Unhinged – Part 1: David Stockman On The GOP’s Fiscal Madness

by David Stockman via Contra Corner blog,
ZeroHedge.com
Wed, 01/03/2018

The watchword for 2018 is: UNHINGED!

That refers to Wall Street, Washington, the Dems and the GOP, and all the far and near corners of the planet which are implicated in their collective follies.

The latter begins with the fact that Imperial Washington has become so dysfunctional that the most powerful government on earth can’t seem to keep its doors open for more than a few weeks at a time.

The next continuing resolution (CR) deadline is January 19 and the route thereto resembles nothing less than kick-the-can-alley. It’s strewn with $100 billion of unfunded disaster aid, defense and nondefense sequester caps fixing to be busted by another $100 billion, 700,000 dreamers waiting to be deported, 9 million poor children (CHAPS) facing termination of medical care and millions more ObamaCare recipients who have been promised that cost abatement subsidies to insurance companies will be funded forthwith.

And along with those major bouncing cans are countless more articles of graft and booty cued-up on Capitol Hill looking for a legislative gravy train (i.e. CR) to hop aboard.

Likewise, the casino gamblers on Wall Street complacently attempt to tag another record at 2700 on the S&P 500. Yet that would represent a nosebleed 25X LTM earnings heading into a bond market rout that is certain to result from soaring treasury issuance and the Fed’s impending bond dump-a-thon.

Worse still, the Donald insouciantly unleashes tweet storms about the alleged Trumpian boom when the next recession is statistically just around the corner. After all, the current so-called recovery will pass the existing 118 month record, which occurred under the far more propitious circumstances of the 1990s, in April 2019.

But when it comes to Unhinged, nothing tops the GOP’s disgraceful plunge into fiscal turpitude. The once and former party of fiscal rectitude and a constitutionally required balanced budget has unleashed a torrent of red ink, which under the circumstances, makes Barack Obama’s profligacy pale by comparison.

What we mean is that circumstances matter, and that piling $800 billion of “shovel unready” stimulus on the recession-bloated Federal deficit in 2009 was bad enough. But 108 months on from the Obama Stimulus with the official unemployment rate at 4.1%, a huge discretionary leap into more red ink borders on madness.

>Even the most incorrigible Keynesian stimulators have never argued that you inject massive amounts of borrowed money into the economy during the 8th inning of a business expansion. Instead, you are supposed to be shrinking any residual deficit from the last downturn, and, ideally, running a surplus in order to chip-away at the existing debt.

The Rest…HERE

This entry was posted on Wednesday, January 3rd, 2018 at 2:01 pm and is filed under Conspiracy, Corruption, Economics, Government Evil. You can follow any responses to this entry through the RSS 2.0 feed.