A Complete List Of What Trump Can, And Can Not Do, On Day One And For The Rest Of 2017

With the Trump inauguration just over 10 days away, attention has now shifted to what Trump will do the moment he steps foot in the White House, and as The Hill reported this morning, judging by his campaign promises, Donald Trump will be a busy man starting on his first day in the Oval Office: “Trump has pledged to take sweeping, unilateral actions on Jan. 20 to roll back President Obama’s policies and set the course for his administration. Many of Obama’s policies he can reverse with the simple stroke of a pen.”
The Hill then lays out some of the key agenda items in terms of Immigration, Environment, Lobbying, Trade and Healthcare.
The reality, however, is a bit more nuanced than captured in the report, and has to take into consideration not only what Trump’s intentions are, but how they would integrate with Congress, where simply structural limitations could put hurdles ahead of the Trump agenda.
So, for a more comprehensive preview of what Trump can – and can not do – both on day one, and for the rest of 2017, we present a recent analysis by Alec Phillips of Goldman Sachs (which, now that Trump has surrounded himself with Goldman alumni will be as critical when it comes to fiscal policy as Goldman was when it came to advising the Federal Reserve on monetary policy), which notes that the political agenda for 2017 is starting to take shape, with tax reform and Obamacare repeal seemingly at the top of the agenda.
Trump will be delighted to know that both items can be passed without Democratic support via the budget reconciliation process.

This post was published at Zero Hedge on Jan 9, 2017.

We Can Only Afford One, So Choose Wisely: Social Security/Medicare, Cartel Cronyism or Inflation (a.k.a. Central Banking)

Here’s the problem with central banks seeking higher inflation: costs go up but wages don’t.
It’s easy to quantify the annual cost of Social Security/Medicare, and not so easy to calculate the cost of Cartel Cronyism and Central Bank-created inflation. Cartel cronyism is a hidden tax on the entire economy, as is Central Bank-created inflation.
That makes it easy for the financial-political Oligarchy to continue their skimming operations, because nobody says Cartel Cronyism cost us $1 trillion last year, and central bank skimming (inflation) cost us another $1 trillion. The stark reality is there are limits on what we as a nation can afford in the long term. Borrowing trillions of dollars annually at low rates of interest creates a magical-thinking illusion that we can just tack on another $10 trillion, or what the hay, make it $100 trillion, and get away with it, because we’ve gotten away with it so far.
This leaves us an equally stark choice: we can only afford one of these three crushing costs:
1. Limited Social Security/Medicare (no nation can afford unlimited anything, including healthcare)

This post was published at Charles Hugh Smith on THURSDAY, JANUARY 05, 2017.

Democrats, Trump, And The Ongoing, Dangerous Refusal To Learn The Lesson Of Brexit

Submitted by Glenn Greenwald via The Intercept,
The parallels between the U. K.’s shocking approval of the Brexit referendum in June and the U. S.’s even more shocking election of Donald Trump as president Tuesday night are overwhelming. Elites (outside of populist right-wing circles) aggressively unified across ideological lines in opposition to both. Supporters of Brexit and Trump were continually maligned by the dominant media narrative (validly or otherwise) as primitive, stupid, racist, xenophobic, and irrational. In each case, journalists who spend all day chatting with one another on Twitter and congregating in exclusive social circles in national capitals – constantly re-affirming their own wisdom in an endless feedback loop – were certain of victory. Afterward, the elites whose entitlement to prevail was crushed devoted their energies to blaming everyone they could find except for themselves, while doubling down on their unbridled contempt for those who defied them, steadfastly refusing to examine what drove their insubordination.
The indisputable fact is that prevailing institutions of authority in the West, for decades, have relentlessly and with complete indifference stomped on the economic welfare and social security of hundreds of millions of people. While elite circles gorged themselves on globalism, free trade, Wall Street casino gambling, and endless wars (wars that enriched the perpetrators and sent the poorest and most marginalized to bear all their burdens), they completely ignored the victims of their gluttony, except when those victims piped up a bit too much – when they caused a ruckus – and were then scornfully condemned as troglodytes who were the deserved losers in the glorious, global game of meritocracy.
That message was heard loud and clear. The institutions and elite factions that have spent years mocking, maligning, and pillaging large portions of the population – all while compiling their own long record of failure and corruption and destruction – are now shocked that their dictates and decrees go unheeded. But human beings are not going to follow and obey the exact people they most blame for their suffering. They’re going to do exactly the opposite: purposely defy them and try to impose punishment in retaliation. Their instruments for retaliation are Brexit and Trump. Those are their agents, dispatched on a mission of destruction: aimed at a system and culture they regard – not without reason – as rife with corruption and, above all else, contempt for them and their welfare.

