Vice President Mike Pence admitted that President Trump’s proposed tax reform - which has been estimated as adding as much as $7 trillion to the US deficit over the next decade - may increase the deficit "in the short term."
The US economy is on "pause" because of the new administration, according to Blackrock's Larry Fink, and Trump's tax proposals are unlikely to spur enough economic growth (due to demographics), leaving America "on the path to exploding deficits."
From the chart, it is clear that the U.S. economy is at least partially reliant on foreign trade. This is especially true for states with major trade hubs and multinational corporations. At the same time, low population states without major trade hubs are not very reliant on international trade.
"Based on what we know so far, the plan could cost $3 to $7 trillion over a decade– our base-case estimate is $5.5 trillion in revenue loss over a decade.... a $5.5 trillion tax plan would be enough to increase debt to 111 percent of Gross Domestic Product (compared to 89 percent of GDP in CBO's baseline) by 2027."
While it remains at best a moderate risk factor - Goldman's latest estimate puts it at about 1-in-3 chance - the question of what happens if the government does shut down at midnight on Saturday is starting to percolate. Here are some thoughts from Citi.
One week after "unnamed sources" reported that Saudi Arabia had backed the proposed 6 month extension to oil production cuts, this morning oil is lower after the world's biggest oil producer appeared to backtrack on its trial balloon from last week, when Saudi Arabia’s energy minister said it is "too early" to decide whether OPEC will extend its crude-production-cutting agreement for the rest of the year.
"The Secretary General and I had a productive discussion about what more NATO could do in the fight against terrorism. I complained about that a long time ago and they made a change. And now they do fight terrorism. I said it was obsolete. It's no longer obsolete."
"Paper money appears at first sight to be a great saving, or rather that it costs nothing; but it is the dearest money there is." This is the uncomfortable truth of the euro currency experience. As it seems, people in the euro area about to learn an old lesson: namely that unbacked paper money - which is what the euro represents - cannot be trusted.
"Dimon argues that the current capital standards are restraining lending and impairing economic growth, yet he also points out that JPMorgan bought back $26 billion in stock over the past five years. If JPMorgan really had demand for additional loans from creditworthy borrowers, why did it turn those customers away and instead choose to buy back its stock?"
Those who are baffled by productivity never bothered to put their theories to rudimentary tests. Greenspan is correct that social benefits crowd out genuine investment; thus, those proposing some sort of guaranteed minimum living wage are totally off base. Entitlements are already a massive problem, let’s not make them worse. Massive handouts have never solved any economic problems, and never will.
As relations between the Kremlin and the White House deteriorate with every passing day before Trump has even met with Putin, accusations that Trump is a puppet of the Kremlin remain the topic du jour across the US media.
"The resulting losses for mutual funds, pension funds, insurance companies, banks, and other holders of government debt might be large enough to cause some financial institutions to fail, creating a fiscal crisis."