Please mark the above comment, July 3, 2025, by House Majority Leader Steve Scalise (R., La.).
A Triumphant House
The Wall Street Journal reports House Passes Trump’s Megabill in GOP Triumph
The House narrowly passed Republicans’ sprawling tax-and-spending bill, delivering a major second-term victory for President Trump and again demonstrating his power to keep GOP lawmakers in line.
The 218-214 vote Thursday sends the measure to Trump’s desk, ahead of the July 4 target he set for Congress to finish the legislation that cuts taxes, boosts border security and lowers social safety-net spending. Trump and GOP leaders muscled the bill through the House after an all-night session, despite many lawmakers’ misgivings about the version the Senate passed 51-50 earlier this week.
Two Republicans—Thomas Massie of Kentucky and Brian Fitzpatrick of Pennsylvania—voted with all Democrats against the “one big, beautiful bill.” The vote followed a long day of negotiations with conservative and moderate holdouts, with Trump and Speaker Mike Johnson (R., La.) eventually swaying enough members to prevail.
“We are at the precipice of the new golden age of America,” said House Majority Leader Steve Scalise (R., La.).
“Republicans are standing up for the American people, putting more money in their pockets,” said Rep. Jason Smith (R., Mo.), chairman of the House Ways and Means Committee.
Both parties are eager to use the megabill in next year’s campaigns, when Republicans will try to defy midterm-election trends and hold the House. They now control it 220-212, with three vacancies created by Democrats’ deaths.
The House floor was in suspended animation all afternoon and evening and then again through midnight as GOP leaders held votes open. For a while, there were five Republicans voting against a procedural motion—enough to block the bill—and Trump was posting on social media to urge them to get in line. They relented after 3 a.m.
“I trust President Trump,” said Rep. Lauren Boebert (R., Colo.) “He has been right about everything.”
Self-identified fiscal hawks capitulated, too. Less than a month ago, 38 House Republicans led by Rep. Lloyd Smucker (R., Pa.) signed a letter saying that they were “unequivocal” in limiting the size of tax cuts by linking them to spending cuts. The House plan, which said that tax cuts couldn’t be $2.5 trillion more than spending cuts, was the “minimum standard” for their support of a Senate-passed bill.
The Senate bill fell more than $500 billion short of that target, and in all it will increase budget deficits by $3.4 trillion through 2034. “At some point, we have to accept that we pushed it as hard as we can,” Smucker said, citing the spending cuts. “We can’t control what the Senate does. We tried as hard as we could.”
The “Unequivocal” Alleged Fiscal Conservatives Punt
This ended the way I said it would all along.
There is one or two fiscal conservatives in the House. The rest are liars and charlatans, along with Trump.
In the end, 36 Republicans voted for a bill they said they could not vote for. Anyone who expected anything else now looks like a fool. Heck, as late as yesterday, several people told me rep Massie had the votes to block this.
Political Arrogance on Full Display
Arrogance by politicians is seldom rewarded. And the arrogance today is nothing short or amazing.
In a variation on Trump’s prior “golden age” comments, Majority Leader Steve Scalise said “We are at the precipice of the new golden age of America.”
Rep. Lauren Boebert (R., Colo.) said “Trump has been right about everything.”
Those statements will be repeated over and over when recession hits.
Precipice of Recession
The economy is weakening on many fronts.
And the “always right” Trump will clobber small businesses with inane tariff policy.
But hey, today we can cheer looking over the precipice of recession. Party on.
Related Posts
July 3, 2025: Jobs Beat Expectations, Up 147,000 in June, but Government Jobs Rise 73,000
Government to the rescue?
July 3, 2025: The Rise in Continued Unemployment Claims Shows Difficulty in Finding a Job
If you lose a job, it is increasingly difficult to find one.
June 20, 2025: Did the Fed Just Predict a Recession for Later this Year?
The Fed does not “predict”, but its GDP projections say “yes”.
Meanwhile, please consider Gold Soars to Another New High, What’s the Message?
With 3 consecutive financial bubbles already under the belt, it gets harder and harder to push on a string. The other week Mish had a chart showing it taking $10 of debt to get a $ of GDP.
Wealth is created and wealth is destroyed. Thus the Great Reset, the Great Taking, the Fourth Turning War, are popular themes theses days.
So golden …
Slavery, or at least indentured servitude, is back in the US:
https://x.com/Kaos_Vs_Control/status/1941209803197686238
Politicians will say whatever it takes to appease and ingratiate themselves with their master.
