Jack Rasmus

Listen to my commentary on the fiscal debate in Congress–Infrastructure bill, Build Back Better bill, & Debt Ceiling–from my last friday, October 1, 2021 Alternative Visions radio show, and then read below it my twitter commentary this past week, Oct. 1-7 as well, on the same topics:

To Listen GO TO:

https://alternativevisions.podbean.com/e/alternative-visions-fiscal-faction-fights-in-democratic-party/

Alternative Visions RADIO SHOW of October 1, 2021

SHOW ANNOUNCEMENT – Fiscal Faction Fights in Democratic Party

Dr. Rasmus describes this past week’s latest maneuvers within the Democratic party with regard to the Infrastructure, Reconciliation & Debt Ceiling bills. Pelosi’s reneging on agreements with the party’s progressives this past week and what it means. Rasmus explains the evolution of Progressives’ positions since last March, agreements made this past July, and why Pelosi has decided on separate votes for Infrastructure and Reconciliation bills. Why the debt ceiling, passed yesterday, was never an issue and why the US can never default on its bonds. The party’s corporate wing strategy to pass Infrastructure and slash Reconciliation. Manchin’s ‘secret memo’ of July and positions. Likely scenarios ahead by Pelosi-Schumer to pass the Infrastructure bill and reconstitute the Reconciliation bill. Why progressives will get outmaneuvered again. The lack of additional economic stimulus amid the slowing of the US economy. The show concludes with comments about the continuing problem of Evergrande to the global capitalist financial economy.

TWITTER COMMENTARY, Oct. 1-7, 2021

Oct 6
#DebtCeilinglimit: is a political farce perpetrated by both parties. Its purpose is to thwart social spending or raising taxes on rich & corps. Only becomes an issue when either spending or tax hikes are on the agenda. Debt limit is irrelevant. Always passes in end. Default never occurs

Oct 6
#DebtCeilinglimit: For every debt there’s a corresponding asset. (You buy a home, incur loan-debt, but the value of your house is the asset backing the debt). So why does the debt debate never mention assets created by the debt? Or decline in debt servicing costs from 3% to 1.8% of GDP.

Oct 6
#DebitCeilinglimit: Dems voted in past to raise debt ceiling to enable Trump’s $5T tax cuts in 2017. Now they want Republicans to do same to share responsibility for 2020 spending/tax cuts. But McConnell giving them the ‘finger’. So who are the fools here, Dems or Repubs? Both?

Oct 6
#US Government debt: has risen from $4T in 2000 to $9T in 2008 to $17T in 2017 to $21T start of 2020. Why? $15T in tax cuts since 2001 & slow econ growth after 2008 (both reducing tax revenues) + $7T in war spending by 2001-20. There’s your $22T US debt, now going to $28.5T due to Covid 2020

Oct 5
#DebtCeilinglimit: would be $ trillions lower today if Trump’s 2017 tax cuts did not happen. Heather Boushey of Council of Economic Advisors finally admits today Trump cuts cost $5 trillion, just as I’ve been saying since 2018. Not the phony $1.5T estimate peddled by the US press

Oct 5
As an addendum to this post, Trump promised in March 2016 during election if elected he’d cut corp-investor taxes by $5T. He did as promised Dec. 2017. McConnell passed bill via budget reconciliation within a week, after no Senate debate. No complaints about deficit & debt then

Oct 5
#DebtCeilinglimit: debate is a farce. Govt controls currency & can print money if necessary to pay bills. Not so for households, businesses, local govts, and countries whose currency is not the global reserve & trading currency–i.e. US dollar. Fiction federal govt must balance budget

Oct 5
#DebtCeilingLimit: Debt level alone is never the problem–whether govt, households or business. It’s servicing that debt (i.e. meeting payments due). Especially when asset prices & bubbles collapse, wages stagnate, revenues fall, tax collection decline. Liquidity & solvency crises follow

Oct 5
#BuildBackBetterBill: Manchin today says he’s open to a package of $1.9T-$2.2T. Biden yesterday said need to cut from $3.5T to $2.1T. Whaddya think? They cut a deal when the two last met, or what? It’s all a nicely coordinated policy dance by the corporate wing of the Dem Party.

Oct 4
#BuildBackBetterBill: Biden today says final package likely about $2T (down from $1.5T and up $.5T from Manchin’s $1.5T)-i.e. three ($1.5T cut in tax hikes) for them; one ($.5T) for the rest of us. Dems getting closer to my predicted no more than $1.8T (if they can even get that!)

Oct 4
#BuildBackBetterBill: Make no mistake. Big US capitalists like Manchin’s stand. Ken Griffin, CEO of private equity, Citadel, interviewed today on Bloomberg TV says “thank god for Joe Manchin”. Gets extended ovation from business attendees audience. Most of his class united behind Joe.

Oct 3
#BuildBackBetterBill: it’s comical to watch progressives try to repackage their $3.5T. AOC says they could cut it to 5 yrs instead of 10 & spend half $3.5T that way. Really! Corp shills in party will accept tax hikes for half the time? Hey AOC: “It’s the Trump tax cuts, stupid!”

Oct 3
#BuildBackBetterBill: Pundits & progressives lump Manchin & Sinema in same shit bag; assume Sinema is Manchin’s echo. Manchin wants deal for coal companies & will agree to some tax hikes. Sinema wants no tax hikes, no spending, no deal. She’s already cut one–with her corp donors

Oct 3
#BuildBackBetterBill: formerly Reconciliation bill. Pelosi-Schumer think Manchin-Sinema will now ‘bargain up’ from Manchin’s $1.5T. Don’t bet on it. Joe will ‘move the goal posts’ backward to make the $1.5T more unattractive to progressives (ex: spend more on oil corp credits)

Oct 2
#BuildBackBetterBill: Manchin can be ‘bought off’ to support final bill with a couple hundred billion for tax credits & subsidies for his coal companies. Sinema not so pragmatic & unknown. Want to know what it’ll take? Ask the big corp donors she’s been meeting with regularly.

Oct 2
#BuildBackBetterBill: Biden plants new ‘stake in the ground’ of $2.3T–i.e. cuts out $1.2T unilaterally. Same move and amount he cut during start of debate on Infrastructure bill last March to get $1.1T. Watch opponents negotiate down from there again. Likely $1.8T endgame, no more

Oct 2
#BuildBackBetterBill: Why is mainstream media focusing just on Manchin-Sinema and not on the corp lobbyists meeting with them weekly and almost daily via phone, email, etc.? Or those leaders of Dem Party supporting them? (“It’s the (Trump) tax cuts, stupid!”, to borrow a phrase)

Oct 2
#BuildBackBetterBill: Pelosi-Schumer retreat & regroup on Infrastructure vote. New vote deadline 10-31. Corporate wing of Dems (Manchin-Sinema) digging in. Meanwhile, no new stimulus as old fades. Deja Vu fall 2020? As supply, inflation, consumer spending, slowing GDP issues grow.

Oct 1
#USeconomy: After consumer spending rose 2nd quarter by 12%, projections are for real spending to grow 3rd quarter by only 1% annual rate (0.25% for quarter). Consumer spending = 68% of US GDP. Other negative economic effects on GDP from ‘net exports’, ending of govt stimulus, and chronic supply side inflation

Oct 1
#BuildBackBetterBill: Pelosi delays vote. Progressives signal they’re interested in framework not a $3.5T number–i.e. they’ll go lower just not publicly for now. How low? $2.5T? So yesterday’s vote deadline was just a test to see if progressives blinked. They did, but not publicly