The Coming Financial Storm
In the first nine days of the Biden Administration, he’s autographed 40 executive orders/actions and proposed four trillion dollars of new spending. Two trillion for Covid relief and two trillion to global warming. Now where is this money coming from? The taxpayers. The Country’s not in a financial position to spend this kind of dough, given the huge amount of debt already on the books. We can’t dive into some secret piggy bank. Selling more treasury bonds would risk making them “junk” bonds if the market is overloaded. Plus, there’s the interest that has to be paid to the bond holders (The Chinese).
The United States can only sell so many bonds, individual savings bonds and treasury bonds. You can buy them, people all over the world buy them, and they pay interest. These are safe investments because they are backed by the full power of the US government. The Chinese own billions of dollars’ worth of US Treasury bonds, but if you overload the market, those bonds could be perceived as unstable. If that happens the demand will cease and a main source of income into the country will fade away. This is not a brilliant economic policy, it’s dangerous and moronic and it could lead to a collapse of the dollar as the world’s benchmark currency. Spending money like a drunken sailor on leave, a trillion here and a trillion there, is fiscally irresponsible and an undisciplined, stupid policy.
Given the aforementioned overloaded bond market, that leaves Joe only one avenue to raise the money to cover his boondoggle spending. The United States taxpayer. All of them are going to pay for saving the planet from climate change and bailing out California and New York under the guise of Covid relief. All of them.
The first primary revenue source to look at, will be increasing the federal gasoline taxes. But the federal government won’t stop with penalizing your driving habits. All fossil fuel sources, including heating oil and natural gas are going to be more expensive. Anything you use in the fossil fuel arena; the government is going to slap a tax on it and say it’s for the fight against global warming. Baloney. So get ready, with Biden’s ending XL pipeline construction and banning hydraulic fracking, folks are going to pay more for energy. A lot more.
Then Joe, or his handlers, will propose that we raise the taxes on those “greedy evil corporations” which will cause a shrinkage of jobs in the corporate world. Of course, you have to raise taxes on high wage earners but that won’t be enough. It’s a fair bet that they're also going to raise Social Security taxes for everyone. They cannot forget to make higher capital gain taxes the new norm, which will clobber investment activities. So, if you have a winning stock like GameStop and you sell it, you will pay more to the Government than you do now. That will kill the stock market.
President Biden has never been known for his shrewd financial acumen, even when he was a Senator or Vice President. No one is going to accuse him of being a brilliant man who knows the ins and outs of economic planning. What he does exceptionally well, is pander to his base, which he has done with a progressive deftness unseen in the history of the Republic. He’s making Obama look like a conservative.
As President Biden continues to sign order after order, with no demonstrable benefit to the vast majority of Americans, he’s not making life better or unifying the country. Just look at social media and hunt for the posts praising his leadership, magnificent financial initiatives or his uplifting teleprompter speeches. You won’t find any. Some may hate Trump. But to his credit, as a businessman he understood economics and business. This is the direct benefit of not spending 47 years of your life in the DC swamp. He knew that the climate change science spending was suspect and that bailing out New York and California from their self-created financial mismanagement should not be included in Covid relief.
There is a financial storm coming with this Administration, if this fiscal nonsense remains unchecked. You can fill sandbags with gold and silver, but that will not solve the underlying fundamental ignorance of responsible fiscal stewardship. Sadly, the new President doesn’t look like he’s going to do anything other than read whatever is on his teleprompter and practice his penmanship.