Republicans Lying To The American People About Budget Deficits!

On October 22, 2018 within three weeks of the midterm elections on November 6th President Trump comes out with this policy initiative to lower middle income Americans taxes by ten percent. This is appalling and completely irresponsible behavior making a major tax policy initiative just for votes completely disregarding the American people's interest that we clearly cannot afford such a reduction in taxes right now. The country hasn't even made the 2017 tax cuts for the middle class permanent and that will costs hundreds of billions of dollars over ten years plus any responsible and reasonably informed person about the country's budget knows the country has a serious Federal Budget problem even Donald Trump knows this for he told all his cabinet secretaries to develop plans to cut their budgets by five percent for next fiscal year!


Though the alarm that should really shock the nation is how starkly bad the budget deficit problem is for the American people. I think that the evidence leads to the conclusion that the Republicans are not disclosing to the American people how bad things really are that the numbers indicate clearly that nation is in clear danger of an economic Depression over it! The truth sure seems to be that the deficit for this fiscal year which started last month and will end in September 2019 will top a trillion dollars and in following years will grow significantly larger, the budget deficits are on a permanent intolerable growth rate. There is many reasons why these astronomical figures should trigger the highest alarm for the American people but the one that all Americans can be assured of and that will definitely crash our economy unless drastic action is taken is how this will affect interest rates across the American economy. Specifically what is meant is that there is only a limited amount of dollars in America and the World to buy government and private debt or to use the specific term for the purchased product "bonds" so when the U.S. government runs trillion or 1.2 or 1.4 or higher trillion dollars deficits the U.S. government has to go out and sell a trillion or a trillion plus dollar of treasury bonds in the financial markets to finance these budget deficits these are enormous amounts of bonds so what happens is that the U.S. government will end up competing in these bond sales against Large Capital, Mid-Capital and Small Capital businesses throughout the world who also need to sell bonds to pay off their outstanding bondholders when the principle and interest becomes due and to finance their businesses what this competition will due is dramatically raise interest rates across the economy causing a multitude of economic problems namely in part smothering economic growth as individual Americans and businesses in America cannot afford to borrow money. On top of this the American people should consider that these out of control sky high budget deficits will sky rocket America's expense of interest on the debt that is already way too high being $310 billion for fiscal year 2018 which will hamstring the Federal Government's capacity to do needed social and emergency spending for the American people. Further, the reckless and unaffordable levels of national debt for America that these levels of budget deficits will bring will put humongous pressure on the American people and American government do default on its sovereign debt which will cause catastrophic effects in the U.S. and World economy!



Why you ask would the Republicans deliberately not disclose and suppress how bad the budget deficits will be? Because America's next government, the one elected on November 6th of this year will have three choices to avoid America entering into a depression and this description of the future is not a possible scenario occurrence or a probable scenario occurrence it is a definite scenario occurrence! These are the three choices: one cut federal spending like crazy; two, raise federal taxes like crazy or three make major efforts in the area of cutting spending and raising federal taxes. If the Republicans control the next government that being the House, the Senate and of course the White House they will "only" pursue choice one cutting federal spending like crazy (the current Republican Party doesn't hold good values on responsible government taxing) they will accomplish this through the legislative mechanism called "reconciliation" where they only need a majority of votes in the House and Senate to pass legislation as opposed to the ordinary sixty vote threshold in the Senate. And what pray tell are the areas the Republicans will definitely cut the Affordable Care Acts subsidy to help the middle class buy health insurance, Medicaid expansion, college loan forgiveness programs and many other programs that are vital help to low and middle income Americans. If the Democrats get control of the government or a lever of government that is control of the House of Representatives they will pursue choice three a balanced effort of major cuts in federal spending and of major raising of taxes; specifically, the Democrats will pursue doing what they have been saying they would do if they get back in power reverse in part the Republican 2017 tax cut law one item being raise corporate taxes from twenty-one percent to twenty-five percent, reverse the top level individual income tax rate and the estate tax provisions to the levels they were before the 2017 tax law change and cut spending by really clamping down on the pharmaceutical industry and their charging the American people higher prices than the rest of the world pays for drugs! If there is any doubt that this type of dramatic action awaits the American people with the formation of the next Washington government one should consider that the urgency here doesn't even need to wait for the behavior of sovereign debt investors demanding higher interest rates to buy Treasury bonds, the pressure from the Credit Rating agencies (Fitch, Moody's) will compel this they are legally bound to acknowledge to the investment community when a country's borrowing is out of control and unsustainable in America's case they would do this by taking away America's triple AAA credit rating. If they did this it would cause an economic Tsunami effect in America and World economies where countless public and private entities are legally required to hold triple AAA securities in certain situations and if U.S. Treasuries can no longer meet this legal obligation it will cause mass disruption and upheaval in these economies the negative financial ramifications unknown but outstandingly bad!



