It’s official. The White House says its tax cut didn’t pan out the way it expected.
Instead of a projected deficit of $526 billion in 2019, the Office of Management and Budget now estimates Trump’s proposed budget would lead to a deficit of more than twice that much — over $1 trillion.
From The Fiscal Times:
‘The White House Office of Management and Budget on Friday released its updated annual budget request, known as the mid-session review. The numbers… contain what the Committee for a Responsible Federal Budget calls ‘a very big trillion-dollar admission.’ Namely, the White House’s own deficit projections keep rising, thanks to the recently passed tax cuts and spending increases.’
But what else is the administration wrong about? Probably just about everything.
Good ol’ days
Growth will be lower than expected…no more than it was under Obama.
Deficits will be higher.
And the wars — against drugs, terror, poverty, and now trade — will all be lost, not won.
There was a time you could go to war…conquer some other nation…take their fertile women as concubines…their men and children as slaves…and their land and all their portable property.
Those were the good ol’ days!
But they’re gone.
Imagine Attila trying to take women by force today. Imagine Genghis running his Five Guys and cable companies with slaves. Imagine Tamerlane rampaging through Iowa…or Alexander the Great besieging Baton Rouge.
Alas, today, all wars are losers because today’s world is fundamentally one of cooperative exchanges.
Real wealth is created by robust networks based on win-win deals. And real wealth is what gives you the technological ability to blow the other guy sky-high.
In other words, you can live with win-lose, but you will live in poverty and backwardness.
And if you get enough of those win-lose deals over a long enough time, you’ll end up walking on all fours…with the win-win guys throwing you scraps of food.
In Trump’s trade war, for example, winning would be the worst thing that could happen.
China is the fastest-growing large economy in the world…the biggest customer for raw materials…the biggest supplier of ‘everyday low price’ goods for Americans…
And it has the biggest trade surplus, which it happily recycles into loans to America and other foreign countries.
In other words, when China goes down, most likely, the whole world economy will go down with it.
Then, we can wave our flags…give a big whup of victory…and savour our poverty like a well-prepared roadkill dinner.
But we’ll come back to finance. First, let’s recall what we did this weekend.
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Stand clear
We’re trying to put a tin roof on an old barn. Two of our boys came over to help, bringing a couple of our grandchildren with them.
It looked easy enough. All we had to do was clean off the top of the wall, reset some stones, and put on a wood plate on which we could attach our rafters.
But when we got up and had a closer look, we discovered that the roots of a tree that had grown into the wall had penetrated so deeply that it was impossible to get them out without destroying the wall itself.
Seeing no alternative, we tied a rope to the stump of the tree and hooked it to the tractor. Then, we pulled…hoping that only the top courses of stone would come down with the roots.
‘Stand clear,’ went out the order.
And then, to the delight of the grandchildren, as the tractor began tugging, we saw the whole wall bulge out and come loose…as if it had been undermined by an earthquake.
A big portion of it collapsed onto the ground, in a heap of stones, roots, dust, and dirt.
‘Oooh, you got yourself a bigger job than you expected,’ said Alan, the contractor working on our house nearby. ‘Can you handle all that masonry?’
‘No problem,’ we assured him. ‘We like laying stones,’ we added. Behind us, our two sons shook their heads, side to side.
‘Well…it looks like there’s a difference of opinion on that one.’
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Bill’s grandchildren help with the masonry on the old barn |
Normally, we find stone masonry relaxing and rewarding. Each stone has its place. Once in position, it stays for a long, long time.
But these stones need to be lifted to the top of a two-story wall, along with the cement to put them in place. And it all has to happen fairly fast, as we have less than two weeks before we move on.
Sound and fury
Meanwhile, the media is still buzzing about Trump’s visit to Helsinki, where the president appeared to side with the Russians over the FBI on the question of election meddling.
What was said? What does it mean?
Our guess is that it is a distraction…a circus…full of sound and fury, but signifying nothing.
What really matters, and what the media isn’t covering, is how many win-lose deals the feds are forcing on the rest of society. The more they do…the more they take…the more they boss everyone around, the poorer we get.
But it is not a graceful, gentile poverty that the feds impose. It is a brutal, nasty poverty.
Stay tuned.
| Regards, |
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| Bill Bonner |