Trump May Delay Signing Tax Bill Until Early Next Year

As the House prepares to hold its second vote on the final version of the Republican tax plan, Fox Business and Dow Jones Newswires are reporting that President Donald Trump might wait until early next year to sign the bill once it reaches his desk. His reason? By delaying the signing, Trump would effectively push certain spending cuts to programs like Medicare until 2019.
At issue are so-called “pay as you go,” or “pay-go,” budget rules that could be triggered by deficits in the tax bill. Congressional Republicans are preparing a separate fix to waive the rules after they finish the tax bill. But – given their already jam-packed legislative schedule – if Congress fails to pass the waiver before its year-end recess, one way to delay the cuts would be to wait until January to sign the bill.
If successful, the waiver would likely be attached to Congress’s ‘continuing resolution’ bill that would keep the government funded through Jan. 19.

This post was published at Zero Hedge on Dec 20, 2017.

Debt, Taxes and Politics: An Updated Perspective on Federal Tax History

With the Republican tax bill looming, we’ve updated this article to include the latest figures and estimates for federal debt and taxes.
Federal debt is defined as “the gross outstanding debt issued by the United States Department of Treasury since 1790” according to It does not include state and local debt, agency debt, nor entitlement programs such as Medicare and Social Security. It does include debt held by the public, debt held in government accounts, and by the Federal Reserve Board. Current federal debt per person is $62,814.
The first chart is a snapshot of federal debt with government forecasts through 2022 with an overlay of tax brackets since the onset of annual federal taxation in 1913.
As the chart clearly illustrates, the tax cuts in the early 1980s coincided with the beginning of an acceleration in real federal debt from a relatively consistent level over the previous three decades.

This post was published at FinancialSense on 11/14/2017.

US Spent A Record $4 Trillion In Fiscal 2017, Pushing Deficit To $666 Billion

One year ago, the CBO forecasted that the Fiscal 2017 US deficit (for the year ended September 30), would be in the mid-$500 billion range. It was not meant to be, however, and on Friday the Treasury reported that with outlays of $341 billion in the last month of the fiscal year, offset by $349 billion in receipts, the full year deficit grew to a nice, round and very memorable $666 billion in fiscal 2017, up $80 billion or 14% from fiscal 2016. The government ran an $8 billion surplus in September, much smaller than the $33 billion surplus in September 2016. Receipts fell 2% while outlays grew 5% last month compared with the same period a year earlier.
For the full year, federal tax receipts reached a record high $3.315 trillion, thanks to slightly faster growth, according to a Treasury official quoted by the WSJ. But government outlays also hit a record high last year at nearly $4 trillion ($3.981 trillion to be precise), 3% higher than they were in the previous fiscal year, thanks to increased spending on Social Security, Medicare and Medicaid, as well as higher interest payments on the public debt. And that’s with interest rates that were near all time lows. We can’t wait until the $20+ trillion in Federal debt starts really hitting the bottom budget line as the Fed starts pushing rates higher.

This post was published at Zero Hedge on Oct 20, 2017.

Here Is The Leaked Trump Tax Plan

Update 1: To our complete ‘shock’, Democrats have already taken to the media to bash Trump’s tax proposal as a “windfall for the weathly” even though the plan explicitly contemplates a new top end personal tax bracket to “ensure that the reformed
tax code is at least as progressive as the existing tax code and does
not shift the tax burden from high-income to lower- and middle-income
taxpayers.”
SCHUMER: GOP TAX PROPOSALS WON’T FLY WITH AMERICAN PEOPLE
SCHUMER: GOP TAX PROPOSALS WOULD RESULT IN WINDFALL FOR WEALTHY
WYDEN: GOP TAX PLAN BREAKS TRUMP PLEDGE THAT RICH WOULDN’T GAIN’
Meanwhile, Senator Wyden somehow concluded that a “lack of detail” necessarily confirms that the middle class is about to get screwed by the Trump administration…we’re waiting to hear from Wyden on whether that lack of detail also confirms that Trump colluded with the Russians in 2016.
WYDEN: LACK OF DETAIL IN PLAN MEANS MIDDLE-CLASS WILL BE HIT
And, of course, Pelosi had to chime in by stringing together a series of buzz words to form non-sensical statements:
PELOSI: GOP WILL GO AFTER SOC. SEC, MEDICARE TO PAY FOR PLAN
PELOSI: GOP STILL PURSUING TRICKLE-DOWN AGENDA
* * *
This afternoon, during a speech in Indianapolis, President Trump was expected to reveal, for the first time, the details of the long-anticipated Republican tax reform proposal that calls for substantial business and individual tax cuts. But in a political era where every little thing is leaked to the media, we no longer have to wait for presidential speeches to learn the details of key pieces of legislation. As such, below is a 9-page summary of Trump’s tax plan courtesy of the latest leaks.

This post was published at Zero Hedge on Sep 27, 2017.

Really Bad Ideas, Part 4: Federal Flood Insurance

As Hurricanes Harvey and Irma wreaked their havoc over the past couple of weeks, several interconnected questions popped up, the answers to which make us look, to put it bluntly, like idiots.
Why, for instance, are there suddenly so many Cat 4 and 5 hurricanes? Is this due to man-made climate change and is this summer therefore our new normal? The answer: Maybe, but that misses the point. There have always been huge storms (like the one that wiped Galveston, TX off the map in 1900, long before global warming was a thing), and barring another ice age there always will be. So the US east coast will remain one of Mother Nature’s favorite targets.
A second (and vastly more pertinent) question is why we’ve been encouraging millions of people to move into this bulls-eye in recent decades. Since 2000, Houston and surrounding Harris County have added 1.2 million people. Since 1980 Florida has added 10 million people – most of them in the coastal corridor from Miami to Fort Lauderdale.
Seems a little unwise, doesn’t it, to put tens of millions of people and millions of houses and cars where they’re guaranteed to be damaged or destroyed by inevitable future storms. But it’s not an accident. Government programs actively encourage this migration by picking up part or all of the tab for homes that are flooded by storms. The result: A massive and growing liability for future damage on top of all the other massive and growing liabilities for Medicare, Social Security, underfunded state and local pensions, etc. From last week’s Wall Street Journal:
One House, 22 Floods: Repeated Claims Drain Federal Insurance Program
Brian Harmon had just finished spending over $300,000 to fix his home in Kingwood, Texas, when Hurricane Harvey sent floodwaters ‘completely over the roof.’

This post was published at DollarCollapse on SEPTEMBER 19, 2017.

To Hell In A Bucket

No-one Cares… ‘No one really cares about the U. S. federal debt,’ remarked a colleague and Economic Prism reader earlier in the week. ‘You keep writing about it as if anyone gives a lick.’
We could tell he was just warming up. So, we settled back into our chair and made ourselves comfortable.
***
‘The voters certainly don’t care about the federal debt,’ he continued. ‘They keep electing the same spendthrifts to office. And the politicians know the voters don’t care. They also know that making more and more promises is the formula for getting reelected.
‘Deep down, the aging masses know they need massive amounts of government debt to pay their social security, medicare, and disability checks. On top of that, many of the so-called gainfully employed are really on corporate welfare; they hang their hats on government contracts to fund their paychecks.
‘You know as well I do how this crazy debt based fiat money system works. The debt must perpetually increase or the whole financial system breaks down. The best we can hope for is that the ongoing currency debasement merely leads to a subtle erosion of living standards. That’s the best-case scenario.
‘But, again, no one except maybe a handful of your readers’ gives a rip about the federal debt. Plus, if you’re gonna keep writing about it you need to use better terminology. The federal debt has grown at such a rapid rate that standard dollar units no longer capture what’s going on. The debt numbers are so large it is difficult to distinguish between hundreds of billions and tens of trillions of dollars.

This post was published at Acting-Man on September 19, 2017.

America Is Going Broke At Mach 30 “And No One Cares”

Authord by MN Gordon via EconomicPrism.com,
‘No one really cares about the U. S. federal debt,’ remarked a colleague and Economic Prism reader earlier in the week. ‘You keep writing about it as if anyone gives a lick.’
We could tell he was just warming up. So, we settled back into our chair and made ourselves comfortable.
‘The voters certainly don’t care about the federal debt,’ he continued. ‘They keep electing the same spendthrifts to office.
‘And the politicians know the voters don’t care. They also know that making more and more promises is the formula for getting reelected.
‘Deep down, the aging masses know they need massive amounts of government debt to pay their social security, medicare, and disability checks. On top of that, many of the so-called gainfully employed are really on corporate welfare; they hang their hats on government contracts to fund their paychecks.
‘You know as well I do how this crazy debt based fiat money system works. The debt must perpetually increase or the whole financial system breaks down. The best we can hope for is that the ongoing currency debasement merely leads to a subtle erosion of living standards. That’s the best-case scenario.
‘But, again, no one except maybe a handful of your readers’ gives a rip about the federal debt. Plus, if you’re gonna keep writing about it you need to use better terminology.

This post was published at Zero Hedge on Sep 15, 2017.

Systemic Uncertainty, Meet Fragility

That’s the problem with fragility: everything looks fine on the surface until a crisis applies pressure. Then the whole rickety contraption collapses in a heap..
This doubt is fact-based; as the number of retirees swells, as Medicare costs soar ever higher and the number of full-time jobs paying into Social Security/ Medicare stagnates, these pay-as-you-go programs break down; Social Security is already paying out billions more than it collects from employers and employees. Life is inherently uncertain, but systems that were once considered certainties have increasingly become uncertain. Social Security is one example; recent polls reflect widespread doubts among Millennials and Gen-Xers that there will be any Social Security benefits left for them by the time they reach retirement age. Uncertainty is one thing, fragility is another. The socio-economic systems we rely on are also becoming increasingly fragile and prone to failure, for an entirely different set of reasons than those driving uncertainty. Changing fundamentals drive uncertainty. The nation’s demographics and stagnant wages for the bottom 95% are extremely unfavorable for pay-as-you-go programs like Social Security and Medicare; their future is uncertain because the inputs and outputs are changing.

This post was published at Charles Hugh Smith on TUESDAY, AUGUST 29, 2017.

Fidelity Says Baby Boomers Haven’t Even Saved Enough To Cover Their Healthcare In Retirement

While statistics are somewhat sketchy on the topic, most research suggests that the average retirement-age household has managed to set aside roughly $200,000-$250,000 for their golden years. Unfortunately, they’ll need more than that just to cover their healthcare costs. Per Bloomberg notes today, the average 65-year-old couple will need roughly $275,000 to cover their healthcare costs during retirement…and that’s with Medicare.
A 65-year-old couple retiring this year will need $275,000 to cover health-care costs throughout retirement, Fidelity Investments said in its annual cost estimate, out this morning. That stunning number is about 6 percent higher than it was last year. Costs would be about half that amount for a single person, though women would pay a bit more than men since they live longer. You might think that number looks high. At 65, you’re eligible for Medicare, after all. But monthly Medicare premiums for Part B (which covers doctor’s visits, surgeries, and more) and Part D (drug coverage) make up 35 percent of Fidelity’s estimate. The other 65 percent is the cost-sharing, in and out of Medicare, in co-payments and deductibles, as well as out-of-pocket payments for prescription drugs.
And that doesn’t include dental care – or nursing-home and long-term care costs.

This post was published at Zero Hedge on Aug 25, 2017.

Compass Point: “Odds Of A Government Shutdown Are Now Dramatically Higher”

Over the weekend, Morgan Stanley reminded its clients that the biggest threat facing markets over the coming weeks is the ‘three-headed policy monster’ inside Washington: raising the debt ceiling, passing a budget and embarking on tax reform. As MS cross-asset strategist Andrew Sheets noted, “none are easy, but we see the debt ceiling as the most immediate test.”
He then cautioned that while the most likely outcome is that, after some tension, the debt ceiling gets raised “we don’t think it will be easy, or smooth, and it may require some form of market pressure to get different sides to fall in line. I’ve spoken to investors who are comforted by FOMC transcripts from 2011 that discussed prioritization of debt payments in order to avoid default. I am not. First, I worry that this reduces the urgency of what remains a serious issue. Second, this prioritization would require delaying payments to programmes like Social Security and Medicare, with real human and economic cost. And third, while the mechanics of this prioritisation may work, it is untested in a live environment.”
As reported earlier, the market’s concerns about a potential debt ceiling crisis, so far mostly contained, have once again started to bubble to the surface, with the Oct. 5 T-Bill rate rising to the highest level since August 1st, suggesting that bond traders see rising odds of a “worst case outcome” and partially answering our question from Monday whether “Markets Are Sleepwalking Into A Debt Ceiling Crisis: Mnuchin Issues Another Warning.”

This post was published at Zero Hedge on Aug 23, 2017.

This Silver Price Prediction Shows 3 New Bullish Targets in 2017

Two weeks ago, the price of silver rallied to one-month highs above the $17 level, as U. S. President Donald Trump and North Korean leader Kim Jong Un exchanged direct threats. Trump notably said the small Asian country would be met with ‘fire and fury,’ which pushed Kim Jong Un to threaten Guam with missile strikes.
But silver prices saw a modest decline last week despite a 1.4% bounce after the divisive Fed minutes on Wednesday, which indicated half of Fed officials are dovish while the other half are hawkish. The metal ultimately saw a weekly drop of 0.4% from Friday, Aug. 11, to Friday, Aug. 18.
Oh and wait, there’s the debt ceiling as well. The federal U. S. debt now sits at more than $19 trillion – more than the total 2015 GDP of $17.9 trillion – and that’s without accounting for unfunded liabilities like Medicare and Social Security.
Congress has until late September to get a deal done. The debt ceiling has been raised 78 separate times since 1960. But as we’ve seen over the last seven months, this is no typical administration, and if the debt ceiling isn’t raised on time, a ‘technical default’ could tank markets and boost flight-to-safety investments like silver.

This post was published at Wall Street Examiner on August 21, 2017.

Are Markets Sleepwalking Into A Debt Ceiling Crisis: Mnuchin Issues Another Warning

Over the weekend, Morgan Stanley reminded its clients that perhaps the biggest threat facing markets over the coming weeks is the ‘three-headed policy monster’ inside Washington: raising the debt ceiling, passing a budget and embarking on tax reform. As MS cross-asset strategist Andrew Sheets noted, “none are easy, but we see the debt ceiling as the most immediate test.”
He then cautioned that while the most likely outcome is that, after some tension, the debt ceiling gets raised “we don’t think it will be easy, or smooth, and it may require some form of market pressure to get different sides to fall in line. I’ve spoken to investors who are comforted by FOMC transcripts from 2011 that discussed prioritization of debt payments in order to avoid default. I am not. First, I worry that this reduces the urgency of what remains a serious issue. Second, this prioritization would require delaying payments to programmes like Social Security and Medicare, with real human and economic cost. And third, while the mechanics of this prioritisation may work, it is untested in a live environment.”
Perhaps sensing that the market is getting increasingly concerned about the potential standoff over the debt ceiling debate, which could eventually lead to a technical default, moments ago Treasury Secretary Steven Mnuchin, speaking at an event in Louisville, said that “we need to raise the debt limit and it’s my strong preference is that there’s a clean raise of the debt limit.”

This post was published at Zero Hedge on Aug 21, 2017.

Incoming MASSIVE Quantitative Tightening

No, the “risk” from “quantitative tightening” is not The Fed.
Yes, the reduction of their balance sheet will be a tightening.
But you’re a fool if you think this is the only — or even the largest source of such tightening over the next number of years — 10 to 15 years from now, in fact and starting effectively now.
There is in fact, as of right now, $5.486 trillion worth of “tightening” that will take place between now and 2034 and it will probably start in permanent form within the next two years.
Where is it?
Social Security and Medicare.
The system holds bonds as a buffer between demographics. This is a good thing, by the way, because there are baby booms and baby busts in any economy. By holding bonds during “boom” times the system has the assets to pay liabilities during busts.

This post was published at Market-Ticker on 2017-07-21.

National Debt Too High, Silver Price Too Low

Silver currently sells around $16, which would be sensible if the U. S. national debt was much less than its current $20 trillion.
Given the massive national debt and 100 years of experience, silver prices could easily be double or triple their current prices, and far higher in a panic.
WHY?
Examine over a century of official national debt data graphed on a log scale. Official debt in 1913 was $3 billion. Since then it has risen 8% to 9% every year to reach $20 trillion or $20,000 billion. Debt will continue rising as long as politicians spend and bankers lend.
Proof: Name the Senators, Representatives, Presidents, military contractors, pharmaceutical companies, and Medicare recipients who wish to see the government reduce expenses.

This post was published at Deviant Investor on July 14, 2017.

America’s Fertility Rate Falls To Record Low

The US isn’t yet grappling with the economic disaster that is a shrinking popuation – unlike Japan. Though it’s starting to look like a not-too-distant possibility. US birthrates fell to yet another historic low in 2016 as a whirlwind of economic and cultural factors inspire more women to delay, or forgo, having children. According to provisional data for the fourth quarter provided by the CDC, the US birthrate has declined to 62 births per 1000 women – its lowest level on record, and down from 62.5 in 2015.
This is especially troubling because demographers worry that a dwindling birth rate will hurt economic growth and tax revenues needed to fund transfer payments to a growing elderly population, as more members of the baby boomer generation age into retire.
The CDC did not say why the birth rate is declining. But according to Axios, research and surveys have shown several reasons, including wider availability of birth control, personal economic instability from student loans or other debt, women focused on launching a career before starting a family, and a growing acceptance that not everyone wants to have children.
If the Trump administration achieves higher economic growth, it’s unlikely to do so fast enough to support the mandated 9% increase in entitlement spending for older Americans without more deficit spending. Trump says he intends to preserve Social Security and Medicare spending levels. The highest birthrates are now seen among women aged 30-34. Previously, the highest rate had been for women aged 25-29, which fell to 101.9 in 2016.

This post was published at Zero Hedge on Jun 30, 2017.

The Real Healthcare Crisis: Retiring Seniors Need $500k To Cover Premiums Even With Obamacare

As Congress spends the next week and a half, if everything goes well, wrestling over how they can screw up healthcare in America even more, perhaps they should take notice of a new study from HealthView Services which highlights the fact that the real source of the healthcare crisis in this country is rising costs.
As Bloomberg notes, healthcare cost inflation is expected eclipse overall inflation and Social Security COLAs over the next decade.
U. S. retiree health-care costs are likely to increase at an average annual rate of 5.5 percent over the next decade. That’s nearly triple the 1.9 percent average annual inflation rate in the U. S. from 2012 to 2016 and more than double the projected cost-of-living adjustment (COLA) on Social Security benefits. The premiums on supplemental insurance, also known as Medigap, that many people buy to cover costs that Medicare doesn’t, such as co-payments; on Medicare Part B, which covers payments for doctors, tests, and other medical services; and on Part D, prescription drug coverage. Here’s how your Social Security benefits are likely to stack up against some of those costs.

This post was published at Zero Hedge on Jun 23, 2017.

How Washington’s Reaction to Trump’s Budget Justifies the Rise of Bitcoin

Earlier this week the Trump administration announced their proposed budget for 2018. The plan bears some striking resemblance to Trump’s first budget attempt in three key ways: it contains some legitimate cuts to a number of government programs, it features increases to America’s irrational war budget, and all together it reflects a significant increase in government spending from current levels. It also has zero chance of passing in Washington, which may be the most significant aspect of the budget.
As soon as details emerged, it was already being torn apart by a web of pundits, think tanks, and politicians. Not because it doesn’t adequately address America’s growing debt bomb, but because it promoted an ‘extreme’ view of austerity. In spite of its refusal to address the trillions in entitlement obligations for Social Security and Medicare, the budget’s modest reductions to Medicaid were deemed ‘radical.’ New York City mayor Bill de Blasio warned that proposed cuts to additional social programs will literally kill children. Meanwhile, the dependably absurd Jennifer Rubin was up in arms because Trump wasn’t spending enough on war.
As such, Republicans in both the House and Senate have made it clear that they aren’t interested in Trump’s ‘New Foundation for American Greatness.’

This post was published at Ludwig von Mises Institute on May 26, 2017.

Handout Nation: Combined Enrollment In America’s 4 Largest Safety Net Programs Hits A Record High Of 236 Million

Margaret Thatcher once said that the problem with socialism ‘is that eventually you run out of other people’s money’. As you will see below, the combined enrollment in America’s four largest safety net programs has reached a staggering 236 million. Of course that doesn’t mean that 236 million people are getting benefits from the government each month because there is overlap between the various programs. For example, many Americans that are on Medicaid are also on food stamps, and many Americans that are on Medicare are also on Social Security. But even accounting for that, most experts estimate that the number of Americans that are dependent on the federal government month after month is well over 100 million. And now that so many people are addicted to government handouts, can we ever return to a culture of independence and self-sufficiency?
On Wednesday, CNN ran an editorial by Bernie Sanders in which he called President Trump’s proposed budget ‘immoral’ because it would cut funding for government aid programs.
But is it moral to steal more than a hundred million dollars from future generations of Americans every single hour of every single day to pay for these programs?
Of course the answer to that question is quite obvious.
There will always be some Americans that are unable to take care of themselves, and we should want to help them.
But as millions upon millions of Americans continue to jump on to the safety net, eventually we are going to get to the point where it is going to break.
As I mentioned above, the combined enrollment in the four largest safety net programs has reached a new all-time record high…

This post was published at The Economic Collapse Blog on May 24th, 2017.

Watch Live: White House Releases Details Of Trump’s 2018 Budget Proposal

Watch as the White House officially releases its 2018 budget proposal (the statement can be read here and the full budget is found at the following link).
***
The Trump administration has officially unveiled its budget seeking $1.5 trillion in non-defense discretionary cuts and $1.4 trillion in Medicaid cuts over the course of a decade, while adding nearly half a trillion dollars to defense spending, for a total of $3.6 trillion in spending cuts. The plan, titled ‘A New Foundation for American Greatness,’ would dramatically reshape federal spending, cutting anti-poverty and safety net programs, while leaving Medicare and the retirement portion of Social Security untouched.

This post was published at Zero Hedge on May 23, 2017.

NEW YORK’S SINGLE PAYER HEALTH CARE PLAN WILL BURDEN TAX PAYERS

New York’s expensive idea, single payer health care, is going to cost the state more than their entire annual revenue. The state currently has around $71 billion in tax revenue, but just this health care plan would cost over $91 billion, and that’s likely a low estimate.
The single-payer health care plan that cleared the lower chamber of New York’s state legislature on Tuesday would require massive tax increases to double and possibly even quadruple the state’s current annual revenue levels. The plan, which was passed 87-38, would eliminate all private insurance in the state while keeping medicare and Medicaid and would provide health care to everyone in New York through the state government.
The New York Health Plan would add to the already hefty tax burden on the state’s residents. The financial aspects of this massive health care takeover will be the biggest challenge for the state. New York collected about $71 billion in tax revenue last year. In 2019, when the single-payer plan would be enacted, the state expects tax revenue to exceed $82 billion. To pay for health care for all New Yorkers, though, the state would need to find another $91 billion annually, and that’s a low estimate. The cost of this health care plan is likely to far exceed the estimated $91 billion. Of course, the state’s largest health care union is backing the government takeover of the industry, and that will help drive the costs even higher.

This post was published at The Daily Sheeple on MAY 18, 2017.