Stockman: “After March 15 Everything Will Grind to a Halt”
Former Reagan Administration White House Budget Director David Stockman has warned that the market is pricing in a huge Trump stimulus, but what will happen is a fiscal bloodbath and a White House train wreck. As for the markets, they are complete insanity. In this interview, he urges listeners to pay attention to the March 15, 2017 debt ceiling deadline, at which point everything could grind to a halt.
Stockman said financial pain is a certainty. He said Trump inherited a 30-year debt build up and fiscal policy that’s been extremely reckless. People want to think he’s the second coming of Ronald Regan; unfortunately, Trump is inheriting a mess that pales in significance to that which existed in January 1981.
Stockman said that this is the greatest suckers’ rally of all time. Trump is inheriting a built-in deficit of $10 trillion over the next decade under policies that are built in. Yet he wants more defense spending; sweeping tax cuts for corporations and individuals; more money spent on border security and law enforcement; more for veterans; and a trillion dollar infrastructure program. It won’t happen with $10 trillion of debt coming down the pike and $20 trillion already on the books.
Stockman says that people are missing the significance of March 15, 2017. That’s the day the debt ceiling holiday that Obama and Boehner put together expires. The debt ceiling will freeze at $20 trillion, and will then be law. The Treasury will have roughly $200 billion in cash, while the US is burning through cash at $75 billion a month. By summer, it will be out of cash, and there will be the mother of all debt-ceiling crises. Everything will grind to a halt; there may be a government shutdown. There will be no Obamacare repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will just be a fiscal bloodbath over a debt ceiling that has to be increased, and no one wants to vote for.
Stockman also predicts positive price moves for gold and silver as a result of the coming budget calamity.