David Stockman, the former Reagan Administration White House Budget Director, says the economy will soon collapse and suggests March might be the month.
It doesn’t take an expert to realize America’s bubble economy will soon collapse, but here’s one to explain it:
From the YouTube notes:
Former White House Budget Director David Stockman drops a bomb in his latest interview by saying, “I think what people are missing is this date, March 15th 2017. That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015. That holiday expires. The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. There will not be Obama Care repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”
Of course, timing a soon collapse with absolute certainty is impossible. If anyone had a way of analyzing all the relevant data and calculating the timing, they would then act upon that knowledge, and change the relevant data. No one can be certain when the game of musical chairs we have been playing with the economy will end. I wouldn’t be surprised if Trump and Congress raise the debt ceiling despite Stockman’s reasoning.
None of this is Trump’s fault, though the enemy media will blame it on him. Tyler Durden writes at Zero Hedge:
As Greg Hunter writes, former Reagan Administration White House Budget Director David Stockman says financial pain is a mathematical certainty. Stockman explains, “I think we are likely to have more of a fiscal bloodbath rather than fiscal stimulus. Unfortunately for Donald Trump, not only did the public vote the establishment out, they left on his doorstep the inheritance of 30 years of debt build-up and a fiscal policy that’s been really reckless in the extreme. People would like to think he’s the second coming of Ronald Reagan and we are going to have morning in America. Unfortunately, I don’t think it looks that promising because Trump is inheriting a mess that pales into insignificance what we had to deal with in January of 1981 when I joined the Reagan White House as Budget Director.”
That “debt build-up” was used by Barack Obama, when he came to office to dramatically increase it, to prop up the stock market. The market is doing even better now, thanks to confidence in Trump, but the damage can’t be undone.
The fact that the Federal Reserve continued to pump up the stock market during Obama’s reign, didn’t mean the economy was sound. While we can’t know the timing, we can be certain it will soon collapse and start a major recession.