Saturday, May 27, 2017

Debt ceiling crisis for US could come as soon as August, as tax revenues are below projections under Trump


On p. A19 of the Washington Post on Saturday, May 27, 2017, Catherine Rampbell has a disturbing column titled “Rooting for the one-percenters”.  Online the title is scarier, “America is about to face a major hostage situation”.

Tax revenues are coming a bit slower than had been expected, partly because of some arcane incentives, so the extraordinary measures that Treasury Secretary Munchen to get around the debt ceiling could run out sooner than had been expected, perhaps by the end of August.



Rampbell points out that Trump made reckless states about the debt ceiling during the campaign, claiming he could negotiated business “deals” with creditors.  It’s unclear if Trump’s views have moderated.  Perhaps, because Munchen wants to resolve this issue.  But OMB director Milke Mulvaney has been unsteady (to say the least) about the country’s credit worthiness, partly because of his connection to the House Freedom Caucus.  Democrats might have a political incentive to let the Republicans crash the economy in view of the 2018 elections.

For someone in my shoes (in retirement), nothing is more important than stability and predictability. Otherwise I become as pitiful a parasite as the people I try to avoid.

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