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Title: Editorial blasts Trump for giving Democrats 'exactly what they want' on debt ceiling deal
Source:
Fox News
URL Source: http://www.foxnews.com/politics/201 ... want-on-debt-ceiling-deal.html
Published: Sep 7, 2017
Author: Fox News
Post Date: 2017-09-07 08:11:21 by Stoner
Keywords: None
Views: 2552
Comments: 10
The Wall Street Journal’s editorial board on Wednesday wrote a blistering critique of President Trump’s decision to overrule congressional Republicans and his own treasury secretary to cut a deal with Democrats to raise the federal debt ceiling “for a mere three months.” The editorial, titled ‘The Pelosi-Schumer-Trump Congress,’ blasted Trump for giving Democrats “exactly what they want, which is to set up an even steeper fiscal cliff on debt and spending in December when Republicans hope to be focusing on tax reform.” Trump sided with the Democratic leaders — “Chuck and Nancy,” as he amiably referred later to Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi — as they pushed for the three-month deal, brushing aside the urgings of GOP leaders and Treasury Secretary Steven Mnuchin for a much longer extension. Republicans want that longer allowance to avoid having to take another vote on the politically toxic issue before the 2018 congressional elections. Aboard Air Force One, Trump told reporters, “We had a very good meeting with Nancy Pelosi and Chuck Schumer.” He didn’t mention Republicans McConnell and House Speaker Paul Ryan, who also had been present. “We agreed to a three-month extension on debt ceiling, which they consider to be sacred, very important.” “I think the deal will be very good,” Trump added. The deal promises to speed the $7.9 billion Hurricane Harvey aid bill, which passed the House overwhelmingly Wednesday, to Trump’s desk before disaster accounts run out later this week. The debt ceiling and government funding extensions will be attached. The Journal wrote, "Part of the problem is that Congressional Republicans once again helped put themselves in this box. Congress can’t let the U.S. default on its debt, so the majority party has to raise the debt ceiling whether it likes it or not. The smart GOP play was to attach a long-term debt increase to some other must-pass legislation and get it over with. One and done." At first, in Wednesday’s Oval Office meeting, the Republicans lobbied for an 18-month debt ceiling extension, then 12 months and then six, but Trump waved them off, sources told the Associated Press. As Mnuchin continued to press an economic argument in favor of a longer-term deal, Trump tired of it and cut him off mid-sentence. Late Wednesday, with criticism pouring in from Republicans, Mnuchin himself made a rare appearance in the Air Force One press cabin, as the president traveled back to Washington from North Dakota, to defend the deal. “Our No. 1 priority was getting money for Harvey. Let me very clear: That’s the president’s number one agenda and we accomplished that,” Mnuchin insisted. Mnuchin also claimed several times that the president actually could have had a one-year package but didn’t want to lose the opportunity to raise military spending in new budget bills before then. Aides to Schumer and Pelosi responded with incredulous disbelief to this claim. Ryan slammed the Democrats’ demand for a three-month extension as “ridiculous and disgraceful.” He issued no public statement on the final deal. McConnell did not sugarcoat what happened when he addressed reporters a short time later. “In the meeting down at the White House, as I indicated, the president agreed with Sen. Schumer and Congresswoman Pelosi to do a three-month CR and a debt ceiling into December, and that’s what I will be offering based on the president’s decision,” McConnell said. “CR” refers to a continuing resolution, which will extend existing government funding levels into mid-December, when the prospect of an enormous new round of deal-making now looms. The move buys almost three months, until Dec. 15, for Washington to try to solve myriad other issues, including more funding for the military, immigration and health care, and a longer-term increase in the government’s borrowing authority to avoid a first-ever default. Adding the stopgap funding bill to the Harvey aid package would also immediately free about $7 billion in additional disaster funds. Schumer was as pleased in the aftermath. “The bottom line is, the president listened to the arguments,” Schumer said. “We think we made a very reasonable and strong argument. And, to his credit, he went with the better argument.” The Associated Press contributed to this report.
