David Stockman on the Brewing US Debt Ceiling Crisis… TANSTAAFL
Posted by freedomforall 5 days, 2 hours ago to Politics
TANSTAAFL = There Ain't No Such Thing As A Free Lunch [Robert Heinlein]
Excerpt:
"The MAGA folks are going to be in for a rude awakening. That’s because Donald Trump has been taking to the public stage in recent weeks promising a new “golden age” of American prosperity upon his return to the Oval Office, but nearly the opposite is just around the corner. What’s actually coming down the pike is the UniParty’s revenge— a financial and economic shitshow that is likely to dwarf all that has gone before.
There is no mystery as to why. To wit, there is a demolition derby brewing in the bond pits that threatens to extinguish any even faint remaining hope that Washington’s Fiscal Doomsday Machine might be unplugged.
We are referring to the utter fiscal paralysis that stems from the combination of the GOP’s addiction to tax cuts and Big Defense budgets and the Dem’s demagoguery about Social Security, Medicare and the rest of the Welfare State. This means that down on the banks of the Potomac there is virtually no one left in the camp of fiscal rectitude. And, equally importantly, there is no political hay to be harvested by campaigning against the “borrow and spend” proclivities of an overweening central government, which has now become heavily insulated from the daily life of the people as they struggle to pay their bills and ward off the economic imprecations of inflation and taxes.
This embedded fiscal paralysis is actually something new under the sun, however. It was actually far different as recently as the late 1970s. Back then we found plenty of company among the GOP backbenchers in the US House as we launched full-throated political campaigns against the rising public debt and the “modest” rivers of red ink being incurred by “big spender” Jimmy Carter.
We employ the quote marks here because as it has turned out Carter’s biggest annual deficit in constant 2024 dollars of purchasing power was just $240 billion during the recession year of 1980. Given that the Federal deficit clocked in at $367 billion in the month of November 2024 alone, it can be well and truly said that the Washington UniParty is now capable of generating more red ink in 20 days than Jimmy Carter did during his worst year.
...
Moreover, despite the good intentions of the DOGE boys and the alarms about runaway Federal spending and borrowing they are managing to get into the public discourse through X and other alternative media, we still are a democracy of laws. That means without sweeping statutory changes in entitlements and drastically reduced annual appropriations for defense and nondefense discretionary spending alike, the nation’s Fiscal Doomsday Machine will crank forward, pushing the public debt skyward.
In fact, the Madisonian Contraption of deep governmental checks and balances which has served the nation so well over the last 236 years means that on fiscal matters aligning 218 votes in the House, 51 votes in the Senate and a presidential signature is virtually impossible, as will be evident during the first 100 days of the second Trump Administration.
Specifically, the current debt ceiling suspension ended on January 1st and there is no hope of it being extended or lifted in a U.S. House divided by just one vote on a red/blue basis. Rightfully, the 30-40 remaining GOP fiscal hawks are not going to sign-up for an open-ended renewal of the suspension or an outright increase in what will be the nation’s $36.3 trillion debt ceiling. It will surely ignite the greatest game of political “chicken” ever witnessed on the banks of the Potomac."
Excerpt:
"The MAGA folks are going to be in for a rude awakening. That’s because Donald Trump has been taking to the public stage in recent weeks promising a new “golden age” of American prosperity upon his return to the Oval Office, but nearly the opposite is just around the corner. What’s actually coming down the pike is the UniParty’s revenge— a financial and economic shitshow that is likely to dwarf all that has gone before.
There is no mystery as to why. To wit, there is a demolition derby brewing in the bond pits that threatens to extinguish any even faint remaining hope that Washington’s Fiscal Doomsday Machine might be unplugged.
We are referring to the utter fiscal paralysis that stems from the combination of the GOP’s addiction to tax cuts and Big Defense budgets and the Dem’s demagoguery about Social Security, Medicare and the rest of the Welfare State. This means that down on the banks of the Potomac there is virtually no one left in the camp of fiscal rectitude. And, equally importantly, there is no political hay to be harvested by campaigning against the “borrow and spend” proclivities of an overweening central government, which has now become heavily insulated from the daily life of the people as they struggle to pay their bills and ward off the economic imprecations of inflation and taxes.
This embedded fiscal paralysis is actually something new under the sun, however. It was actually far different as recently as the late 1970s. Back then we found plenty of company among the GOP backbenchers in the US House as we launched full-throated political campaigns against the rising public debt and the “modest” rivers of red ink being incurred by “big spender” Jimmy Carter.
We employ the quote marks here because as it has turned out Carter’s biggest annual deficit in constant 2024 dollars of purchasing power was just $240 billion during the recession year of 1980. Given that the Federal deficit clocked in at $367 billion in the month of November 2024 alone, it can be well and truly said that the Washington UniParty is now capable of generating more red ink in 20 days than Jimmy Carter did during his worst year.
...
Moreover, despite the good intentions of the DOGE boys and the alarms about runaway Federal spending and borrowing they are managing to get into the public discourse through X and other alternative media, we still are a democracy of laws. That means without sweeping statutory changes in entitlements and drastically reduced annual appropriations for defense and nondefense discretionary spending alike, the nation’s Fiscal Doomsday Machine will crank forward, pushing the public debt skyward.
In fact, the Madisonian Contraption of deep governmental checks and balances which has served the nation so well over the last 236 years means that on fiscal matters aligning 218 votes in the House, 51 votes in the Senate and a presidential signature is virtually impossible, as will be evident during the first 100 days of the second Trump Administration.
Specifically, the current debt ceiling suspension ended on January 1st and there is no hope of it being extended or lifted in a U.S. House divided by just one vote on a red/blue basis. Rightfully, the 30-40 remaining GOP fiscal hawks are not going to sign-up for an open-ended renewal of the suspension or an outright increase in what will be the nation’s $36.3 trillion debt ceiling. It will surely ignite the greatest game of political “chicken” ever witnessed on the banks of the Potomac."