The republicans have figured out the worse they make life for their constituents, the more their constituents blame the democrats.
Self victimization is always sad to see… but my sympathy is gone, to the point I’m damn near in the eugenics camp now.
Stupid should hurt.
I see a lot of self victimizing by democrats, here in California.
Just another year of kicking the can down the road. Musical chairs on the Titanic. No recession when it stops and the world depression dominoes start falling.
Should pretty spiffy camps too, with all the money the gestap….er ICE is getting. More than the entire Russian military. More than the marines.
Get a rifle while you still can.
Rifles are so last century, get a small drone it can carry a grenade.
86/47 legal nonviolence, impeach, 25th or god anything will do. This must be done asap, everyday the US gets closer to Germany 1939.
I can’t find grenades on amazon though.
On the bright side, the new Gulag Archipelago system Trump is setting up will be a great source of slave labour.
Delusional at best ….
Kicking millions off health care and building concentration camps in the swamps, what could possibly go wrong?
Concentration Camps? Please explain
It’s like a big outdoor cage that holds thousands of people snatched up without habeas corpus, for an indeterminate amount of time.
Some even feature extermination rooms.
Here’s a brand spanking new one, yet to be soaked in misery, despair, and filth: https://www.pbs.org/newshour/nation/first-immigration-detainees-arrive-at-alligator-alcatraz-in-florida-everglades
At this point if you need it explained, you’re part of the crime
Maybe this is unfair, but after bankrupting 6 of his businesses, Trump is now trying to bankrupt the federal government. It would certainly earn him a place in the history books.
Gambling with cheap money is Trump’s trademark. Let’s see if we get a more flexible fed chief, one more tolerant of bankruptcy.
Other people’s money. He’d have more of daddy’s left if he’d just put it in an index fund.
All while enriching himself to the tune of billions before he’s out. Already a hundred times more than any other president or son in history. And we may never know who his donors are. Corruption on steroids…
Too late. The Federal Government was Bankrupted years ago by lying Democrates and cowardly Rebublicans. Trump just moved the colapse date forward by several years. But those of us that know it’s comming are well prepaired Right!
PS: Why do you think Mish now lives in Idaho.
After talking to Trump Putin blasted Kiev with 500 missiles and drones. After every ceasefire to release a few hostages Hamas rejuvenates killing dozens of Israeli soldiers. Bibi sacrificed his best troops for a few corps. Hamas bent Israeli elite will. They outsmarted Bibi during Gilad Shalit and now. Is Trump selling F35 to Erdogan in a secret deal. What will happen If Greece and Turkey, two NATO members, start a war. Centrifugal forces can break NATO apart.
LOL
I’m sure glad trump brought peace on day one like he said he would. All the peace drones were fired in celebration. Russia is SOOOOO happy to be at peace now!
People use the term intermediation as if it’s a conduit between savers and borrowers. When you encounter the word, it generally refers to the banks, as if the SLR is going to promote the savings investment process.
No, the only way to activate monetary savings is directly or indirectly via a nonbank conduit.
Shifts from TDs to DDs within the DFIs & the transfer of the ownership of these deposits to the NBFIs involves a shift in the form of bank liabilities (from TD to DD) & a shift in the ownership of (existing) TRs (from savers to NBFIs, et al). The utilization of these TRs by the NBFIs has no effect on the volume of DDs held by the DFIs or the volume of their earnings assets. I.e., the non-banks are customers of the deposit taking, money creating, DFIs.
The trajectory of money flows, the volume and velocity of money decelerates in the last quarter of 2025. Expect rate cuts a little before or then.
Expect nothing. Prepair for everything.
Spencer, mercy !
There are debates about R’s & D’s as to their differences. Remember that they agree and are unified on: 1) Continued Wars on _______. 2) BORROWING. 3) Lobbied on EVERYTHING. 4) SELLING US OUT. 5) PANDERING TO THEIR SIDES.
It is a circus. It is grand-standing that is vapid, and I bet my best friend, a die-hard MAGA, that Trump would get it through. He is MAGA to a point but a fiscal conservative. He lost $120.
I have what might sound like a crazy idea for this deficit/debt problem, but here we go: let’s … raise taxes and cut spending (including SS/Medicare/Defense).
That’s IMF policy for third world countries. If SPX rises to 7K there will be no rate cuts. But if SPX will be in accumulation for a few months, at the lower half of Feb/Apr – JP will cut at least twice.
Golden age?
Lets look at this from a historical perspective:
Late in the Roman Empire, the people found themselves attempting to support a government with a massive military ~ spread thin on many fronts.