Well if anyone had hopes that DJT would correct the financial course of the nation, they can FORGET IT! The globalist/CFR/FED crowd are still firmly in charge ! Expect continued depreciation of the dollar !
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#1. To: Stoner, NWO Accomplished (#0)
It seems that the Republican Democrat Party has chosen financial collapse as their preferred method of terminating the USA. That way they can buy up assets at fire sale prices, using federal reserve notes that aren't worth much of anything anyway. Rise of the Global Empire, Great Depression II. It's a win win for the global elites. I'm not going to belittle you. A great number of people hold the belief that we are careening into bankruptcy as a nation, only a few years away from utter collapse and calamity. The Democrats and Republicans just seem to ignore the concern and proceed on blythely, leaving people to imagine the worst. I certainly did. This post is to correct the record, to present the REAL financial picture of the nation (gleaned from the Flow of Funds report by the US Treasury, seconded by a Credit Suisse report on national wealth). The real status is not nearly as bad as you might think it is, and certainly nothing like the conditions that those who want to sell you gold and guns or partisan politics would have you believe. Here are the real numbers: The net national wealth of the United States AFTER government and private debt are taken out of gross national wealth, is $94.84 trillion. There are also potential (unexploited) natural resource assets totaling $45.7 trillion. Private debt in the USA is $12.7 trillion. Public debt comes in four flavors: the official national debt, of $19.84 Trillion, "Agency debt" (debt issued by federal agencies and federal NROs of $8.62 trillion, State government debt of $1.17 trillion, And local government debt of $1.85 trillion. So, the total government debt, all levels, is $31.18 trillion. When private debt is added to that, total American debt, public and private, is $43.88 trillion. That's a lot of money in absolute numbers, but that is upon a total national wealth of $138.27 trillion (plus reserve natural resources wealth of an additional $45.7 trillion). Put differently, the US, considered as a household, has an aggregate wealth (liquid and illiquid), of $183.97 trillion dollars. Our debt on that is $43.88 trillion, which is to say that we have a debt-to-wealth ratio of 31.7% or 23.8%, depending on whether or not you consider proven natural resource reserves to be part of the national wealth. So yes, in absolute numbers, $43.88 trillion is a lot of debt. But let's compare that to American households. The average American household has $132,500 of debt (mortgages included), and an median net wealth of $139,000. Which is to say, the debt to wealth ratio of American families, on average, is 48.8%. The average American family is in much, MUCH worse shape, debt-wise, than the United States as a whole. Now, of course, if a family's debt grows from the already high 48.8% to higher and higher ratios, eventually the debt growth will outstrip income. THAT is really the issue: when debt outstrips income and accumulates, eventually the family is driven into bankruptcy. From the gold-peddlers and gun-sellers and political we-can't-do-anything- because-we-are-going-broke! doomsayers, you would think that that is the state of affairs in America. But it is not true. The US GDP in 2016 was $18.57 trillion. It is on track to grow 3% in 2017, perhaps more. That means that the economy - the national wealth of the USA - will grow by $557.1 billion this year. The government deficit this year is expected to be $603 billion. So, the national debt will grow, by $45.9 billion. Does this mean that the gross debt-to-wealth ratio of the US will also grow (by .0002%)? No, it doesn't. It doesn't because GDP measures the active economy. It does NOT include the latent growth in the value of capital. So, all of those reserve natural resources? They grow in value each year, as does the value of held real estate and held asset, but none of THAT gets included in the GDP, because it's not "product", it's unrealized capital appreciation. Housing, for example, has increased an average of 0.7% per year in value since 1980, including the worst housing crash in American history. Real estate accounts for nearly 50% of the national wealth, so that innate 0.7% per year growth in the value of real estate translates to about a 0.35% growth in national wealth. Remember that the growth of the debt over the increase in GDP amounts to .0002% of national wealth. So, the value of the growth of assets vastly outstrips the increase of government debt, by three orders of magnitude. So no, the amounts of debt we're adding each year are not, in fact, driving us inexorably towards national default and bankruptcy. The net wealth of the country continues to increase considerably faster than the total public debt. (And in truth, public debt is an ASSET to the its purchaser, so in reality the