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RECESSION WHEN?

May 3, 2018

RECESSION WHEN?

We have been hearing for years that Democrats are the big spenders who are fiscally irresponsible and that the republic cannot survive their massive spending. With passage of the Ryan/Trump tax bill that gave more than 1.5 trillion to the rich and corporate class and the bill to pay for it to the rest of us and our children and their children, that myth is forever and irrevocably shattered. It is the Republican Party that is demonstrably the big spender and fiscally irresponsible, a party which showered its mega donors with your tax money and mine, borrowing such trove from our future and that of our children’s children to lavish on their “campaign contributors.”

There is something going on in America more dangerous to our survival than Stormy Daniels and Trump’s latest prevarications. It is our cavalier attitude toward budget and debt management, as demonstrated by passage of the Ryan/Trump tax act. The recent Congressional Budget Office (CBO) projections of the effects of this Republican theft of taxpayer money to hand over to the rich tells the story. We will soon have a trillion dollar current budget deficit to add to our debt of already some $21 trillion. The non-partisan CBO also projects budget deficits of $1.5 trillion dollars per annum by 2028 and a national debt of $33 trillion by that time, a debt which will amount to 96% of GDP at such point!

To give the reader some idea of the numbers we are parsing, interest payments of $915 billion alone on the debt by 2023 will exceed the costs of our military! We’re talking big bucks by any standard and a coming situation far more dangerous to a continuation of our republic than Stormy or the daily prevarications and propaganda emanating from the Oval Office.

When the Ryan/Trump tax bill was signed into law I predicted that we will be facing a recession later this year or next year at the latest. In view of increasing inflation, wage inequality and higher interest rates (all of which are a drag on aggregate demand), I renew such prediction since, as an old judge used to tell me, “Gerald, you can’t get a quart of water out of a pint jar.” From that simplification I would add the following: “You can’t borrow yourself into economic growth with tax cuts.” Time will tell – if we survive.          GERALD        E

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