by: Stefan Gleason, Money Metals News Service
Is the Trump agenda in peril? It’s a question investors should consider ahead of the mid-term elections.
Up to now, the Trump economic agenda has certainly been great for Wall Street and much of the broader economy. The Dow Jones Industrials continues to defy all naysayers – notching yet another new record high in the first week of October before correcting.
Meanwhile, the latest GDP numbers show the economy growing at its fastest pace in over a decade, with official unemployment at generational lows.
The Trump economy is booming. But so is government spending under the president’s watch. As a consequence, budget deficits are rising toward the $1 trillion level. Rising debt servicing costs over time threaten to eat into and reverse the gains created by tax cuts and deregulation.
That’s not the only threat to the Trump agenda. Democrats, the deep state, and even high-level members of his own administration (if you believe New York Times reports) are part of a “resistance” movement working to thwart President Donald Trump’s policies and priorities.
Trump Faces a Shadow Government Focused on Sabotage
Investigative journalist James O’Keefe recently published undercover recordings of federal government bureaucrats admitting to engaging in subversive political activities on taxpayer time. Many are members of the Democratic Socialists of America, a radical leftist group that has formed a shadow government within the government.
The Washington, D.C. swamp hates the Trump agenda – no surprise since candidate Trump vowed to “drain the swamp.”
Unfortunately, most members of Congress are themselves swamp creatures. Every budget proposal the White House has submitted to Congress containing billions in spending cuts has been met with immediate resistance from both Democrats and establishment Republicans.
Trump and Congress Are Both Responsible for Skyrocketing Deficits
In March, Congress sent the President a $1.3 trillion spending bill to keep the federal government open. It predictably came loaded with funding for an array of unnecessary programs the White House had tried to strip out of the budget.
Rather than send it back to Congress and demand they come back with a more fiscally responsible spending bill, Trump reluctantly signed it.
“There are a lot of things that we shouldn’t have had in this bill,” Trump complained. “I said to Congress, I will never sign another bill like this again.”
But in late September, he did just that. He signed an $853 billion spending bill into law that was written by and for “the swamp” – funding every wasteful bureaucracy and pet program insisted upon by incumbent politicians. Everything got funded except President Trump’s border wall.
If Trump himself isn’t willing to use his presidential powers to fight for the Trump agenda, then it will continue to get outvoted, resisted, and obstructed in the next Congress – regardless of which party controls it.
Instead of exercising his constitutional power of veto, the President signed his name to the mess Congress made. Trump now owns the skyrocketing budget deficits Congress authored.
They will go down in history as the Trump deficits.
Interest on the national debt is the fastest growing category in the federal budget. Interest payments alone are projected to surge to $900 billion in a single year by the next decade. That’s more than we spend on the military.
President Trump is concerned about the risks of rising interest rates. He has complained repeatedly about the Fed’s rate hiking campaign. But he hasn’t exercised his presidential power on behalf of the Trump agenda on the Fed.
Trump Has Yet to Pursue Promised Monetary Reform
One plank of the Trump campaign platform that has been neglected so far by the administration is reform of the monetary system.
In particular, candidate Donald Trump vowed to audit the Federal Reserve. He even chided rival Ted Cruz for not being sufficiently engaged on the issue after he missed a Senate vote on the Audit the Fed bill (which ended up being blocked by Democrat leader Chuck Schumer).
President Trump has certainly been critical of the Fed’s policy decisions in recent months. But he hasn’t been critical of the Fed’s powers. He’s been silent on the issue of bringing greater transparency to the central planning body’s policy decisions through a public audit.
Trump himself elevated Jerome Powell from deep within the bowels of the central bank to become Fed Chairman. Powell explicitly opposes an audit. He’s a swamp creature, like many of the appointees within Trump’s own administration who are now undermining the Trump agenda.
Swamp Creatures Slithered into the Trump White House
It shouldn’t come as a surprise that the many Washington careerists, globalists, and Bush carryovers hired by Trump aren’t actually committed to the Trump agenda.
All the snakes that rapidly slithered from the swamp toward the White House promising to help Trump govern effectively are still snakes.
On the campaign trail in 2016, Trump often recited a poem about the nature of a snake.
The crux is that a woman helps save a snake only to get a vicious bite in return:
“I saved you,” cried that woman
“And you’ve bit me even, why?
You know your bite is poisonous and now I’m going to die”
“Oh shut up, silly woman,” said the reptile with a grin
“You knew damn well I was a snake before you took me in”
President Trump now views the Fed as the greatest threat to the Trump economy. Trump’s handpicked Fed chairman Jay Powell intends to keep hiking rates – presumably until the stock market crashes or some other financial crisis unfolds.
Powell already has visions of coming to the rescue. In recent remarks he called for the central bank’s “crisis fighting tools” to be expanded so that he can pump trillions of dollars in bailout dough into financial firms whenever he deems it necessary.
Investors should brace for a breakout in inflation after the Fed trips up the Trump economy and the government’s massively rising interest payments come due.