Best of the Week
Most Popular
1. Trumponomics Stock Market 2018 - The Manchurian President (1/2) - Nadeem_Walayat
2.Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - Dan_Amerman
3.China is Now Officially at War With the US and Japan - Graham_Summers
4.Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18 - Plunger
5.Stock Market Longer-Term Charts Show Incredible Potential - Chris_Vermeulen
6.U.S. Stock Market Cycles Update - Jim_Curry
7.Another Stock Market Drop Next Week? - Brad_Gudgeon
8.The Death of the US Real Estate Dream - Harry_Dent
9.Gold Market Signal vs. Noise - Jordan_Roy_Byrne
10.The Fonzie–Ponzi Theory of Government Debt: An Update - F_F_Wiley
Last 7 days
Why Oil Prices Fell -- Stockpiles or Price Pattern? - 18th Aug 18
Why The Uranium Price Must Go Up - 18th Aug 18
Land Rover Discovery Sport 90% Motorway Driving MPG Fuel Economy in ECO Mode - 18th Aug 18
GDX Gold Mining Stocks Q2’18 Fundamentals - 18th Aug 18
SPX Losing Gains - 17th Aug 18
What Gold Is Not - 17th Aug 18
Dollargeddon - Gold Price to Soar Above $6,000 - 16th Aug 18
Stock Market Higher Again, Correction Over? - 16th Aug 18
Up Your Forex Trading Game - 16th Aug 18
Large Caps Underperformance vs. Small Caps is Bullish for Stocks - 16th Aug 18
“The Big Grab” - Failing Pension and Retirement System - 16th Aug 18
How US Indo-Pacific Vision Forgot Asian Development - 16th Aug 18
Impulse Moves in the Currencies - 15th Aug 19
Best Merlin UK Theme Park Summer Holiday 2018 - Thorpe, Alton Towers, LegoLand or Chessington? - 15th Aug 18
The Essence of Writing an Essay that Must be Understood - 15th Aug 19
Is Solar Energy Rising From The Ashes Again? - 15th Aug 18
A Bullish Bond Argument That Hides in Plain Sight - 15th Aug 18
Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - 15th Aug 19
A Depressed Economy And A Silver Boom - 15th Aug 19
Moving Averages Help You Define Market Trend – Here’s How - 14th Aug 18
It's Time for A New Economic Strategy in Turkey - 14th Aug 18
Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - 14th Aug 18
Dow Stock Market Trend Forecast 2018 - Video - 13th Aug 18
Stock Market Downtrend to Continue? - 13th Aug 18
More Signs That the Stock Market Will Rally Until 2019 - 13th Aug 18
New Stock Market Correction Underway - 13th Aug 18
Talk Cold Turkey Economic Crisis - 13th Aug 18
Which UK Best Theme Park - Alton Towers vs Thorpe Park vs Lego Land vs Chessington World - 12th Aug 18
USD is Rising. What this Means for Currencies and Stocks - 12th Aug 18
Hardest US Housing Market Places to Live - Look Out Middle Class - 12th Aug 18
America’s Suburbs Are Making a Comeback - 12th Aug 18
Stock Market US Presidential Cycle, Seasonal Analysis and Economy - Video - 12th Aug 18

Market Oracle FREE Newsletter

Trading Any Market

GOP Adopts Democrat Big Deficit Spending

Politics / US Politics Feb 13, 2018 - 11:53 AM GMT



If you ever had doubts that the Federal Government experiment has failed, the bipartisan busting of the budget has made it clear that Congress abdicates their sacred duty to defend the nation from internal enemies of the people. Forget the preposterousness argument that the United States must have the most expensive military to expand the evil empire that has been built up since the end of World War II. Real national defense starts at our own water's edge and needs to relinquish any absurd notion that our own safety is enhanced by having deployments to every corner of the globe. As long as the State Department expands their interventionism, diplomacy is scarified upon the alter of continuous military bombing. Eliminating the restrains of sequesters to tamp down the size and intrusions of gun boat intimidation are a step backward. Actual national defense is diminished by the garrison bases located far from our own homeland.

According to the Department Of Defense, Trump Calls for Ending Sequester is a major mistake.

"The president said these regimes – including China and Russia – “challenge our interests, our economy and our values.”

The president stressed that the United States must modernize and rebuild the nation’s nuclear triad to make it so powerful that it will deter any thought of aggression by any country. “Perhaps someday in the future there will be a magical moment when the countries of the world will get together to eliminate their nuclear weapons,” he said. “Unfortunately, we are not there yet, sadly.”

Absence in this tortured logic is any criticism of U.S. Foreign Policy that actively incite regime change, military sales to aggressive belligerents and full spectrum dominance that threatens any country that will not buckle under to the corporatists, the Zionists or to international globalism. The U.S. government functions as mercenary enforcers for the Banksters of the IMF and World Bank.

Where are the fiscal Republicans who will challenge the failed record of nation building? Where is the GOP outrage for maintaining the Afghanistan protecting racket for the opium trade? And where are the non-interventionist legislatures willing to challenge the imperialist Neo Conservatives, who are nothing but war mongers?  

By capitulating to the military/industrial/complex, to the K Street Lobbyists and the greedy parasites who keep voting for more government programs and higher indebtedness; the Republic can never be restored.

With the passage of this bloated budget, the dedicated leadership of the Tea Party has been betrayed by the establishment GOP. Sane Americans have long ago accepted that Democrats are demented collectivists. Now their ranks have swelled with the addition of Republican spendthrifts.