absolute cost to the overall economic structure of the country really only lies in the interest payment.) None of this is to make us feel good about wasting money. That's a separate discussion. The merits and demerits of that on which we spend public money on are a very legitimate subject for discussion. What this is, is the injection of honesty and objectivity into that discussion. It is legitimate to oppose, say, flood relief to Houston on philosophical grounds. It is NOT legitimate to oppose it on the grounds that we are breaking the bank, because that is not true. It is not even close to being true. It is also injecting some stone cold reality into the hysterical theatrics of certain politicians who want to stampede us into taking actions that are un-Christian or poorly thought on, on the grounds that we face a "crisis" in public finance. We don't. Making one up to generate undeliberative action is dishonest. Also, there are those in the financial and commodities and prepper industries who make their personal fortune peddling the impending apocalypse, and using the public's poor understanding of the true nature of our national finances to stampede people into buying things they don't need for the PURPOSE of surviving an "impending" financial armageddon that is, in fact, not on the cards AT ALL EVER we were to continue to follow our current practices. Remember - the national wealth is growing much faster than the budget deficit. We are not eating all of the seed corn. We spend too much money ON CORRUPTION. The problem is the corruption, the bad equipment, the useless programs, the philosophy of what we're doing (is arming Muslims a good idea?). That's where the debate should be. To say that we "can't" do thus and so "because we're about to go broke and drown our descendants in debt" is a lie. I don't think that most people who say and believe those things think they are telling a lie. I think people have been bamboozled by politicians and peddlers - AGAIN - about a financial fact pattern that doesn't really exist. This post is an antidote to that. Let's focus on the actual programs, because it's not true that "we can't afford to pay for it". Yes we can. We can afford to do what we are already doing now FOREVER, and the country will still get wealthier, because national wealth is rising at a rate three orders of magnitude higher than national debt. But wait! I hear the bugles blowing from the cranky fringe. UNFUNDED MANDATES! I have left out UNFUNDED MANDATES! The UNFUNDED MANDATES, stretched over an infinite horizon, amount to $90.% TRILLION! THAT sure destroys everything I have said above! Those must all be accounted for! Yes, they must. But the thing about future obligations is that you reserve for them, to the extent you can, and you must remember that the same analysis above applies. Unfunded mandates, such as medicare and social security, do not suddenly all come due in a year. Rather, they are very predictable over a perpetual span of time. There are so many people, who will need so many benefits. At the CURRENT rate of income off the CURRENT economy, they are indeed, unfunded. We have not set aside $90.5 trillion in Al Gore's idiotic "lock box". We pay as we go. The piece that the Unfunded Mandates! alarmists leave out - either maliciously or, usually, because they don't really understand economics, is that those mandates come out of an economy that itself grow and produces additional income over time. So yes, the unfunded mandates, over an infinite horizon, are $90.5 trillion, but the economy itself, the GDP, over that same infinite horizon, is $1.3 QUADRILLION dollars...which places the unfunded mandates at 6.96% of the economy, spread over the same time horizon. That is never going to break the back of the economy. Not ever. The purpose of my post is not to say that all is well. It IS to say that all is a whole lot better than the alarmists pretend, and that we do, in fact, have the time and the economic strength to consider, for example, HOW to provide universal health care and hurricane relief, not WHETHER we can AFFORD to. We can. I don't want to WASTE MONEY on corruption and on unsound things (like giving arms to Muslims or giving sex change operations to members of the Army). But that is what we should be doing: talking about what and why or why not each thing. That we're teetering on the brink of financial oblivion, as a negotiating tactic, is an utter lie, completely untrue. It has no basis in fact. I wanted to make sure that you had these real economic facts and considerations in hand, so that when you are considering, say, financial aid for the victims of the hurricane, you don't swallow the lie that if we do this our grandchildren will be living in cardboard boxes and eating Alpo. The opposite is true. If we spend the sort of money we are talking about for Houston, the national wealth will nevertheless continue to INCREASE. We are not close to choking that off. So let's be honest and realistic and sober, and not let ourselves get stampeded by liars.
