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Are Trump And Musk Trying To Engineer A ‘Government Recession’?
Donald Trump and Elon Musk (only one of whom was elected, by the way) may be trying to engineer a "g
This could well be the full employment act for consultants. Despite the implication that government employees are retired on the job, my experience has been there are real programs requiring real experienced folks delivering services/funds/advice to the public they serve.
I still remember fondly the consternation during Clinton’s administration that there may not be any 10 year treasuries issued and how that would impact mortgages etc. Those were the days.
You know, Trump and Musk’s compounding error rates are actually calming me down a bit. Both of their self-proclaimed really huge genus brains have been deteriorating a good deal. Anyone who studies econ knows that every gain is countered by a loss. Dollar up, exports fall. Dollar down import up. Rates go down dollars go other way. And so on. If these jokers keep proving how much they don’t know on a daily basis they will lose lots of support. People in his country don’t like ‘flip-floppers.’ This mess could very well turn fun to watch. That mood darkening could be a canary in the deep dark mine. Remember Scott may be a bit more adult sometimes but someone else had to write his copy. New mistake today.
“You know, Trump and Musk’s compounding error rates are actually calming me down a bit. Both of their self-proclaimed really huge genus brains have been deteriorating a good deal.”
We need a chart to start tracking that for us.
The “public sector” referred to is federal, state, and local, and the growth has been in state & local. Federal employee headcount has been flat at about 3MM since 1990, and thus declining as a percent of population. See FRED series All Employees, Federal (CES9091000001)
https://fred.stlouisfed.org/graph/fredgraph.png?g=1Dvgu&height=490 I’ve no doubt there has been headcount growth but it has been via contractors. The federal government contracting stocks know this (BAH CACI etc).
I suspect the biggest driver of a “government recession” will not be the elimination of direct federal employees, but the freeze and general chaos around all federal grants, contracts, disbursements, etc . Last I heard, this is impacting everything from Head Start childcare programs to contractors working on Federal and State highway programs. Add the multiplier effect, and it feels like a potentially large liquidity shock in 1Q. This is on top of the TGA and debt ceiling dynamics that were already forcing Treasury to institute special measures.
However, I don’t understand how a government recession makes passing big tax cuts easier. I probably need that explained to me “as if I were a small child, or a Golden Retriever”. Virtual wink to anyone who gets the reference.
You’d think Musk would have learned his lesson after he had to hire back a bunch of the people who chose to fork off over @Twitter.