This post was published at Zero Hedge on Dec 10, 2016.

Sarah Palin Slams Trump Carrier Deal As “Crony Capitalism”, “Corporate Welfare”

Former Gov. Sarah Palin has criticized President-elect Donald Trump’s deal with the Carrier, in which as reported previously the air conditioner company would not outsource 1,100 workers to Mexico in exchange for $7 million in tax incentives over 10 years, saying that it yet another example of “corporate welfare.” The harsh criticism of Trump’s economic policy comes as she is reportedly under consideration to serve as Trump’s secretary of Veterans Affairs.
Writing an op-ed in the Young Conservatives blog, Palin said that while he is excited for the Carrier employees whose jobs are staying in Indiana, saying the deal is “a relief for hundreds of workers… Merry Christmas Indiana!’, she then joins Bernie Sanders and other critics in vlasting the deal as ‘crony capitalism” and an example of the “hallmark of corruption” and “socialism“, adding the arrangement could set “inconsistent, unfair and illogical precedent.”
Suggesting that the Trump deal is a carryover from the Obama administration’s “crony” ways of doing business, Palin wrote that ‘when government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. Then, special interests creep in and manipulate markets. Republicans oppose this, remember?’
‘Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is on big fail.’
Palin then made a statement many conservatives and virtually all libertarians would agree with, saying that “however well meaning, burdensome federal government imposition is never the solution. Never. Not in our homes, not in our schools, not in churches, not in businesses.’

This post was published at Zero Hedge on Dec 3, 2016.

The Week in Review: December 3, 2016

Fidel Castro died last week, giving the world – or at least those interested in truth – reason to remember the true horrors of communism. Dr. Yuri Maltsev, who visited as a former USSR economist, noted the horrific cost of Castro’s rise to power: ‘To enforce socialist slavery, more than a 100,000 were murdered and millions squeezed out.’ While many in the media and many heads of state seem to prefer to overlook this brutal reality, as Brittany Hunter noted ‘Neglecting to acknowledge the strife endured by the Cuban people during Fidel Castro’s decades-long reign of terror is not only a disservice to the memory of those who suffered, it is also a disservice to history itself.’
Meanwhile in America, President-elect Trump named former Goldman Sachs banker Steve Mnuchin to the Treasury, a curious choice for someone who claims to be draining the swamp. Trump also fulfilled a campaign promise when Carrier Air Conditioning announced they would be keeping hundreds of jobs in the US. While any steps toward tax and regulatory relief should be celebrated, so should the advantages inherent in free trade. American’s should worry less about companies leaving for oversees, and more the way government policies continue to erode their own freedoms, prosperity, and even their chocolate bars.
There is no Mises Weekends this week as Jeff is on the road traveling back from an event with Tom Woods in Orlando. But Jeff will be appearing tonight at 9pm EST with John Stossel on Fox Business Tonight to discuss cronyism is DC and the challenges politics creates in draining the swamp.

This post was published at Ludwig von Mises Institute on December 3, 2016.

30 BLOCKS OF ‘BLACK’ FRIDAY

It’s now been almost three weeks since Donald Trump’s shocking (to mainstream propaganda media outlets) victory over Hillary Clinton and her establishment cronies in the presidential election. Despite an overwhelming electoral victory, the furious liberals and their captured media outlets have been conducting a full court press to somehow overturn the verdict of the American people through intimidation of electors, recounts funded by unknown parties, and Soros funded violent protests in liberal enclaves across the country. Meanwhile those of us who work for a living and pay the taxes, allowing the free shit army to protest at their leisure, have continued to go to work in order to make money to support our families just as we did before Trump was elected.
As I’ve detailed in dozens of previous articles about the 30 Blocks of Squalor, West Philadelphia is a product of the ‘Great Society’ welfare state and sixty years of total Democrat control of Philadelphia government. While white working middle class Americans voted overwhelmingly for Donald Trump on November 8, the reality challenged voters in Philadelphia cast 82% of their votes for a corrupt establishment hack and only 15% for Trump.
The black voters on the 30 Blocks of Squalor, ignored and taken for granted by Democrat politicians since the 1950s, cast 93% of their votes for Crooked Hillary. It is baffling how these people would continue to vote for their own servitude, trapped in squalor, dependent upon the state for survival, and wallowing in ignorance produced by government indoctrination public schools.