Great post. I didn't want you think no one was reading it. OTOH, it was a bit long for a forum where 80% of the posters can't seem to read even the first paragraph of an article, let alone a post about it. : )
Analyses that are meaty require time to write. I'll take the time. Writing it out forces me to be precise, because I know that various precise minds here will pick at whatever they don't like. I also know that there will be the hurricane of "ideological heresy" wails. And there will be the even more deafening silence of those who don't read it. Nevertheless, if I get through to a few minds, this site will be a treasure, because people will realize they can get an analysis here that cannot be found anywhere else. FreeRepublic started going downhill the day they banned me.
I'll admit that you are the master of the meaty retort. At least on days where you aren't too busy for posting.
There are ways that back-of-the-envelope analysis could be made a LOT tighter. I only had an hour to do this, so I hit the main points. A more precise fix on the components of the national wealth, whether they are public or private, and their respective capital gain growth rates would be very hard to do, and immensely valuable. Is land better in public or private hands, for example. There is no clear answer to that because the economics are only part of the picture. It would, I am sure, produce an absolute profit to the treasury to allow developers to put a pair of luxury casino resort high-rises on directly opposite sides of the Grand Canyon, and run both cable cars and high-lines between them, for fee-paying tourists to get the best view of the canyon ever. But is that what we, the people, want to do with the Grand Canyon? If we're ok with it, given that it's a guaranteed profit source on public land, why not have the park itself build and operate the hotels, so that 100% of the profits go to the federal government, instead of only getting 39.6% of the net profits, after the bookkeeping wizards of the private resort have whittled down the numbers? The answer to that question is ideological, not economic: the government would earn more money operating it directly than through taxing a private concern, but should the government be in that business. The Turkish government (and the Romans before them) used to (and may still) formerly place women prisoners in a "prostitute prison" whereby their services were sold (involuntarily) to the visiting public as part of the punishment of the prison term. This generated a lot of money for the state, and kept down both the crime and the disease rate. Economically it makes sense to extract whatever profit can be extracted from the bodies of prisoners, but do we want to do that in a Christian society? Do we want to BE a Christian society? Death row inmates could be kept in medical facilities for organ harvesting and medical experimentation on an ongoing basis. It would be lucrative, it would advance science and it would save lives. Do we want to make those choices? Prisons can be privatized, thereby reducing costs, reducing the public payroll, and increasing the abuse of prisoners. Do we like that choice that we've made? Do we want to continue it? Social Security - do we want to continue it? Will those ideologically opposed to the idea of it nevertheless want to see it survive because they need it? All of these things are legitimate discussions. Should we have the government harness up and sell all of the natural resources on government land, and use the proceeds therefrom to completely retire all government debt in America (which in turn permits significant tax cuts, or at least the end of deficit spending). There are all sorts of things we COULD be deciding as a people. Instead, we listen to the lies of politicians who seek to stampede us by telling us that the police want to shoot all blacks, and that the economy is about to melt-down because of unfunded mandates - and that we're totally irresponsible to authorize ANYTHING until those future expenses are reserved for. Somebody on a thread was bellyaching that price gouging is suppressed. Fine. Shall we have the federal or state governments come in and charge gouging prices to disaster victims for bottles of water, then use that gouged money for debt reduction? Everything is on the table once you realize that we have a great deal more latitude of action than our political leaders pretend.
Or on days when my eyes wall over with murderous rage. Then I can become a poop-flinging baboon, and that doesn't do anybody any good.
