President Trump asks, “Why is so much money sent to the Elijah Cummings district [Baltimore] when it is considered the worst run and most dangerous anywhere in the United States?” Perhaps it’s because of bad budget deals financing failed liberal policies like the one he just made with House Speaker Nancy Pelosi.On another level, the budget deal brokered by his Treasury Secretary Steven Mnuchin is euthanasia for the young, leaving them a legacy of death through bigger government that will tax them at higher and higher rates as they attempt to raise their families in freedom and balance their own family checkbooks.
The deal with Pelosi passed the House with Democratic Party votes as the leader of the socialist Squad, Ocasio-Cortez, voted with Trump. In exchange for more domestic spending and debt, Trump got some extra money for the Pentagon, which is in such a state of mismanagement that it can’t even pass an audit.
He appears to be counting on easy money policies from the Federal Reserve to keep the economy moving forward.
But the debt can only slow economic growth. The Committee for a Responsible Federal Budget reports that if it is signed into law, “…it will be the third major piece of deficit-financed legislation in President Trump's term. In total, we estimate legislation signed by the President will have added $4.1 trillion to the debt between 2017 and 2029. Over a traditional ten-year budget window, the President will have added $3.4 to $3.8 trillion to the debt.”
Trump’s budget deal with Democrats has left true conservatives despondent and dismayed. Conservative Rep. Chip Roy comments that while the Robert Mueller Russia-gate hearing was a train wreck, the bad spending deal train wreck is alive and well. He notes, “$320 Billion ABOVE the [budget] caps over two years is the wrong direction to go when the caps still leave us with $1 trillion deficits.”
Most House Republicans voted against the Trump-Pelosi massive spending and debt bill. They understand what the great economist Henry Hazlitt explained in his book, Economics in One Lesson. “The government cannot keep piling up debt indefinitely; for if it tries, it will someday become bankrupt,” he noted.
Rep. Thomas Massie proposed changing the name of the “Bipartisan Budget Act of 2019” to the more honest, “A Bill to Kick the Can Down the Road, and for Other Purposes.” The change failed 384-47. Massie also introduced a bill (HR 899) to terminate the Department of Education. He only has 11 co-sponsors.
President Reagan campaigned on a platform to abolish the Education Department. He tried but failed. Trump and most Republicans today don’t even try.
Politico reported that Trump told Senate Republicans “that he was happy Fox News and other conservative media had largely held their fire on the budget deal, according to two attendees.”
That’s right: “conservative” Fox News went along with the plan. So did Rush Limbaugh, a self-declared Reaganite who never voted for Reagan. Such is the state of conservative commentary today.
Limbaugh declared support for the deal and said Trump would have been attacked if he had pressed for spending cuts and less debt. “I’ve been hearing my whole life how it’s gonna wreck us and how it’s gonna destroy us, the national debt, the deficit’s gonna ruin us, and so far none of that’s happened,” he said. “At some point it’s got to, but it hasn’t happened when the experts have told us it’s going to. Anyway, do you want to see more ads of Trump pushing Granny over the cliff? Well, I mean, you know what the Democrats would do with this.”
The tough guy president who takes on socialists is afraid of Democratic Party attack ads? It appears Trump put more effort into getting a rapper released from a Swedish prison than fighting Pelosi over budget priorities and getting America’s fiscal house in order.
By taking us further into debt, he’s adopting the socialist argument that we can actually afford Medicare for All and the Green New Deal.
Conservatives operating under the rubric of the Conservative Action Project were huffing and puffing in opposition, saying they oppose the “trillion dollar spending boondoggle.” But this isn’t a boondoggle. It’s socialism. It’s piling debt on debt.
“We’re All Socialists Now” should be the slogan of both political parties.
This financial threat, more so than the military capabilities of China, Russia, and/or Iran and North Korea, could result in the “New World Order” of global socialism that Trump supporters fear. A 1996 book calls it “The New World Fiscal Order” that will be imposed on the U.S. and other countries world because of prior spending commitments built into major entitlement programs.
As Trump argues against “socialist” schemes such as Medicare for All and the Green New Deal, while increasing the debt and deficit, there is another crisis developing on top of predicted shortfalls for Social Security and Medicare -- a public pension funding gap. The Pew Charitable Trusts, which monitors the problem, just reported that despite revenue growth and strong investment returns, the public pension funding gap for all 50 states still exceeded $1 trillion in 2017.
The public and private pension problem is so great that a Joint Select Committee on the Solvency of Multiemployer Pension Plans has been created. Co-Chairmen Senators Orrin Hatch (R-Utah) and Sherrod Brown (D-Ohio) haven’t yet come up with a solution but have issued a statement “committing to continue their work” on a “bipartisan solution.” You can bet one proposal will be higher taxes through a federal bailout.
The world’s six largest pension systems – the U.S., United Kingdom, Japan, the Netherlands, Canada, and Australia – will face a $224 trillion gap by 2050. That’s $224 trillion. The funding gap of this “Global Pension Timebomb” is set to dwarf global GDP.
An astute businessman who understands the nature of debt, Trump must know that we are entering dangerous territory – what the socialists call “the highest stage of capitalism,” leading to credit bubbles, increased volatility, and a possible economic crash. Currency wars, de-dollarization strategies of China and Russia, and the emergence of new currencies and digital assets, symbolize this dangerous new phase.
The businessman President needs to address the crisis in global capitalism before it is too late.