This post was published at The Burning Platform on November 27, 2016.

Week in Review: October 29, 2016

Obamacare premiums are exploding, just as mises.org has long predicted. Another disastrous example of politicians discarding basic common sense in passing through legislation to address a problem they themselves have created. Unfortunately there is little hope of politicians learning from their mistakes, as they continue to push through bill, after bill, after bill that expands their influence at the expense of the market and human freedom. No wonder public faith in elections is collapsing as the reach of the state grows larger. Hopefully this growing distrust can spur a libertarian populist awakening, leading to the spread of the ideas that make civilization prosperous.
The Mises Institute will further discuss the collapsing public trust in politics next weekend during our Dallas-Ft. Worth, Mises Circle. You can join Jeff Deist, Lew Rockwell, Robert Murphy and our other great speakers in person, or follow the event live at Mises.org/live.
On Mises Weekends, Jeff is joined by Nomi Prins, a prolific writer and speaker on the subjects of central banking, financial markets, and Wall Street cronyism. She is a former managing director at Goldman Sachs and Bear Stearns, but left investment banking to speak out against what she perceives as global financial malfeasance by commercial, investment, and central banks. Nomi is a dedicated progressive who supported Bernie Sanders, but she’s also a harsh critic of the Fed and sympathetic to Austrian depictions of malinvestment and artificially-created bubbles.

This post was published at Ludwig von Mises Institute on October 29, 2016.

The Clinton Syndrome: The Establishment’s Weapon for National Conquest (Part 1)

IRD is pleased to present the next Stewart Dougherty guest post. In this analysis, SD defines and analyzes a phenomenon that most of us find thoroughly confounding: how can anyone with two brain cells possibly vote for Hillary Clinton?
‘There never was a democracy yet that did not commit suicide.’ – John Adams, 2nd President of the United States of America
The 2016 United States presidential race was never intended to be an election. Rather, it has been psychologically engineered from the beginning to be a for-profit overthrow of America by an increasingly powerful and predatory establishment cabal, which seeks not just power, but full-spectrum dominion over the nation’s people, wealth and institutions. It has been rigged to be the exact opposite of an election: namely, a planned regime change that will then falsely be called after the fact an ‘election outcome,’ ‘popular mandate’ and ‘expression of the will of the people.’ It will deliver a multi-trillion dollar post-’election’ payday to the establishment insiders who have orchestrated it and nothing but ongoing misery for the people. This ‘election’ is a carefully crafted coup that will result in the progressive annihilation of American freedom and liberty, personal and financial, for all citizens except those within the Establishment’s reach.
The longstanding purpose of this election has been to impose upon the people a new national operating system that we have named ‘Crony Communism.’ (This theme is detailed in our previous article entitled: ‘Crony Communism: Hillary Clinton’s Game Plan for America.’ – LINK). To effect this regime change, a new psychological syndrome was engineered, using proven techniques that predictably alter the thinking patterns and decision making capabilities of susceptible individuals. Psychological engineering is not science fiction; it is real, powerful and now, and its direct effects are being exhibited today by tens of millions of voters throughout the country.
The economic implications of the coming regime change will be monumental – and the financial effects on individuals severe – if people do not take steps now to prepare and protect themselves. We will offer some suggestions in this regard in a follow-up article (Part 2). Our objective in this article is to give you a clear understanding of what is happening, at least as we see it.

This post was published at Investment Research Dynamics on October 24, 2016.

THIS EMAIL PROVES OBAMACARE IS MEANT TO FAIL IN ORDER TO USHER IN GOVERNMENT-RUN SOCIALIST HEALTH CARE

Who can keep up with all the revelations coming out of over 10,000 of Hillary camp chairman John Podesta’s leaked emails?
It’s actually a brilliant strategy to give people corruption fatigue because it’s so many revelations so quickly that, just like the Snowden leaks, it overwhelms people and they shut down. Toss something about learned helplessness in there, and we’re about on target for what’s going on with Hillary right now. It’s actually pretty amazing she’ll be able to show her face at the debates tonight.
But this particular email is key to just how utterly fake and fraudulent our government really is.
Remember when Nancy Pelosi infamously told Congress they’d have to pass the Affordable Care Act bill so they could find out what was in it?
Check this out:

This post was published at The Daily Sheeple on OCTOBER 19, 2016.

