When Donald Trump was three-years-old, he had $200,000 a year, and he was a millionaire by age eight. After college, his father gave him one million dollars a year in today’s money. Then, the elder Trump gave him over five million dollars a year when he reached middle age and left him an inheritance of $413 million, according to The Forbes Magazine. Yet, Trump was $1.9 billion in debt by 2004, filing bankruptcy over and over and over.
It came as no surprise that the man who ran for president on his business acumen has thrown the country into an annual budget reaching and surpassing one trillion dollars for the first time in American history along with knocking up a 22-billion dollar deficit. He appeared to think that it was a system of tariffs that allowed President Dwight Eisenhower (R) build a great interstate system. But he was wrong. It was the 90 percent tax rate of the wealthiest Americans that brought in the cash. Of course, there were loopholes, but still. POTUS tweeted:
‘When our Country had no debt and built everything from Highways to the Military with CASH, we had a big system of Tariffs. Now we allow other countries to steal our wealth, treasure, and jobs – But no more! The USA is doing great, with unlimited upside into the future!’
‘(He) knows that rising interest rates will materially increase the nation’s cost of borrowing, which will in turn increase our annual budget deficit, projected to grow to $1.1 trillion by the end of September. In other words, Trump has realized that keeping interest rates low is his best chance of keeping the leveraged buyout known as the U.S. government from going nearly bankrupt under his watch, just as so many of Trump’s companies did back in the day, and it’s his best chance of keeping his job in November 2020.’
‘Trump is resorting to his usual bullying tactics, not so different from the ones he used on Jeb Bush and Hillary Clinton. Since the beginning of the year, Trump has been throwing a temper tantrum when it comes to Powell. First, the two sat down for a White House dinner in February. Then, according to Bloomberg, Trump went so far as to explore whether he could fire Powell, the kind of unprecedented step that only someone like Trump could consider seriously.’
The president has been having a temper tantrum on one of the best people who has been giving him the country’s financial security:
‘Now Trump just belittles Powell on Twitter and in his clipped, nonsensical public statements. Asked about all this on Tuesday, Trump said, “Let’s see what he does” at the June Fed meeting, leaving the sword of Damocles hanging over the Fed chairman. Could a condescending nickname be in Powell’s future? “Low-Energy Jerry,” perhaps? Trump is like a four-year-old holding his breath until he gets what he wants. And what he wants from Powell are low interest rates.’
This would be very bad news for the U.S. economy. Trump could take us to a “credit freeze,” a “financial panic,” and a “financial crisis:”
‘But it’s very bad news for investors who have bought trillions of dollars of debt securities and loans over the past decade at high prices in search of higher yields. What people too often forget or ignore about the bond market is that when bond yields rise, bond prices fall. When bond prices fall, and billions of dollars of principal are wiped out, often forever, investors get very nervous, and upset, and pull back, sending credit markets into a tizzy of illiquidity and fear, choking off access to the very forms of debt financing that drive the economy upward in the first place. A credit freeze often leads to financial panic and a financial crisis. That’s exactly what happened in 2008.’
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