Their currency had some value, but it was being devaluated as the government was systemically over extended.
First they put a little copper in the gold coins and then more, and more until the coins had no value at all.
Now think Weimar, Argentina and Zimbabwe! Classic hyperinflation by governments that saw unlimited printing as the solution. The printed currency was worth more as a heat source than it had buying power.
Today much of the world is systemically over extended. The U.S. is not an exception. We are the strongest nation militarily, and our consumers are living a very high standard of life.
We have it very good and our peoples curiosity and our technological innovations remain remarkable and cutting edge.
Yet our government can not control its spending and, at some point it will catch up.
I’m not a goldbug, or a tinfoil hatter, or a survivalist, but diverse financial investments have been shown to perform best over longer periods of time. Gold and dividend paying, high quality mining shares should occupy a couple percent up to 10% of most peoples portfolios.
>
True, but there is also a financial war of Alexander before that: he purposefully diluted his own currency, to make it cheaper than the Persian currency. This way, merchants preferred the diluted currency, because they could buy it cheaper (it was more available) to trade.
Availability matters.
During the 1919/21 recession Ford sold more than a million cars and trucks
in 1920 and in 1921. Cars, trucks and planes replaced horses and trains. Radios and phonographs. Lindbergh flew to Paris. GE light bulbs and generators. Toilets replaced sewer in the streets. The music didn’t stop under Andrew Mellon, but Florida was a disaster, Hoover was spending money all over the place, NY Fed Ben Strong was an anglophile and the banks financed speculations.
“We are the strongest nation militarily,” yet we’ve lost or tied every war since WWII. Can you explain that?
86/47
Instant tax cuts and regulations cuts. Immediate (within a few months) rate cuts and a smaller gov. Tariffs protect workers and trillions of new investments. Prepare for a war if u want to prevent one. After Ukraine, Jasa, Hezbollah, the Hooties and Iran we depleted our high and low end weapons. That can spell disaster. Smaller wars test the validity of our systems and capacity. Pacifism will not protect us from aggression. The stock market will do whatever it want, but JP will do whatever to prevent recession in 2025 and in Q1/Q2 2026. Dynamism might prevent recession in 2026/27. SPX might takeoff from the launching pad in 2026 and stay up for years.
And won’t matter one iota as anyone with a memory or access to the internet/a library/AI should be able to recall from numerous past political campaigns.
Most people’s attention span is short. For most, voting isn’t done by carefully weighing all the issues and past histories but instead, a vote is cast based on the one, two or three favorite issues/digs against the other side that are currently in the news rotation, who is viewed as the lesser evil and who has more camera charisma. .
In the last election, Trump, weirdly enough and with the US knowing ALL Trump’s past history, was still considered the lesser evil and far more charismatic compared to Harris.
This should inform Dems when making choices for future campaigns, but near as I can tell from my daily media consumption, it hasn’t. Whew.
Boebert is qualified for the back seat at a drive-in.
How so? She a big fugly
Not an issue with the lights turned down/out!
She would have been the Trunk fool.
“In the last election, Trump, weirdly enough and with the US knowing ALL Trump’s past history, was still considered the lesser evil and far more charismatic compared to Harris.”
The continuous lies by the trump campaign repeated ad nauseam by right wing and msm helped him with his cult and the election.
86/47
With this Big Beautiful Borrow and Spend Bill, will everyone be in competition with the government in the lending world??? Will rates rise because of bidding for available credit???
“Golden age”
Does that mean that the dollar will be heinously diluted and you better load up on Quality gold mining shares and a couple bits of the shiny stuff?
>
sure. if you want to be 3 years late to the party.
I recall when Bitcoin hit $3,000. People said “Oh man, I missed the boat on that one”. They did not buy in, and now it is at $108,000 and people are saying the same thing.
With a fundamentally late in its life currency, and a free spending spending government that has its military spread thin all over the world?
A small amount of physical gold and ownership of the producers of that gold has been a fantastic investment.
History does not repeat itself, but it sure as hell does rhyme!
owning gold as a long time part of your portfolio is always wise. trading gold is asinine. trying to equivalate the ceilings on gold and Bitcoin is equally asinine. finally, if you’re going to steal somebody’s quote, at least give them credit.
In the financial war of Alexander, he purposefully diluted his own currency, to make it cheaper than the Persian currency. This way, merchants preferred the diluted currency, because they could buy it cheaper (it was more available) to trade.
Availability matters.
Bitcoin is a good deal for now, but one has to examine all factors associated with currency risk. A potential socialist government in the USA may outlaw it.