Crony Communism: Hillary Clinton’s Game Plan For America

‘The goal of socialism is communism.’ Vladimir Lenin
Inferential Analytics (IA), the forecasting method we have created and use, has generated a new theme. IA themes define significant macro developments that are in progress. IA themes almost always become full-blown realities in time. This is our first article about the new theme, which is particularly threatening and disturbing.
If this theme develops as the IA model projects, the resulting new reality will have a profound effect on every United States citizen living either within or outside the country. (U. S. citizens are taxed no matter where in the world they reside.) While the entire American experience will be re-shaped by this new reality, citizens’ financial freedom, and therefore their overall liberty is particularly at risk. This theme extends beyond the United States, especially to Europe, but in this article we will focus on the U. S. situation.
Before introducing and detailing the new theme, here is some context.
Until now, the United States has been able to fund its massive, structural deficits and debts by leveraging its unique position as issuer of the world’s reserve currency, the dollar, frequently referred to as the petrodollar. The dollar’s reserve privilege has enabled the nation to artificially enhance America’s financial quality of life by creating out of nothing colossal quantities of the currency. By perpetuating a system that forces other nations to use the dollar, strong, unnatural demand has kept the currency from imploding in value despite its hyper-creation.

This post was published at Investment Research Dynamics on October 16, 2016.

Is Obama Juicing Government Spending To Get Hillary Elected?

During the last year of his reign of error, our beloved Nobel Peace Prize winner, Obama ran out of government accounting gimmicks to falsely proclaim Federal deficits have been falling. His legacy of debt accumulation will go down in history as the last dying gasps of a crumbling empire built upon Keynesian delusions, political corruption, and a Deep State establishment hellbent upon retaining power at the cost of global war and financial collapse.
The entirely fabricated government propaganda data point known as the Federal deficit skyrocketed by 34% in fiscal 2016 (Federal year is Oct. 1 to Sept. 30). The reported deficit in FY15 was a mere $438 billion. Obama and his brain dead minions had boasted about such a small deficit. The country has been in existence for 227 years and Obama had the balls to boast about ‘achieving’ the 8th highest deficit in our history. Just for some context, the savior also led the country to the 1st, 2nd, 3rd, 4th, 5th, and 6th highest deficits in the country’s history. Bumbling Bush achieved the 7th highest in the glorious year of 2008.
The $149 billion surge in the reported deficit to $587 billion is a national disgrace and happened during a year in which we supposedly aren’t waging any real wars. Even with artificially suppressed interest rates, interest on the national debt went up by $30 billion. The Obamacare abortion has caused healthcare spending to soar, blowing a hole in the Federal budget. Remember Obama bloviating about Obamacare not adding one dime to the national debt? He was right. It’s adding trillions of dimes to the national debt. But, at least every family in America has gotten that promised $2,500 savings in their annual premiums. Right?

This post was published at The Burning Platform on October 16, 2016.

‘Completely Unsustainable’: Obamacare Destroys Middle Class, Rising As Much as 67%. Just in 2017.

Minnesota is in good company.
Like dozens of other states across the country, its government-mandated health care exchange is facing steeply-rising premiums for individual plans at levels that are both outrageous and completely impossible for the average Middle Class family to pay or keep up with.
And as future rates continue to rise – and it’s going to hurt a lot of people.
Because the system was designed to fail; or, because the government and health care lobbies have so little regard for the people that will actually have to live and die by their rules, the prices are skyrocketing by more than 50% in Minnesota – and by similarly absurd numbers in other states – and the exchange narrowly avoiding collapsing altogether in 2017.
via the Daily Caller:
Minnesota will let health insurers increase their rates by at least 50 percent next year to protect the state’s Obamacare health insurance individual market from ‘collapse,’ the state announced Friday.

This post was published at shtfplan on October 3rd, 2016.

Seeking Affordable Care, Markets Sidestep Obamacare

The American health care system had become the perfect poster child for cronyism long before Obamacare went into effect. Insurance companies, health care providers, and the government have become so intertwined, it’s almost impossible to discern where one ends and the other begins.
While candidates of all ideological persuasions campaign on replacing, repealing, maintaining, or even expanding Obamacare, at this point public and private health care institutions have become so entangled there is almost no feasible way to untie the knot.
Instead of looking to Washington to fix a problem they are at least partially responsible for creating, the private market has taken matters into its own hands by providing options.
The Surgery Center of Oklahoma, for example, discovered that in order to offer patients the best quality care for the lowest possible prices, they were going to have to opt out of the traditional health care system all together.
Prospective patients visiting the center’s website will notice that each procedure offered comes with its own set price tag. By choosing not to accept any insurance policies, the Surgery Center of Oklahoma is able to set its own prices, which often end up being more affordable than services rendered through a traditional hospital and then processed through a third-party insurance company.