What is the evidence behind the conclusion that the Republican's are suppressing the gravity of America's Budget Deficit problem. The signals are numerous! The last fiscal quarter and the end of the fiscal year ended with the end of this September over a month ago the Congressional Budget Office (CBO) the Financial Umpire or Referee for Congress and for America should have come out with updated deficit numbers and if they did responsible numbers would indicate they got worse since the last projection they would be at trillion dollar and trillion dollar plus levels for the entirety of the ordinary ten year projections. Another signal is CBO reporting on this issue is that they make their projections on deficits as percentage of America's GDP (Growth Domestic Product), this is meaningless to ordinary Americans, the ordinary voter, they cannot learn the dollar amount of the deficit from this type of reporting and it is the dollar amount that is important they have an idea of the dollar amount of their state and local budgets the actual dollar levels of deficit would set off serious concerns for them. Another Republican controlled entity the U.S. Treasury Department should be publicly reporting the dollar levels of budget deficits since the results of the last quarter.



Why does the last quarter and the last month's results matter! Because it shows that the economic stimulus effect of the 2017 tax cut law peaked in the second quarter of this year; meaning that the permanent acceleration in the U.S. economy that the Republicans bet the country's economic welfare on with their 2017 Tax law and the resulting federal government tax revenue generation this was supposed to bring and consequent lowering of budget deficits will never materialize, the Republicans gambled and lost! Last quarter, the one ending at the end of this September, the growth in the GDP was 3.5 percent down from 4.2 percent growth in the second quarter of this year; for the third quarter of this year business investment grew at the low level of .8 percent. Last month some of the financial markets underwent a correction, a drop of ten percent from their peak indicating that the investment community does not see great levels of revenue growth, does not see great levels of capital investment, etc. from these corporations in the foreseeable future. The flags of the pending economic slowdown are many. The CBO's projections on GDP growth are 3.1 for 2018, 2.4 for 2019 and below 2.0 for 2020 thru 2028. The Federal Reserve Board, America's Central Bank, projections are in the same range as these as reported in the minutes of their meeting in late September of this year. What this economic slowdown assessment means is that the U.S. economy will not generate the tax revenue needed to lower future Federal Budget deficits they will only get worse! The Republican Party has not highlighted that their Party added over a trillion dollars to the national debt last fiscal year double what the Federal Government added the prior fiscal year. The national debt is at $21.6 trillion the interest on the national debt was $310 billion for last fiscal year over $60 billion higher from the prior fiscal year with interest rate's rising and projections of a trillion dollars per year addition to the national debt for the foreseeable future the national debt's escalating interest expense portion of the Federal Budget will have a catastrophic effect on the country's finances unless something dramatically is done about it!



Since the Great Depression back in the 1920's there has only been two incidents of a group of American's committing wrongdoing that rivaled the level of those responsible for the great depression. One incident was the group of Americans from America's big banks in the early 2000's that bundled loans from sub-prime home loan borrowers where it was impossible for them to repay their loans once their teaser rates reset and sold bonds based on those bundled loans and sold insurance (swap contracts) on those bonds for pennies on the dollar; this wrongdoing ultimately ending up, outside of the Federal Reserve System, essentially shutting down America credit system. The second incident was the group of Republicans holding national office that crafted, sold and voted for and signed into law the 2017 tax reform law, barring Divine Intervention this behavior so worsened our budget deficits and national debt that it will cause America to enter into an extremely painful Depression that America will not escape from easily! The American people have been majorly lied to by their government on several occasions throughout America's history prior to the Trump administration the last major occasion was during the build-up to the Iraq War which eliminated Saddam Hussein where the Federal Government lied in exaggerating the evidence that Saddam Hussein had weapons of mass destruction the relevance being that this allegation was the justification for the war; I don't allege here that it wasn't good for the Iraqi people and the world to remove Saddam from power but I do allege that it was off-the-charts wrong to lie to the American people which entered America into a war which caused four thousand plus U.S. men and women in uniform to lose their lives and thirty-two thousand plus to be significantly wounded! The Federal Government on this budget deficit issue has been lying to the American people by not conveying to them what the actual numbers of the budget deficits will be and not telling them this crucial information "prior to the November elections" so they could factor it in on how they vote on this historically crucial election for America!