Thursday, March 2, 2017

Stockman: "Trump Will Create A Debt Crisis Like Never Before"

Former Reagan Budget Director David Stockman told Fox Business' Neil Cavuto:
I've thrown in the towel because he [Trump] is not paying attention and he’s not learning anything and he’s making ridiculous statements...

We don’t need a $54 billion increase in defense when the budget already is ten times bigger than that of Russia. We don’t need $6 trillion of defense spending over the next decade because China is going nowhere except trying to keep their Ponzi scheme together...

If you look at the Ryan draft that came out over the weekend, it’s basically Obamacare-lite. It’s not really repealing anything.

It’s basically reneging and turning the Medicaid expansion into a block grant, turning the exchanges into tax credits [and] it’s still going to cost trillions of dollars...
I don’t think we will see the tax cuts this year at all. Not a chance. 
There is going to be a debt ceiling crisis like never before this summer and that’s what people don’t realize. They’ve burned up all the cash that Obama left on the balance sheet for whatever reason.

Resource: Definition of Reconciliation (US Congress)

(ht ZeroHedge)


  1. Other than the debt owned by China and other countries, how much is 'owned' by the federal reserve? Can it simply be expunged from the books. It was created or purchased out of thin air and could go back to where it came.

    I'm just asking the question. I to would prefer Constitutional money and a more honest accounting system.

    1. About 2.8 trillion is held by Federal Reserve Banks. In theory, you could drop the intra-government debt too, if you're looking forward to interesting accounting tricks in the next 25 years.

    2. According the MMTers, the government sells the bonds, gets the money and spends it fast (because otherwise society would crumble under laissez faire). When it buys back the bonds, it uses newly created computer money which did not exist before, which is obviously cost-free. My kids tell me they can't tell when I'm joking.

    3. I note that the video on YouTube has more thumbs down than thumbs up. The Trumpsters are up in arms because someone is picking on the God-Emperor. Just a spending slashing hard money nobody like Stockman.

      Mr. Wenzel was correct in predicting that the Trumpsters would not be inclined to hold the God-Emperor in check.

  2. I like David Stockman; a bright and sensible man.