This post was published at Ludwig von Mises Institute on Sept 29, 2016.

Apple Tax Grab by EU Invades IRS Airspace

On August 30th, the European Union (EU) Commission ordered the Irish government to reclaim some $14.6 billion of so-called back taxes plus interest from Apple Inc. The order challenged sovereign tax authority within the EU and well-established international tax rules. The aggressive stance of the Commission set off a furor of high level political argument among taxing authorities and multinational companies accustomed to complex but legal international tax planning. Apple’s case was big enough to place it at center stage in a simmering problem for governments in striking a balance between attracting businesses, creating jobs, generating taxes and deciding precisely what type of earnings can be taxed.
In a testament to how strange the taxing regimes have become, the Irish government has protested loudly and is reluctant to take the nearly 15 billion the EU says it is entitled. When small countries turn down such sums, it should be clear that the stakes are much higher.
With uncontrolled socialism and Keynesian monetary policies killing economic growth around the world, governments have ever greater need to wring revenue from the relatively stagnant pool of corporations and wealthy individuals. While the crackdown on personal tax havens, in Switzerland and the Channel Islands for instance, has been largely successful, corporations have become extremely adept using legal loopholes and creative international accounting to move revenues from high tax jurisdictions to countries where rates are lower. As of October, Reuters reported that U. S. based companies have some $2.1 trillion parked abroad in order to avoid high domestic taxes. Apparently Apple, the world’s largest company by market capitalization, accounts for over $180 billion of this total.
The U. S. corporate tax rate of 35 percent is widely considered to be uncompetitive and even excessive when compared with Ireland’s 12.5 percent rate (and even the 20 percent in the UK). It is an old adage that capital flows to where it is treated best. Ireland rolled out the red carpet for Apple, a decision that greatly benefited both.
Apple established a company in County Cork, Ireland in October 1980, sometime before Apple blossomed financially. Since then, Apple has become one of the largest taxpayers in the world and, according to its CEO, Tim Cook, the largest taxpayer in Ireland where it employs almost 6,000 people, mostly in high paying jobs, adding great benefit to the Irish economy both directly and by encouraging copycat corporations. (A Message to the Apple Community in Europe, 8/30/16)

This post was published at Euro Pac on September 15, 2016.

Trump’s New Deal: ‘Hillary Offers A Welfare Check, I Will Produce Paychecks’

In terms of rhetoric, which has historically made major departures from actions, this campaign boils down the economic uncertainty that is enveloping this nation.
With millions of people out of work, worried about finding employment or facing grave doubts about a future transformed by technological labor, Trump is honing in on the most psychologically pressing issues on the minds of the real Americans in flyover country.
They are the ones who are feeling the hurt financially, not Wall Street.
It is they who must be convinced to support the government again.
The politics of Obama and Hillary have left large portions of the country feeling alienation, and angry at their government. That growing sense of dissatisfaction has been fueled by the unethical tactics of those in power. Lying and corruption has gone way too far.
It has affected them personally.
And whether Donald Trump will prove himself in hindsight or not, he is masterfully tapping into that sentiment in a way that Hillary Clinton cannot even pretend to attempt.
Trump’s speech in front of the Economic Club of New York highlighted the choice between a declining welfare state and an economy that is booming and providing good paychecks. How does that sound to Ford workers who just lost another factory to Mexico? Or to the thousands of other rust belt Americans who face a similar predicament?
As Real Clear Politics reported, :

This post was published at shtfplan on September 15th, 2016.

