Posts Tagged ‘Federal Reserve’

HOW WILL PRESIDENT TRUMP ELIMINATE ANNUAL FEDERAL BUDGET DEFICITS?

The United States government currently owes over $21 trillion, called the National Debt.   Each year the National Debt is increased by the amount of money the government overspends that year, which is over the amount it collects.  This amount is called the Annual Budget Deficit. When President Obama took office, the National Debt was $9 trillion.  When he left office it was almost $20 trillion.  President Trump continued having hefty budget deficits, mostly because of the higher interest rates on U.S. Treasury bonds that the government is paying, in addition to the cost of bringing back the military to be combat-ready, which had significantly weakened by the underfunding by the Obama Administration.  Consequently, at some point in the next few years, the Federal government may not be able to afford to pay interest on the ever-increasing  National Debt.

This problem is probably the most serious, long-term, one that the U.S. faces.  President Trump is fixing every one of the country’s serious problems (though you would never know it from the pitiful biased Main-Stream Media which simply doesn’t report it) so what does he plan to do about this  upcoming financial disaster?  Here’s what he will do, starting now and ending the last year of his 8-year presidency:

President Trump is significantly increasing revenues to the Federal government by stimulating the business environment in the United States, which has increased the number of people working and the revenues from their taxes, even at reduced tax rates.  He’s also making Americans more prosperous by reducing their tax load and eliminating unnecessary, job-killing Federal regulations.  Most recently, he’s cutting 5% from all Federal Departments.  I initially thought that in a few years the U.S. might not even have a deficit, but with the Federal Reserve continuing to increase interest rates on U.S. Treasury bonds, the interest on the National Debt is much higher today (over 3 %) than it was when Obama was President ( approx. 1 % ).  This translates into the government paying hundreds of billions more for interest on the National Debt than it had been paying only two years ago, and this makes it much more difficult for the government to eliminate its annual budget deficits.

Despite the Federal Reserve increasing interest rates, however, I believe President Trump will still eliminate annual government budget deficits, estimated to be about $779 billion in fiscal year 2020, and perhaps also start paying down the National Debt by the end of his second term, with one caveat.  Trump must have a Republican House of Representatives and a Republican Senate in order to put the U.S. financial house in order.  Democrat leaders will do anything to make Trump fail, including preventing his straightening out the economy, trade, and joblessness.

In the final phase of eliminating annual budget deficits, President Trump will eliminate useless and duplicative Federal programs and pare down programs that have shown only meager results.  This will be unpopular with the general public and that ‘s why he’ll do most of it near the end of his presidency.  How do I know what President Trump will do and when?  Here’s how:

  1. I went to the same school as President Trump, the Wharton School of the University of Pennsylvania, though my Masters was from the FEls Government Center, which back when I graduated (1972) was in the Wharton School.  My focus was on government, not finance, but there still was some commonality between the two programs though Trump became a billionaire and I became a Federal employee.
  2. I’ve followed politics for 60 years, beginning with the Kennedy-Nixon TV debates, and have worked for the federal government for over 40 years, a city government for over a year and a State government for less than a year.
  3. I’ve followed Trump beginning a year before he became President.  I know why he does what he does and can explain most of his actions, unlike the pitiful biased mainstream media.
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