RSS

Fed Chair Powell warns of a sugar high. Tells Congress that $1 trillion budget deficits are unsustainable

If you can not pay the debt back, what court is going to litigate with el Donald?

WASHINGTON – Federal Reserve Board Chair Jerome Powell: “Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn.”

Of course, this conflicts with the image drawn by Trump, an image drawn by his trillion dollar a year borrowing to feed an inflated stock market.  Under Trump, the U.S. federal debt has grown by about $3 trillion.  The current budget proposal .. in an election year … would add another $5 trillion to the debt over the coming decade. Economists worry that so much U.S. government debt can dampen private investment by driving investors to buy public bonds instead of private ones.

Trump’s tweets blasted Powell in the middle of the congressional hearing :

“When Jerome Powell started his testimony today, the Dow was up 125, & heading higher. As he spoke it drifted steadily downward, as usual, and is now at -15. Germany & other countries get paid to borrow money. We are more prime, but Fed Rate is too high, Dollar tough on exports,”

Of course, Trump is ignorant of what that would mean.  Economists widely view negative interest rates as only worth doing when the economy is in a terrible situation. But after all, Trump’s business was built on leverage and dubious loans from Russian oligarchs.  Maybe Putin will buy US debt? This would make sense to Trump, after all, debt is just capital on loan and if you can not pay it back, what court is going to litigate with el Donald?


2 Comments Add Yours ↓

  1. Mark Adams #
    1

    No need to litigate. The President’s proposed budget is just that a proposal. Congress and particularly the house actually passes the budget. Maybe the house could find time in its busy schedule of investigations to do its primary function, and at minimum have a discussion, or is everything cool with everyone getting some bucks.

  2. Roger Rabbit #
    2

    Doesn’t Powell know criticizing The Boss is a crime? Lock him up! But at least he didn’t tear up Trump’s budget on live TV, so maybe he’ll get a lighter sentence than Pelosi’s.



Your Comment