March 15 will be an interesting time in United States politics. No, it won’t be to commemorate the assassination of Roman Emperor Julius Caesar by high ranking Roman Senators. It will be to debate the debt ceiling once again.
During the Bush years, it was a contentious issue. Democrats fought against raising it, citing concerns about the national debt, and the Republicans were in full support of increasing it. During the Obama years, Republicans were then against raising it, citing concerns about the national debt, and the Democrats were in full support of increasing it. Now that Donald Trump is president, it is rather likely that Democrats will oppose raising it once again, while Republicans will support raising it once again.
As you can tell from this issue alone, politicians do not live by any guiding principles or conviction.
So, what exactly is going to happen on March 15? “Fiscal bloodbath,” warns David Stockman, former Reagan budget director and bestselling author of “The Great Deformation.”
Speaking in an interview with USAWatchdog, Stockman explains that Trump, the supposed man of the people, inherited a mess that the establishment left him from the last 30 years.
“I think we are likely to have more of a fiscal bloodbath rather than fiscal stimulus,” said Stockman. “Unfortunately for Donald Trump, not only did the public vote the establishment out, they left on his doorstep the inheritance of 30 years of debt build-up and a fiscal policy that’s been really reckless in the extreme. People would like to think he’s the second coming of Ronald Reagan and we are going to have morning in America. Unfortunately, I don’t think it looks that promising because Trump is inheriting a mess that pales into insignificance what we had to deal with in January of 1981 when I joined the Reagan White House as Budget Director.”
As everyone concentrates on the president’s speech to a joint session of Congress on Tuesday, Stockman believes that the people are forgetting about March 15. This is when the debt ceiling holiday expires.
Stockman further explains:
“The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt I think we will have a government shutdown. There will not be Obamacare repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”
Not only will you have to witness political theater and flip flopping on both sides, you may also have to experience a “fiscal bloodbath” before your very own eyes.
Will Congress raise the debt ceiling? In any event, it will still be fun to watch so be sure to grab your popcorn and soda and watch politicians from both sides of the aisle abandon their believes once again.