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Another Round of Campaign BS
Nov 9th, 2016 at 6:21pm
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The votes have been counted, the people have spoken. We have Donald J. Trump as our elected 45th President.

However, his proposed economic changes will completely fail to solve the downward spiral of our economy. We cannot grow our way out of the mess. It has gone too far. Any increase in interest rates will compound the problem. The interest on 20T of debt will eat up too much of the tax income.

The only way out is to face the fact that a debt based economic plan will result in economic chaos. A government can only function so long borrowing one dollar for every three spent. The debt load will at a future date will bring the house of cards down. This government and our political leaders will either face that reality or blindly continue the folly with the path they are walking. Governmental spending must be brought back within the government's means.

In all fairness, Hillary Clinton's plan wasn't any better. For too long both major parties have been the parties of big government. Both sides are trying to stay in office by giving away too much.

I wonder if Donald Trump will be the one that has to file for bankruptcy on the US Government?


  

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Re: Another Round of Campaign BS
Reply #1 - Nov 11th, 2016 at 8:44pm
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No one wants to comment. The elephant in the room is that the cutting taxes as a means to grow the economy isn't a viable option. When RR did it our debt ratio was at 30% and by the end of his two terms it was 50%. The additional debt was financed by selling the debt to private parties at a pretty good interest rate with our economy improving.

We now have  a 105% debt to GDP ratio and interest rates have been kept at artificial low rates. To finance the additional debt the Federal Reserve has been authorizing the printing of money and buying the needed bonds at very low interest rates, also known as QE. For trump to reduce tax rates he will be increasing the debt and would need to sell the needed bonds at an attractive rate or enter into more QE.

With all the money being pumped into the system inflation is rising even though the government has adjusted the formula to hide that fact. The party is over, interest rates one way or another will have to rise and the payment on the existing debt will rise requiring more taxes or more QE. The only work around that very few want to talk about is cutting government spending and that will result in pain that the voters may not accept. They have been sold a bill of goods for so many years and to be told the truth now would be a loud fart in church.

Donald Trump could very well end up holding the bag as the bottom falls out. As much as I hate to admit this, when the poo hits the fan I'd rather he face it as a businessman than have a liberal face it.
  

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Re: Another Round of Campaign BS
Reply #2 - Nov 11th, 2016 at 9:33pm
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One of Donald Trumps prime methods to solve his business financial problems is to restructure the debt. That often requires the bond holders to take a hair cut and in some cases, has resulted in bankruptcies. Bankrupting the United States is inconceivable. The resultant financial chaos would be disastrous. We wouldn't ever be able to sell any of our debt at a reasonable interest rate again.
  

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Re: Another Round of Campaign BS
Reply #3 - Apr 21st, 2017 at 3:29pm
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The writing is on the wall. The Fed has held private meetings with the investment banks letting them know that the Fed will divest itself of its holdings in the US Stock Market. Their holdings are rated at 17% of GDP. Expect that balloon to deflate. Falling Stock Market will result in people holding onto what money they have.

Despite public announcements that everything is fine the reality is on the 29th of this month Congress will have to choose between a government shutdown or raising the debt limit. Can't say I know which way that will go.

If they raise the debt limit I expect to see QE4 before the end of the year and that in itself should be grounds to tell investors that the US Government is insolvent and they won't be paid back. QE1, 2, & 3 failed to reinvigorate the economy. I expect 4 to fail also. Already retail sales have fallen off and that has resulted in a decline in manufacturing. People are so in debt that, even if helicopter money is done again, it won't jump start the economy. I think they'll take the money and pay down bills.
  

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Re: Another Round of Campaign BS
Reply #4 - Apr 26th, 2017 at 7:35pm
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President Trump announced his proposed tax as a single page double spaced. Essentially reducing the corporate tax rate from 35% to 15%. Included are the elimination of taxes for married couples making <$26K. Most deductions commonly used by the middle class would be cut.

The proposal isn't revenue neutral. It is estimated that it would, as proposed, cost the Treasury $7T over ten years. Wonder how this is going to look when it comes out of Congress.
  

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