Insightful swamp summary

Eric Peters, CIO of One River Asset Management

“Tax reform without tax cuts never works,” said the politico. “Because reform makes 50% of taxpayers winners and 50% losers.” To bribe the losers, you need to slash their taxes. The bigger the reforms, the bigger the required bribes. And Republicans want a massive reform package. “But Trump has no money to bribe the losers unless he generates it through Obamacare repeal and BAT (border adjustment tax).” Obamacare repeal was supposed to create $300bln of bribe money, and BAT would’ve generated another $1trln. But BAT also creates winners and lowers.“Trump desperately needs the $300bln from Obamacare repeal to pay off the BAT losers, or that policy is dead on arrival,” continued the same politico. “And that is why Ryan told Trump that healthcare reform had to come first.” The Donald, Pence and Bannon all agreed. “But by the time they finished negotiating Obamacare repeal, they only ended up with $100bln. And even that couldn’t pass.” And $100bln isn’t even enough to pay off the BAT losers. So that’s now dead too. “So major tax reform is dead, so is major infrastructure.”“Most people simply think that Trump can take the deficit higher and solve all of these problems,” said the politico. “But the Byrd Rule prevents any of the kind of plans Trump wants if it increases the deficit over 10yrs, unless he gets 60 Senate votes, which he can’t possibly.”

The last part about the Byrd rule is a voluntary Congressional rule. It matters not, the helicopter is not hedged by some  Congressional badge.