Many Americans are euphoric. The stock market continues the tear it’s been on since the Obama recovery. Trump inherited it and added gasoline with an irresponsible unpaid-for tax cut scam that is currently providing a sugar high for the capital holding class. Most Americans are waiting their turn for the crumbs that will never come. Why? A crash tantamount to or greater than the Great Depression may be on its way.
A recent Newsweek article titled “There could be a financial crash before end of Trump’s first term, experts say, citing looming debts” that should give us all pause.
Financial experts noted several ominous economic indicators, including skyrocketing student loans and U.S. household debts, that could predict a crash “worse than the Great Depression,” according to a report in the New York Post.
Goldman Sachs predicted that this year’s U.S. fiscal outlook would be “not good,” and that U.S. household debt had been increasing since the 2008 housing crisis led to American taxpayers bailing out the big banks.
In 2018, experts said, a $247 trillion global debt will be the greatest cause of the next cataclysmic financial crash. Additionally, low wages and the U.S. national debt’s steady rise are expected to drag down the economy.
Trump has been touting the snapshot economic numbers that seem mostly positive. But one has to ask what specifically will sustain the growth he claims.
Economists downplayed recent positive indicators such as low unemployment and soaring business confidence, reiterating they wouldn’t last through Trump’s first term. At least one expert predicted that recent slides in housing and auto sales were the first step toward a U.S. recession.
Murray Gunn, chief of global research at Elliott Wave International, told the Post, “We think the major economies are on the cusp of turning into the worst recessions we have seen in 10 years. Should the [U.S.] economy start to shrink, and our analysis suggests that it will, the high nominal levels of debt will instantly become a very big issue.”
Experts cautioned that several economic markers had gotten much worse over the past decade, especially in regard to borrowed money. The U.S. household debt of $13.3 trillion is now far worse than it was during its 2008 peak, due primarily to mortgage lending.
The titans of finance who brought the world economic collapse in 2008, display their continued inability to be trusted at best and their insanity at worse.
Central bankers have also more than doubled global debt as they flooded national economies with cheap and easy money. In 2008, global debt sat at $177 trillion, in comparison to $247 trillion today.
And as the internals continue to get worse, it won’t be called a recession.
“We won’t be able to call it a recession, it’s going to be worse than the Great Depression,” economic commentator Peter Schiff told the Post. “The U.S. economy is in so much worse shape than it was a decade ago.”
The Trump administration along with his Republican cohort’s irresponsible tax cut scam was not enough. To them, it is necessary to make it even worse with their tax cut scam 2.0. And while Trump is blowing up the bubble with his scams, the crumbs are not getting to the middle-class Americans who believed he was going to the White House for them.
Here are three reasons why reducing capital gains taxes would be another tax scam for the rich.
1. The people who’d get most of the benefits are already richer than ever and pay a lower effective tax rate than they have in decades. An estimated 63 percent of the benefits of this proposal would go to the wealthiest one-tenth of 1 percent of Americans, while the bottom 80 percent of us would get only 1 percent of its benefits, according to a University of Pennsylvania Wharton School analysis.
If anything, Congress should raise capital gains taxes, not lower them. The capital gains tax rate is already lower than the rate on ordinary income. Yet the wealthy now own most of the nation’s assets and enjoy most of the capital gains. In 2016 (the most recent date for which data are available), the richest 10 percent owned 84 percent of the entire stock market.
2. The cost of this change would be a whopping $10 billion a year, for the next 10 years. That’s just about the yearly cost of funding free lunches for 20 million poor kids. Yet the federal debt is already ballooning. Over ten years, this proposal would increase it by an estimated $100 to $300 billion.
3. Trump and his administration say they have the power to make this change by themselves without even being authorized to do so by Congress. Rubbish. Congress has already decided that capital gains taxes should not be indexed for inflation. That’s why, when the same idea came up during the George H.W. Bush administration, the Department of Justice’s Office of Legal Counsel stopped it cold.
It’s another big handout to the wealthy, another huge increase in the federal deficit, and it’s illegal. Don’t let Trump and his enablers get away with this tax scam for the rich.
Unfortunately, the crash is likely to come while many continue waiting for their promised crumbs. It’s not happening and Americans will once again be left holding the bag as we bail out the titans of finance one more time.