With the enactment of this legislative sellout, the baseline for future budgets have raised expenditures which assure that future year spending continues at even higher levels. Runaway squander is normal for the District of Criminals, but the notion that this lavish misuse of public funds can end well is just as ludicrous as the rationalizations used by politicians that these programs are necessary.  

The Sequester Explained provides an overview of the components to the sequester restraint.

The Budget Control Act (BCA) requires a cut of over $1 trillion in spending through a sequester. The Office of Management and Budget (OMB) is given authority to carry out the sequester. We do not yet know OMB’s interpretation of the Act, but   the Congressional Budget Office (CBO) assumes that the sequester is intended to make cuts to discretionary appropriations and mandatory spending that add up to $1.2 trillion (less assumed debt service savings) over nine years, beginning in 2013.

• For fiscal years 2014-2021, cuts would be achieved by lowering the original BCA caps on defense (which does not include Overseas Contingency Operations (OCO)) and non-defense discretionary budget authority, and by cancelling budgetary resources for some mandatory spending programs.

• Real level of program cuts is $984 billion. This is because $216 billion of the $1.2 trillion will come from assumed interest savings.

• Cuts are evenly divided between each of the nine sequester years. Therefore, each year, OMB must sequester $109 billion from projected spending.

• Annual cuts are split evenly between the non-exempt portions of  defense and non-defense spending – an approximate cut of $55 billion to each. Cuts are spread among discretionary and non-exempt mandatory spending. Defense and non-defense discretionary spending will be cut to lowest levels as a percentage of the economy in the modern era.

• Most mandatory spending is exempt from the sequester, including: Social Security, retirement programs, veteran’s benefits, refundable tax credits, Medicaid, the Children’s Health Insurance Program (CHIP), unemployment insurance, food stamps (SNAP), Temporary Assistance for Needy Families (TANF), and a host of other programs (mostly those benefitting individuals with low incomes).

• Medicare is subject to the sequester in the  form of provider payment cuts, but those cuts cannot exceed 2 percent.

David Stockman writes in his Contra Corner article, Here Comes The Yield Shock---The Beltway Borrowers Are Going Berserk about the role of the Pentagon in this budget deal.

"During the years since the 2011 debt ceiling showdown, the GOP pols have suffered what they perceive to be severe political fallout from government shutdowns over the debt ceilings and continuing resolutions. Yet until the last few months--- aside from the short-livid Taper Tantrum in mid-2013---- interest rates kept going down even as the public debt climbed higher and higher.

Even without the $85 billion defense increase for next year, the DOD would still have $631 billion to fund its operations, which is more than the next 10 countries of the world spend for defense on a combined basis, and 10X more than the allegedly nefarious Russkies in the Kremlin.

What is happening, of course, is that the generals have taken over national security policy lock, stock and barrel, including the absolute war-loving lunatic, General "Mad Dog" Mattis, who runs the Pentagon.

So doing, they have not bothered to tell the clueless occupant of the Oval Office that by drastically escalating the pace of military operations all around the world---from the Korea/Pacific through Afghanistan, the Iraq-Syrian theatre, Yemen, North Africa, the Baltics and the Black Sea---he is consuming fuel, material, spare parts, logistics and contractor support---like there is no tomorrow."

The basic explanation that Republicans offer for ditching the constraints of sequester is that they required Democrat votes to pass a budget and prevent another Federal shutdown. Well, we all know that the Democrats would do anything to blame Trump for the coming financial and economic recession. A bonus for their agreement is the breaking of the bank. Of course the Schumer Democrat faction gets to increase their beloved social programs, but the ease that the McConnell Senate majority caved manifests that curtailing new spending with offsets is not worth fighting for.

The Freedom Caucus has proven their laudable consistence by their voting record to battle the betrayal of Speaker Ryan in the House of Representatives for years. However, they are being pronounced DOA by Forbes, This Budget Deal May Be The End Of The House Freedom Caucus. "There will be less for the House Freedom Caucus to do, less opportunity to do it and far fewer reasons for others to listen to anything it has to say. Even if it continues to exist, today might well be the day we point to as the moment when the HFC stopped being important and anyone cared about it."

Conversely, the heartland and Trump's loyal base understands well the shadow cooperation among both party establishment cronies. If the herculean efforts to legislate sequester caps can be eliminated with ease by a slap of the deep state hand, what possible congressional action can be achieved when elections are rigged and decent representatives are driven from office? The climate of mere accusations or fake black mail has become typical tactics from the corrupt insiders.

The Republican Party has relinquished any combat spirit within the chambers and cloakroom of Congress. Now that their pretense of fiscal responsibility is shed, their constituents must engage in the primary process to unseat GOP big spenders. Even so, it should be apparent that electing new blood to Congress will never achieve any real reforms like term limits.

The reign of terror that materializes in every Congress is inevitable as long as representatives are allowed to become multi-millionaires by selling their votes to campaign contributor patrons. This pattern of corruption will never stop under the favoritism shown by law enforcement agencies to protect the subverted system.

As Republicans scream for national security, they are really protecting the foxes attacking the hen house. Spread more money around and build up agency budgets will continue as long as the U.S. Dollar retains its reserve currency status. The day of reckoning approaches and a substitute legal tender will be introduced. If the empire creates their official cryptocurrency, when the default arrives and national bankruptcy ensues, do not be surprised.  Putting a GOP logo on this new medium of exchange would be fitting.



Discuss or comment about this essay on the BATR Forum

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2018 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules