Stockman: Trump's in a Fiscal 'La La Land'
[Ed. Note: To see exactly what this former Reagan insider has to say about Trump and what fiscal policy must be met in government, David Stockman is sending out a copy of his book Trumped! A Nation on the Brink of Ruin… And How to Bring It Back to any American willing to listen – before it is too late. To learn how to get your free copy CLICK HERE.]
David Stockman joined Fox Business channel’s Neil Cavuto to discuss Trump’s budget blueprint that has been released and his views on the fiscal realities of the coming debt crisis. While the full budget has yet to be released by the Trump administration via the Office of Management and Budget, there has already been a wide range of opinion and fiscal analysis for what the budget means for the national debt.
When speaking on the recently proposed budget from the Trump administration David Stockman offered his analysis on exactly what to expect, “I think that Trump is so deep in fiscal ‘la la land’ that if he can’t even find the wrong envelope with the right answer. He is saying crazy things. Saturday he tweeted that he would reduce the national debt by $12 billion. He’s actually increased the net debt in 35 days by $187 billion, he inherited that. That’s $5 billion a day in red ink flowing out the door.”
David Stockman is a former Director of the Office of Management and Budget under President Ronald Reagan. Stockman also served as a member of Congress representing Michigan. He is currently a bestselling author and has released his latest book TRUMPED! A Nation on the Brink of Ruin… And How to Bring it Back correctly identified the rise of Donald Trump and prophetically identified exactly what Donald Trump must do in order to save the American economy.
When asked about the math on the budget proposal Stockman explained, “The reason is that when he took office there was $382 billion of cash in the Treasury. It is down to $178 billion by last Friday afternoon. They’ve burned through $204 billion in cash while he was trying to get the administration organized and assembled with an economic team.”
When Cavuto posed whether that was actually from Trump’s doing Stockman replied, “No. It wasn’t. In either case, the point is to make that kind of tweet and point indicates a total unfamiliarity with the facts. Those facts are going to take down this whole program. He’s got a debt ceiling that goes back into place March 15, two weeks from now. He will be frozen in. He’ll have maybe 50 days of cash left. By time we get to June or July there is going to be a debt ceiling crisis like never before. He will not get the Republicans to vote for a huge increase in the debt ceiling if they’ve not yet repealed and replaced Obamacare – which isn’t happening and has not even started.”
When asked about the room that Trump faces in Congress to get a budget plan passed, “I don’t think we’re going to see tax cuts at all. Not a chance. There is going to be a debt ceiling crisis like never before this summer. That is what people don’t realize. They’ve burned up all the cash that Obama left on the balance sheet.”
When asked what could be an agenda with compromise that would rally the Republican party to take action on the budget he responded, “Everybody has agreed that Obamacare will come first. However, that is going to take time. They passed a budget resolution for fiscal year 2017 that gives reconciliation so they can get it through the Senate.” He then noted that Republicans have decided to not take up tax cuts first, because “they have the naive notion that they can repeal and replace from day one. Now they’re stuck with their decision. They need, now, a budget resolution for fiscal budget year 2018 with an instruction for tax reform but will not get that passed before the end of summer.”
When asked whether Trump deserved the benefit of the doubt on tax cuts, growth and fiscal policy he noted, “He’s not paying attention. He’s not learning anything and he’s making ridiculous statements. We don’t need a $54 billion increase in defense when the budget is already ten times bigger than that of Russia. We don’t need $6 trillion of defense spending over the next decade because China is going nowhere, except trying to keep their ponzi scheme together.”
“The idea that they can offset the $54 billion domestically without touching $1.8 trillion of social security and medicare is ridiculous. Even if you look at domestic spending, there is $100 billion for airports, etc.” The Fox Business Host then asked whether Trump could actually grow his way out of the debt Stockman said emphatically, “Not a snowball’s chance in a hot place. The reason for it, and this is what people need to focus on, is that there is already one third more growth in the Congressional Budget Office’s (CBO) baseline over the next ten years than we’ve actually had in the last ten years. Even if everything works perfectly, and then can pass these huge tax cuts… we’ll be lucky to get the amount of growth that the CBO already has.”
Stockman then went on to offer his analysis of the political situation and how it impacts the fiscal realities in America stating, “Most of the Republicans want to have revenue neutral, or deficit neutral, tax cuts. You can’t get a reconciliation bill through the Senate unless it is revenue neutral. What I am saying is, all of the extra growth from dynamic accounting if you got all these tax cuts through just will not happen. The math isn’t there.” When asked what happens after that Stockman highlights, “there is going to be a debt crisis this summer that will cause a financial crash of unbelievable proportions. It is going to go on for days, weeks, if not months because Congress is already in such a nasty partisan divide.”
“I am seeing reality, the machines [on Wall Street] are simply trading on sound bites, tweets and hourly sentiments. This is meaningless and the biggest suckers rally in history. There is going to be a huge surprise very soon.”
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