{"id":1026035,"date":"2018-09-19T12:57:42","date_gmt":"2018-09-19T12:57:42","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=1026035"},"modified":"2018-09-19T12:57:42","modified_gmt":"2018-09-19T12:57:42","slug":"who-killed-the-deficit-hawks-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1026035","title":{"rendered":"\u201cWho Killed the Deficit Hawks?\u201d"},"content":{"rendered":"

By Brian Maher<\/a><\/span> <\/p>\n

This post \u201cWho Killed the Deficit Hawks?\u201d<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Guns. Butter. Bread. Circuses.<\/p>\n

And debt.<\/p>\n

These the American people were treated to in heaping doses yesterday\u2026<\/p>\n

The United States Senate voted 93-7 in favor of a generous<\/em> $854 billion spending bill.<\/p>\n

An \u201cunprecedented government spending spree\u201d is how one site styles it.<\/p>\n

The war hawks get $606 billion for guns\u2026 the sob-mongers get $178 billion for bread and butter.<\/p>\n

The spectacle itself is the circus, offered up in half a dozen rings.<\/p>\n

In the absence of a deal, the government would have partially \u201cshut down\u201d Oct. 1.<\/p>\n

Next week the bill \u2014 and \u201cbill\u201d is just the word for it \u2014 goes to the House for the rubber stamp.<\/p>\n

From there it proceeds to the presidential desk, where it will acquire the looping signature of Donald John Trump.<\/p>\n

\u201cWho killed the deficit hawks?\u201d wonders Nick Gillespie, editor of Reason.<\/em><\/p>\n

We noted last week that federal spending has increased 7% this fiscal year\u2026 while tax revenues have increased only 1%.<\/p>\n

The Congressional Budget Office (CBO) estimated earlier this year that the budget deficit would exceed $1 trillion in 2020.<\/p>\n

But merely last week it announced the deficit would exceed $1 trillion next year \u2014 one year ahead of schedule.<\/p>\n

Meantime, federal debt is rising perhaps three times the rate of revenue coming in.<\/p>\n

U.S. public debt excels $21 trillion\u2026 and swells by the day.<\/p>\n

Who killed the deficit hawks, indeed\u2026<\/p>\n

For the long-term consequences we turn to the Brookings Institute:<\/p>\n

\n

Sustained federal deficits and rising federal debt, used to finance consumption or transfer payments, will crowd out future investment; reduce prospects for economic growth; make it more difficult to conduct routine policy, address major new priorities or deal with the next recession or emergencies; and impose substantial burdens on future generations. <\/em><\/p>\n<\/blockquote>\n

To simply maintain current debt levels, CBO estimates Congress would have to increase revenues 11% each year\u2026 while simultaneously hacking the budget 10%.<\/p>\n

Will Congress spend 10% less each year?<\/p>\n

The pig in his sty will first sprout wings\u2026 and take to the aerial ways.<\/p>\n

We furthermore have reason to believe America’s fiscal descent will accelerate this November\u2026<\/p>\n

Online odds maker FiveThirtyEight currently allots the Democratic Party a 79.5% chance of seizing the House in the midterm elections.<\/p>\n

Assume for the moment it does.<\/p>\n

Perhaps you recall Trump’s campaign pledge to tackle America’s ancient infrastructure?<\/p>\n

Former Trump economic adviser Gary Cohn predicts the president will join Congress to hatch a \u201cmassive debt-fueled infrastructure bill.\u201d<\/p>\n

Cohn, telling Reuters:<\/p>\n

\n

If the Democrats win the House I will be shocked if the first thing they don’t do is infrastructure. I think they’ll do a trillion dollars, trillion and a half dollars of infrastructure, and the president will sign it.<\/em><\/p>\n<\/blockquote>\n

Why so willing to get down on all fours with the Democrats who are hot for his scalp?<\/p>\n

\n

The president looks at these economic decisions in a very simple lens: \u201cI want to grow the U.S. economy, I want to create jobs, I want to create wage growth.\u201d If the federal government can do something that helps [him] accomplish those three things, he will be 100% inclined to do it. I mean, that’s literally how he looks at it.<\/em><\/p>\n<\/blockquote>\n

We look at it an stagger, dizzied by the prospects of another trillion dollars of debt.<\/p>\n

\u201cAnother trillion in debt, here we come,\u201d Cohn concludes.<\/p>\n

Does America’s infrastructure require emergency surgery?<\/p>\n

Then let it have it.<\/p>\n

The bridge must not collapse\u2026 the pothole is a menace\u2026 the broken water main is a grand migraine.<\/p>\n

But in a time of budgetary surplus these would be seen for what they are \u2014 necessary expenses.<\/p>\n

It is only when we cannot afford them, when the national strong box is empty\u2026 that they masquerade as \u201cinvestments.\u201d<\/p>\n

In the 1990s Japan undertook many similar \u201cinvestments\u201d to lift it from its economic wallows.<\/p>\n

Infrastructure projects proliferated nationwide. One end to the next, the Japanese islands were blanketed with concrete.<\/p>\n

The results?<\/p>\n

A \u201clost decade\u201d \u2014 lost decades, in candor.<\/p>\n

The Japanese economy has scarcely improved an inch\u2026 and the Bank of Japan is still hard at the business of \u201cstimulating\u201d the economy.<\/p>\n

Coming home, American GDP growth has averaged some 2.1% since 2010.<\/p>\n

Meantime, CBO currently projects American economic growth to limp along at an average 1.9% per annum for the next decade.<\/p>\n

In contrast, average annual growth of 3% or more was common before the great gale of 2008.<\/p>\n

One percentage point may not appear dramatic \u2014 and one year to the next it is not.<\/p>\n

But multiply it by five years, 10 years, 20 years\u2026 and you will acquire a grim lesson in the meaning of compounding interest \u2014 negative compounding interest.<\/p>\n

If America doesn’t lick its debt\u2026 it is a lesson its current generation of youth may learn good and hard\u2026<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/em><\/p>\n

The post \u201cWho Killed the Deficit Hawks?\u201d<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

…read more<\/a> <\/p>\n

From:: Daily Reckoning<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Brian Maher This post \u201cWho Killed the Deficit Hawks?\u201d appeared first on Daily Reckoning. Guns. Butter. Bread. Circuses. And debt. These the American people were treated to in heaping doses yesterday\u2026 The United States Senate voted 93-7 in favor of a generous $854 billion spending bill. An \u201cunprecedented government spending spree\u201d is how one […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[366],"tags":[],"class_list":["post-1026035","post","type-post","status-publish","format-standard","hentry","category-dailyreckoning"],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1026035","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1026035"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1026035\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1026035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1026035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1026035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}