Donald Trump is pretty sure that the invisible, indestructible, vibranium, 2,000-mile-long monument to xenophobia he wants so desperately to build along the southern border will “pay for itself.”
Of course the original pitch was that it didn’t need to “pay for itself” because Mexico was going to pay for it, but as it turns out, Vincente Fox was entirely correct when he told Trump, via a series of hilarious video messages posted on social media, “we are not payin’ for that fucken’ wall.”
With Fox’s contention having been thusly borne out over the last two years, Trump is left to defend his “Mexico will pay for it” fairy tale by saying things like this (from angry remarks he delivered to reporters on Thursday):
Got that? “Obviously” he “never meant” Mexico was “going to write out a check.”
Sorry, but that’s exactly, 100% what he meant and what’s happened since the campaign is that it’s dawned on Trump that he cannot compel another country to fund a multi-billion dollar infrastructure project unless he wants to just invade said country and plunder their reserves. So now, you get belabored attempts to explain how Mexico is de facto “paying for it” via the trade deal or via some other convoluted logic like that which Trump rolled out during his Oval Office speech when he said this:
The border wall would very quickly pay for itself. The cost of illegal drugs exceeds $500 billion a year. Vastly more than the $5.7 billion we have requested from Congress.
Sadly, that will go over well with his supporters. Something like this: “Illegal drugs cost 100 times more than what Trump wants for the wall!” And while someone has undoubtedly attempted to “explain” what Trump actually meant, taken at face value it makes absolutely no sense unless you want to suggest that the government’s plan is to shut down the Mexican drug trade and then step in to fill the void with its own dope-running business, the proceeds from which will dwarf what we spent on the wall.
You get the idea. This is insane, but it’s also hilarious to watch Trump have to reconcile the fact (because that’s what it is) that if this thing ever does get built, it will be U.S. taxpayers who foot the bill, not Mexico and not anybody else.
In the meantime, the government remains shut and amusingly (or not, depending on how you want to look at it), the cost of that shutdown will actually exceed the cost of the wall within two weeks.
That’s according to S&P, who notes that what is now the second-longest government shutdown in US history will lop some $1.2 billion off real GDP for every week it persists, which means we’re just two weeks away from this farce costing more than the $5.7 billion Trump wants for his invisible “steel slats”.
You could look at that and say it argues for just giving Trump his damn money in the interest of putting the brakes on this insanity which looks set to exacerbate a nascent deceleration in the U.S. economy. But what kind of precedent does that set? Does that mean that any time he wants something he can just shut the government and point to how much it’s costing the economy to justify his demands? If so, how will that go over with Republicans if/when a Democrat president uses the same strategy?
Meanwhile, analysts are busy trying to quantify all of the second order effects.
“In 2013, when over 800k workers were furloughed for 17 days, the BEA estimated that the shutdown reduced real GDP growth by 0.3pp, meaning approximately a 0.1pp drag on growth per week that the full government is shut down”, BofAML writes, in a new note, adding that if you “use this rule of thumb, given that about 380k workers have been furloughed (about half that in 2013), the current shutdown has been a drag of 0.1-0.2pp on growth [which] led us to revise down our 4Q GDP tracking estimate to 2.8% from 2.9%.”
But that’s just the mechanical effect. Here’s what the bank has to say about the knock-on effects:
There will also be indirect impacts felt from disruptions in consumption and business spending. Unpaid workers, both public and private, could delay spending, temporarily reducing PCE, and potential delays in tax refunds could further curb consumption, especially for low-income households who rely on the extra income for day-to-day spending. Also, a sustained shutdown into March may lead to cuts in food stamp benefits. Additional drag could be felt if the shutdown generates uncertainty shocks in the economy leading to a decline in business and consumer sentiment and/or a decline in US equity markets.
And all of this for what? Border “security”? Most assuredly not. There is no “crisis” and there is no “national emergency”. This is a complete and total fabrication and you can be absolutely sure that Trump knows it. This is about vanity for him, and also about manufacturing crisis after crisis in order to make it appear, to his supporters, that he’s still “fighting the good fight”, so to speak.
There is nothing “good” about this fight. Again: taxpayers are being extorted for money earmarked for what will, if by some miracle he manages to build it, go down in history as one of the most ill-conceived boondoggles in the history of the republic.