Friday, December 23, 2016

Sounds like we got a budget buster coming


President-elect Trump’s proposed military buildup will cost tens of billions per year above Budget Control Act cap levels. The sooner the Pentagon receives that funding, the better. Already, House Armed Services Committee chairman Mac Thornberry (R-TX) and Senate Armed Services Committee member Tom Cotton (R-AR) pledged to pursue a supplemental defense spending bill early in the new year. Vice President-elect Mike Pence echoed that call by asking for a defense supplemental within the first 100 days.
The Swampers are adding 'tens of billion' , but given Republican accounting, make that an additional 100 billion/yr.  Adding the expenses from increased interest, Obamacare and we are  looking at 10% increase in spending over a two year period. Taxes are not growing, the Swampers plan to shrink them.

So, we will be back to 3.5%, on the ten year. Congress cannot do that without an increase in the Fed debt purchases. Or, JPM won't be able to get the funds gathered to lend the money at any rate less. Not with G already having a rising deficit and already at 25% of the economy.  That number, 3.5%, is what the Swamp was paying in the midst of the major QEs, so approaching that number means crash, and Fed back in the pits.

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