Thanks, Obamacare! Average Employer Family Plan Now Costs $18,000

The average cost of health coverage offered by employers pushed above $18,000 for a family plan this year, though the growth was slowed by the accelerating shift into high-deductible plans, according to a major survey.
Annual premium cost rose 3% to $18,142 for an employer family plan in 2016, from$17,545 last year, according to the annual poll of employers performed by the nonprofit Kaiser Family Foundation along with the Health Research & Educational Trust, a nonprofit affiliated with the American Hospital Association.
Employees paid 30% of the premiums for a family plan in 2016, compared with 29% last year, according to Kaiser. For an individual worker, the average annual cost of employer coverage was $6,435 in this year’s survey, with employees paying 18% of that total. The change in annual premium for individual coverage from 2015 wasn’t statistically significant.
Economists have long debated the reasons for the slow pace of growth in premiums, which has continued for several years. Some have argued that the limited rate of increase is primarily linked to aftereffects of the recession and continued economic uncertainty.

This post was published at David Stockmans Contra Corner By ANNA WILDE MATHEWS, Wall Street Journal ‘ September 15, 2016.

Latin America’s Pink Tide Crashes on the Rocks

Ten years ago, South America was witnessing the rise of what came to be known as the “pink tide.” Characterized by an allegedly kinder and softer version of socialism than the “red” communism of Castro’s Cuba, the pink tide had begun with the election of Hugo Chavez in Venezuela in 1998, followed by the election of Lula da Silva in Brazil in 2002, and followed by the rise of the Kirchners in Argentina in 2003. The tide continued to roll in with the election of Evo Morales in Bolivia in 2006, and Rafael Correa’s election in Ecuador in 2007.
As these new leftist candidates gained traction, their success was said to herald a new era of leftist politics in South America that would bring to an end the “neoliberal” consensus and impose a new, more humane economics on Latin American society.
Eighteen years after Hugo Chavez’s inauguration, things haven’t gone quite as planned.
The economy of Venezuela is in seemingly terminal decline with riots, shortages, and enforced slave laborimposed in an attempt to force more production out of the population. Meanwhile, the economies of Brazil and Argentina – while not comparable to Venezuela – are among the worst in Latin America, with Brazil heading for its its worst depression since 1901.
As economies worsened, corruption and authoritarian tactics worsened as well. Venezuelans have gotten the worst of it with citizens groaning under the weight of a police state that shuts down small business and persecutes even the smallest entrepreneurs for alleged economic “crimes” such as being a “class traitor.” In her final years, Kristina Kirchner became increasingly autocratic and paranoid, going so far as to prosecute and impose fines on economists who made economic forecasts the Argentinian state found to be be unflattering. Meanwhile in Brazil, corruption reached new heights as President Rousseff – the pink-tide successor to da Silva – attempted to save the economy and her political career by showering her political allies with “stimulus” cash.

This post was published at Ludwig von Mises Institute on Sept 8, 2016.

WHY 2017 is The Threshold to Chaos

I have been warning that 2017 was the Year of Political Hell with four major referendums/elections that would undermine the confidence in government – BREXIT, US Presidential Elections, French Elections, and Germany Elections. These four events hold the potential to overturn the expectations of the future. Whatever the general public felt about government would flip. The key to a shift from Public confidence to Private lies within the scope of these four elections. This is what our computer has been forecasting – political instability on the rise. This is the age of anti-establishment (3rd party) rising globally.
However, I have also warned that Social Security and Medicare go NEGATIVE next year in the United States, which of course mainstream media is not bothering to report for fear that would add fuel to the bonfire of political corruption. But what is also not explained by mainstream media, is that Obamacare is crumbling from within. The entire structural design of Obamacare was the perpetual Ponzi Scheme they used for Social Security.

This post was published at Armstrong Economics on Sep 7, 2016.

The ‘Myth Of Morning In America’ – – How The Public Debt Went From $1 Trillion To $35 Trillion in Four Decades, Part 2

Morning in America – the Historical Inflection Point
……. And that was the historical inflection point. Thereafter, Social Security and Medicare entitlement reform was off the table due to the trick of the front-loaded payroll-tax increase.
This caused cash surpluses in the trust funds and the accumulation of intra-governmental accounting IOUs for the next two decades. At the same time, these front-end surpluses functioned to bury the long range fiscal disaster these intergenerational ‘social insurance’ entitlements embody in 75-year projections that are always way too optimistic.
Likewise, the White House took any further tax increases or defense cuts off the table in January 1985. The spending-cut-weary politicians of both parties, in turn, were more than happy to oblige by shelving any further meaningful domestic spending reforms, as well.
So in 1985, fiscal policy went on automatic pilot – where it has more or less languished ever since. Even well before the fiscal madness of George W. Bush broke out in 2001, the handwriting was on the wall.

This post was published at David Stockmans Contra Corner on September 2, 2016.