You also overlook some other factors and possible actions. In a zero-sum game of global capitalism, wealth can (or should) be measured relative to other entities. If we got more aggressive economically and through access to our markets (most-favored trading status, tariffs, etc.), we could do a lot more. In fact, we are doing a lot more now than a decade ago as we have moved from the biggest energy importer to now being the world's leading energy producer and exporter. And there's no end in sight for our natural gas and fracking and oil boom. It has changed the balance of power, the importance of the Mideast to the world, etc. The ramifications in economics, politics and diplomacy are too extensive to list briefly. And our wealth is relative to other nations and, in particular, to the buying power of our consumers in this economy. A lot could be done to redistribute buying power (not wealth per se) to consumers on a broad basis. Like increasing access to desired services and decreasing their prices via regulated utilities. It would not be difficult to cut energy prices to consumers by 20%-30%. It would be even easier to cut broadband and cellular service costs, up to 50%. Think of the difference that would make. That is some very serious money. All the pols have to do is value the voters more than they value their corporate donors in the energy and communications sectors. There's more than one way to skin a cat is all I'm saying here. So your estimate of U.S. debt, assets and income are a decent start but there's a lot more that could be done if there is political will to do so. And buying power in our economy is a much better measure than expressions in inflating dollars.
Thank you for the cooked books perspective that's so popular with Keynesian ponzi scheme economics fans. FDR loved the Keynesians, also LBJ, Jimmy Carter, Poppy Bush, Bill Clinton, W. Bush, Barack Obama, and now apparently Donald Trump. But you can't just fudge a few numbers, and pencil whip the economy out of a depression and collapse. Fake News ain't gonna cut it! Keynes vs. (Friedman + Hayek) on Markets (Keynes vs. Hayek) vs. Friedman on Monetary Policy Keynes vs. (Friedman vs. Hayek) on Fiscal Policy (Keynes + Friedman) vs. Hayek The free market usually gets associated with Friedman, but not all free market folks follow Friedman’s economics. Many free market economists follow Hayek’s vision of economics, Austrian Economics. Austrian Economics rarely uses any mathematics, but seeks to understand human action. It takes into account the human element of economics. If one is interested in understanding booms and busts from this perspective, Roger Garrison, has a slide show which depicts a model of sustainable economic growth, based on the Hayek’s Nobel Prize winning work. Also, view this music video which contrasts the Keynes versus Hayek boom-bust models. Regardless if we disagree with the thoughts on markets, economics, or policy of Keynes, Friedman, and/or Hayek, it is interesting to note their areas of agreement, and their respective visions towards a sustainable economy. Garrison, R. (1992) “Is Milton Friedman a Keynesian?” in Mark Skousen, ed., Dissent on Keynes: A Critical Appraisal of Keynesian Economics, New York: Praeger Publishers, 1992, pp. 131-147. Yes he did. And FDR was the greatest president in American history. After the Republicans blew up the American economy and then kept it down, FDR turned it around. This is visible in the value of houses, which plunged every year Hoover was in office, and reached their nadir in the last year, but which went up every year, year on year, after FDR broke the resistance of the Supreme Court to the New Deal. Having beaten the Depression, FDR turned and beat the Axis, won World War II, gave us the nuclear monopoly, and left us the world conqueror. No President has ever accomplished anything like that. He was elected four times because the American people saw his greatness. So if you want to put me along side of FDR, you go right ahead. Know who else thought FDR was great? Ronald Reagan. He was an FDR Democrat too. I'd proudly wear that title: FDR Democrat. If they existed anymore. They don't. As far as "cooked books" go, I actually provided a very interesting brief analysis of why the nonsense you believe in is just that: nonsense. You didn't provide anything in response, because you're not personally capable of doing the analysis, and nobody has ever done one like that before for you to go running to. Your version of economics is dying. It has lost ground. It's a smaller and smaller wedge of the GOP, and it's associated with Ryan. So you can be like the Republicans of 1930, and just ride those old, unworkable, wrong ideas to the bottom of the sea, if that's what you really want to do. By doing so you they guaranteed that FDR's practical and successful legacy would endure, largely intact, until today. You will stack gold in your basement and wait until the end of your life for the collapse. It will never come. 2007-2008 was unpleasant, but it wasn't close to a collapse.
