American Consequences - December 2017

And that’s just the federal debt that we’ve created in this generation. On a per-capita basis, federal debt has more than tripled since 2000. The ongoing debt explosion is finally reaching its peak... These rising costs are going to have a profound effect on the current widespread political belief that “deficits don’t matter,” just as soaring default rates on consumer lending are going to lead to much tougher lending standards on cars, colleges, and credit cards. All of that consumption that we’ve enjoyed on credit for the last decade is going to come back to haunt us. We’re heading full steam into the biggest credit-default cycle in our nation’s history. Tax reform... or simply a bigger national debt? By the time we go to press, Republican legislators hope to wrap up a final, revised tax agreement. They’re reportedly hoping to have a bill on President Donald Trump’s desk not long after. But delays continue to hinder the process, so the final timeline isn’t clear. On the campaign trail, Trump correctly noted that Wall Street was dealing with a massive bubble that had been inflated by irresponsible monetary policy. He mocked official unemployment statistics as meaningless. He promised to “drain the swamp” if elected president. Almost a full year into office, Trump is now taking credit for the record gains in the stock market and bragging about the same low unemployment. When it comes to monetary policy, Trump

failed to make any real change when he had his first chance. Instead of shaking things up with a radical appointment, Trump chose Jerome Powell as the next Fed chairperson... Powell is a D.C. Beltway lifer who shares many of the same views as current chair, Janet Yellen. In other words, we’ll be getting more of the same from the Fed after Yellen leaves. That just shows the real power in Washington lurks behind the scenes. And it brings us back to the reality of what Americans should expect with Trump’s tax-reform plan... With the country’s total debt already at more than $20 trillion – about $62,000 per U.S. citizen – to put it simply, the only thing this tax cut will do is add to our national debt... Once again, the can will be kicked down the road. The plan will add another $1.4 trillion to our total debt over 10 years, according to Congress’ Joint Committee on Taxation. And this new tax plan won’t help the middle class. The real cuts – $1 trillion worth – will go to corporations. Another $100 billion will reduce estate taxes for the wealthy. That leaves about $300 billion for the rest of the population. Supporters of the tax-reform bill claim these cuts will lead to new jobs, wage increases, and capital investments, but don’t be fooled... Corporations are already admitting these tax cuts won’t change their strategies going forward. Which leaves us with two questions, “What the hell will change? And when will that change happen?” (Alas, we already know the answer to a third question: “Will it be a change for the better?” No.)

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