MANY grammatical and spelling errors . E.g.
“we are also confident it will also not make owing the S&P 500 at the top of the greatest bubble yet safe again. ”
Does Stockman really mean ” owing ” or does he really mean ” owning ” ? How does one ” owe ” the SP500 ?
( This article should come with the disclosure that Stockman has been a deficit Cassandra since the first term of the Reagan administration. And.. more importantly …. how unsustainable national debt winds up playing out in history…. namely, the government always winds up repudiating part or all of the debt, and thus all govt. debt is just a form of delayed undeclared stealth income tax on the holders of the bills/notes/bonds…. which makes govt. all the more dependent on the upper income classes who pay the lion’s share of all taxes and hold virtually all the debt. )
There are various ways to default on the debt besides repudiation. They can change the terms (eg., 30-day bills morph into 30-year bonds) and inflate it away (soft default). It doesn’t have to go Stockman’s way who, as you note, has been wrong about the timing for decades. And in trading, if you get the timing wrong, then even if you’re ultimately right you’re still wrong. He’s also clueless about Asia and the “red ponzi”, which like everyone will have its collapses, but about as fleeting as say the deep but relative short-lived US crashes of 1907 or 1921-22 during its rise.
And we’re on track for a recession to start in 2019, so the deficit is going to start showing up as a high % of GDP already as early as next year and even higher in 2020. It’s going to end in big tax increases and big cuts to social security and Medicare someday.
I suspect they believe that a war will somehow help avert a recession, pay for itself and as for deficits well Cheney said Reagan proved deficits don’t matter. The gang that screwed up in the middle east last decade is calling the shots again. Oil & gold are soaring and dollar is crashing.
“But the Trumpite/GOP was having nothing to do with prudence, rationality and the plain old fiscal facts of life. ” … in stark contrast to Obama/Democrat robust support for the Bowles/Simpson commission recommendations … (sarc)