So, What do you THINK?
I did not really understand how the Federal Reserve FOMC could even consider dropping interest rates when their “policies” have already put the country $35T in debt - - much less the half percent drop being bounced around by the pundits, who claim a rate reduction is a ‘done deal’ and it is just a question of ‘how much’.
(Forehead Slap!)
No, wait, this is not hard to explain. This is the only straw left to grasp as we watch the Titanic heave its’ last gasp, and slip under the waves. In ‘scorched earth’ fiscal policy you look at the wreckage and realize there is simply nothing left to burn – AND it is an election year!
So, here we are - - . None of the nation’s traditional lenders will touch more T-bills without a rate increase - - they are just not amenable to incurring debt that will never be repaid. So, we are left with the ‘lender-of-last-resort’ - - we borrow from ourselves. Once again, the Treasury Department (Gee, it is not OUR fault – It is that darned Congress who keep spending money the Treasury Department does not have) have run out of money to fund the unfettered largess of Congress.
The problem, of course, is the whole world knows we are $35T+ in debt, with NO WAY to ever repay it. So, we will pass yet another “continuing resolution” to keep the carnival tent open for one more season, and “borrow” as much as we can (from ourselves). How much? A few $B? A few $T? Whatever we can get away with? Yes, that. After all, we know it cannot go on forever. AND while the Fed’s stated task is to act apolitically to maintain the integrity of the US Dollar (as Greenspan once did) this situation demands THE BEST RATES OUR SPIN DOCTORS can conjure-up, AND Jerome Powell is NO Alan Greenspan.
What Next?
That is easy enough - - a “Continuing Resolution” – That is, authorization by Congress to BORROW MORE, so they can keep right on spending with NO plan to EVER reduce the debt, much less pay it down. The current administration’s plan? Spend more. KaMAHala’s plan? Spend more. Federal Reserve’s plan? Run those printing presses! There IS no plan!
Wait a minute. There IS a plan. Become energy independent (AGAIN), as we were during Trump’s administration. Increase tariffs (significantly) on all imports to put money in the treasury, AND to make imported goods expensive enough to incentivize “Buy American,” (AGAIN) as we did during the Trump administration). Incentivize job creation through innovation, (AGAIN) as we did during the Trump administration.
Does anyone find it strange that Joe & Co., if they ever mentioned “tariffs” at all, billed them as ‘Trump’s plan to make goods more expensive for American consumers,’ and KaMAHla now claims tariffs are now part of her campaign platform?? Really?
Whatever the result of November elections, The USA is in for a rough few years. THINK before you vote.
Imagine a world with a dysfunctional monetary system, where the greatest sovereign debt (by far) belongs to the USA - - What is YOUR plan?
PS. As always, this is a view from the sidelines. I am not an economist, but an old man who can add and subtract, and one who has been the victim of politician’s lies for a very long time. This is an invitation to discuss a real, inescapable, and imminent crisis.
Please respond if you feel I have over-stated the case, my conclusions are inaccurate, or if there is a more benign explanation for the nation’s financial situation.
MadChimp
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Well, that was spot on! “I’m up to my eyes in debt, but I’ll just spend more!” Yeah, that’ll fix this! Apparently, every member of the federal government is stupider than we thought!
I agree with you totally. I also trust GOD but HE does have consequences for our actions as well as our ancestors. Read HIS book. Listen to HIS words. HE told us how to heal our land and we just like Israel ignored what HE said. We ate in for tuff times. Due to ourselves not repenting, not putting HIM first, continuing worshiping other gods (work, sports, movies, egos, pleasures, money just to name a few), not changing, not seeking HIS face or HIS ways. The window is close to being shut. Will EACH of us change in time?