The anatomy of the political and economic situation as I see them right now.
If we look back at what Reagan and Bush did, we can see how this new administration and Congress will start out. The Democrats have no controls left at all. They can stop nothing over the long run.
So the first thing the Republicans will do is pass a huge tax cut for the rich, just like Reagan and George W. Bush did. When Reagan entered office, we were running $50 billion deficits a year. He increased defense spending by 100 billion and cut taxes on the rich by 100 billion. So he increased the deficit to 250 billion a year and that deficit continued every year over Reagan's eight years and four more years for Bush Senior.
Together those two added $3 trillion to the deficit over 12 years. That was a lot in those days.
The first thing George W. Bush did, was pass a multi-trillion dollar tax cut for the rich that not only lasted the entire time George Bush was in office, but Obama let it run a couple years into his administration. That added many trillions of dollars to the deficit.
And then George Bush, started a couple of wars and there was that large increase in defense spending again, which is actually a simple way of transferring money from the people to the large corporations and the military-industrial complex. Republicans have been using that trick for 70 years. I.e. nobody will resist an increase in military spending and it is a way to pay off their large corporate donors.
We have no way of stopping any of the excesses of the right wing now. The Supreme Court will be set for the next 30 years, it will be very difficult for us to take the Senate back in 2018 absent some sort of horrible cataclysm that causes people to vote way outside their normal comfort level. That generally doesn't happen. And we all know that we won't get the house back until at least 2020.
George W. Bush just sort of let everything go. The man he appointed to oversee Wall Street, Christopher Cox, did not investigate a single one of the 5000 complaints. When Obama won, he just disappeared into the shadows never to be heard from again.
This new administration also will not regulate Wall Street in any way at all. And so the same excesses that brought us to a financial calamity in 2008 will be repeated, only this time it will be on steroids with no way to mitigate it.
| In a nutshell, I expect the new administration to start to run up the deficit dramatically, by passing huge tax cuts. Supply-side economics if you will that everyone knows is not a viable economic system and is taught at very few universities in the world as such. |
| As they run up the deficit, they will cut social programs to the bone leading to a resurgence of abject poverty in this country like we saw in the early 1900s before Social Security. The increase in deficits and the loss of confidence in our economy and administration will cause the dollar to fall, which will increase the cost of imports. |
| The world, remembering 2008, will not by our bonds like they once did as the increasing debt and increase in interest rates will make it difficult for us to meet our obligations and there will be doubt about whether we would even try. As well the world will remember our bogus credit default swaps(CDS) and collateralized debt obligations (CDO's). |
| So the deficit will rise, interest rates will rise, the dollar will fall and the stock market will plunge and gold and silver should go to the stratosphere. |