The globalist/CFR/FED crowd are still firmly in charge ! Expect continued depreciation of the dollar !
#2. To: hondo68 (#1)
It seems that the Republican Democrat Party has chosen financial collapse as their preferred method of terminating the USA.
#3. To: Vicomte13 (#2)
#4. To: Tooconservative (#3)
#5. To: Vicomte13 (#4)
#6. To: Tooconservative (#3)
#7. To: Tooconservative (#5)
At least on days where you aren't too busy for posting.
#8. To: Vicomte13 (#6)
(Edited)
There are ways that back-of-the-envelope analysis could be made a LOT tighter.
#9. To: Vicomte13, Keynesian Fake News, End the FED (#2)
our grandchildren will be living in cardboard boxes and eating Alpo
John Maynard Keynes, Milton Friedman, and F.A. Hayek Compared
Three of the most influential economists include John Maynard Keynes, Milton Friedman, and F.A. Hayek. Keynes and Friedman are typically viewed as opposing, rather than supporting each others views. Hayek often gets overlooked, although is becoming prominent once again, as of the last boom and bust. It’s interesting to note the overlap and differences between the three economists.
When it comes to markets, Keynes suggests interventionism from the government, and Friedman + Hayek usually suggest free markets with little, if any government involvement.
Friedman suggests that monetary policy, controlling the money supply, can help smooth out recessions. On the other hand, Keynes suggests monetary policy plays little role in stimulating the economy and aggregate demand. Rather, Keynes’ solution is spending by government. Hayek is adamantly opposed to monetary policy, as he thinks its implementation is what causes boom-bust cycles in the first place.
Keynes suggests fiscal policy to help prime the pump to recovery after a recession, where government stimulus packages prop up the economy. Friedman and Hayek oppose such intervention on the basis of interfering with the market process. Hayek takes a stronger stance against any such intervention.
If we look at interventions government has taken to help “stimulate” the economy, the actions are more akin to the economics of Keynes and Friedman, where Congress passes stimulus packages, and the Central Bank inflates the money supply. Mainstream economics is a hybrid of the Keynes and Friedman approach. However, from Hayek’s view, the actions of a “stimulus” and inflation sow the seeds to next bust. In one respect, Friedman is a “Keynesian”, but in another he is not.
__________
Additional Resources
Garrison, R. (2002). Business Cycles: Austrian Approach . Auburn University. Retrieved March 21, 2010, from http://www.auburn.edu/~garriro/c6abc.htm
Garrison, R. (2004). From Keynes to Hayek: The Marvel of Thriving Macroeconomics. http://www.auburn.edu/~garriro/sdae04.pdf
Garrison, R. (2007). Hayek and Friedman: Head to Head. SEA Meeting: New Orleans. Retrieved March 21, 2010, from http://www.auburn.edu/~garriro/hayek%20and%20friedman.pdf
Mariano, Jonathan (2010). Business Cycles: Symptoms vs. Causes. Austrian Scholars Conference 2010, Mises Institute. Retrieved March 21, 2010, from http://jonathanmariano.blogspot.com/2010/03/business-cycle-theories-symptoms-versus.html
Papola, John (2010). Fear the Boom and Bust. EconStories.tv. Retrieved March 21, 2010, from http://www.youtube.com/watch?v=d0nERTFo-Sk
Photo: http://www.flickr.com/photos/nickwheeleroz/3658481865/sizes/l/
Jonathan Mariano is an MBA candidate with the Presidio Graduate School in San Francisco, CA. His background ranges the spectrum from co-founding an internet startup, to leading technological change for an established nationwide home builder. His interests include the convergence between lean & green and pursuing free-market based sustainable solutions.
#10. To: hondo68 (#9)
FDR loved the Keynesians
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