I’m going to spell out why Donald Trump needs to be impeached immediately.
In general, I find Trump’s policy to only make sense if you view it as a number of independent policies that do not take each other into consideration. That would make sense if the various corporate leaders put into his administration each had their own agendas.
Gary Cohn cared about tax cuts.
On Friday, August 18, Gary Cohn flew by helicopter from East Hampton, Long Island, to Morristown, New Jersey, where it was raining heavily. He had to wait on the tarmac to get clearance to Bedminster. He was carrying a resignation letter. This was too much. Someone had put a swastika on his daughter’s college dorm room.
Trump turned to trying to make Cohn feel guilty. “You are driving our policy and if you leave now, taxes are over. You can’t do this.” Cohn had spent months working a tax cut plan and was in the middle of negotiations on the Hill, a massive, complex undertaking. “How could you leave me hanging like that?”
“Sir, I don’t ever want to leave you hanging. I don’t want anyone to ever think I betrayed them. I have a reputation I care more about than anything in the world. I’m working for free here in the White House. It’s not about money. It’s about helping the country. If you think I’m betraying you, I will never do that.” And relenting, he added, “I will stay and get taxes done. But I can’t stay here and say nothing.”
Fear, Trump in the White House — Bob Woodward
Gary Cohn got his tax cuts in November 2017 and resigned in March of 2018.
Pruitt hated the EPA. Stephen Miller doesn’t like immigrants. Rick Perry wanted to abolish the department of energy. Tillison wanted to work with countries related to the oil industry. Each given the opportunity to influence the area they care about.
When you’re looking at a government, Taxes are their revenue. If you have negative cash flow and you cut revenue, things will get worse.
Here’s where we are:
The collective IOU had been rising steadily for decades but took a sudden leap in the years after the financial crisis as the government opened the financial spigots in an effort to spur growth.
President Barack Obama’s administration racked up nearly as much debt in eight years than in the entire 232-year history of the country before he took office. He entered with $10.6 trillion in total debt and left with the country owing $19.9 trillion. That’s an average tab of $1.16 trillion a year.
Under President Donald Trump, the debt also has climbed. The $2.06 trillion increase works out to about $991 billion a year, or slightly less than the pace Obama had set.
That $22 trillion national debt number is huge, but here’s what it really means
National debt for the first time passed $22 trillion this week - a big, scary number that really doesn’t pose much of a… www.cnbc.com
The yearly deficit is roughly $1.2T right now.
This $1.2T is held in bonds of varying sizes and terms going back decades. Since we’re spending more than we’re bringing in, we’re paying off the old debt and immediately borrowing again at the new terms.
That debt is held in a variety of ways, including money borrowed against our Social Security. Right now I’m mostly interested in the Public Debt though:
Public Debt. The public holds the rest of the national debt of $16.1 trillion. Foreign governments and investors hold 30 percent of it. Individuals, banks, and investors hold 15 percent. The Federal Reserve holds 12 percent. Mutual funds hold 9 percent. State and local governments own 5 percent. The rest is held by pension funds, insurance companies, and Savings Bonds.
Foreign — $6.2 trillion. In June 2018, China owned $1.18 trillion of U.S. debt and Japan owned $1.03 trillion. That’s more than one-third of foreign holdings.
$6.2 trillion of our debt is owned by foreign governments. 1/3rd of that by China and Japan. We are dependent on having a market for our bonds, and they are both significant players.
The bonds have low interest rates, but they are a “safe” investment because they are backed by the US government. If something causes them to be considered riskier, interest rates may rise. As more and more of the debt is at the new higher rate, the debt itself would accelerate unless we can increase the revenue.
Separate from the debt, Trump is launching trade wars. Market dynamics are changing as both sides adjust rules, helping some players and hurting others as both sides levy new tariffs. Ultimately a tariff is a tax paid by the importer who will pass that cost onto consumers.
Trump has also had an off an on public spat with Kim Jong-un, who is an ally of China and has terrible relations with Japan. As a result, China is in an unenviable position and Japan has had missiles flying overhead.
All of this adds uncertainty. It adds risk, and makes US bonds less of a sure thing, potentially requiring higher interest rates.
His lack of consistency across policies has potentially disastrous repercussions.