I side with Massie, but it seems like you are always expecting a recession Mish.
This looks like a Borrow and Spend Bill, rather than a Tax and Spend Bill.
Yep. As a general rule: Republicans borrow and spend; Democrats tax and spend.
Yep, Those Borrow and Spend Republicans.
From those two, tax and spend sounds more sustainable and fair to me. Perhaps unless the borrowed money is used for genuine investment. Padding billionaires’ pockets with borrowed money, not so much.
The billionaires don’t need the government’s borrowed money. They have the Federal Reserve.
I am not a supporter of either party or their economic preferences. I am just an observer. And someone who looks to take advantage of whatever they decide to do.
That would appear to put Democrats’ fiscal policies on a sounder (not sound) basis than Republicans’. I am forced to admit the possibility, but it’s a difficult concept that causes me a headache to embrace…
Historically, and statistically, Democrats are better “managers” of the economy than Republicans.
Their GDP growth numbers are better; and stock markets have better returns when Dems are in power. That’s the stats. Not a recommendation.
And Dems have far fewer recessions.
Every Republican president since 1920 has had a recession begin during their term. 11 Republican presidents;
14 recessions. Dems had 4 recessions since 1920.
Or, since 1953, Republicans had 10 out of 11 recessions.
Or, since 1981, all 5 recessions.
It’s a myth that Republicans manage to perpetuate that they are better managers of the US economy.
Let’s clarify that general rule tax part.
Dems tax the rich without adding meaningful deficit solving revenue.
Dems borrow just as much as Republicans.
Both spend more than they should on their “priorities”.
The problem with Republican Congress members is they think cutting taxes is going to cut meaningfully into the deficit just like Dems think raising taxes on the rich will do. Well, they’re right. It does raise revenue. The problem is that we lose more revenue than we add back to coffers.
At this point, it’s meaningless really to point of each party’s shortcomings. Nothing is going to change until we have our debt crisis moment.
Up until that moment, it’s just a bunch of finger pointing.
Correct. I point these things out simply because I like to piss off the MAGA faithful who seem to think that their party is better at managing the economy. Lol! They drink too much Kool-Aid.
As I frequently say, it is more important to work hard, ignore politics, and improve your life on your own because no politician or political party is going to do it for you.
Papa, you are a smart guy: BOTH parties BORROW and SPEND. The tax part is ignored largely.
LEGIT!
The Republican politicians took their makeup and campaign masks off.
Then with their hypocrisy fully exposed ~ voted to opposite of what they promised.
Don’t you despise the bald faced liars in action?
Charlatans!
<
.
Many years ago, at least where I live, candidates would occasionally appear on ballots from a “K*ll All Lawyers Party”. I suspect such a thing has been outlawed, and probably wasn’t ethical anyway. However, at this point I might be able lend support a “K*ll All Politicians Party”. Decades ago I was a member of Byte Magazine’s “Byte Information Exchange” forum (“BIX”). Another member, one Lt. Col. William Clardy (USAF Ret, iirc) had a novel proposal regarding term limits. His idea was that anyone could seek and be elected to political office once without punishment, but that anyone who sought reelection would be required to first sign a binding agreement to be executed at the conclusion of his or her second term. Perhaps we should seriously consider something similar. After all, it would result in significantly less bloodshed than an outright revolution, and, unlike anything that has been attempted to date, might actually make some progress on reducing government overreach.
They’re playing their usual game, Supply Side Economics.
The good news is that 2025 is probably the last time the GOP will be able to play this game.
In addition, 2020-2024 was probably the last time the Dems played their game.
Whoever the emperor is that takes over in 2029 will have to but on their clothes, including their big boy or girl pants to make some VERY HARD LEADERSHIP decisions about tax & spend.
Agreed recession is coming, but it was coming no matter what happens. It’s one big baked cake- people are broke
The real question is who gets to take the worst bath when that happens: those who were prudent with their earnings, savings, and investments; those who were profligate with same; or the legacy parasite class? My guess it that it will probably be the first group, as it will follow (like so many other dynamics in our society) the “no good deed goes unpunished” principle. The only guarantee is that the political class and the connected corporatists whom they represent will not only be spared, but will doubtless prosper at the expense of the rest of us.
All recessions are due to monetary policy errors period.
On a silly note, fun reply’s requested, how is it that every single candidate running for office for the last 100 years, has said “we’re going to cut you taxes”, and yet we’re still paying taxes??? Shouldn’t the tax rate be zero by now?
You’re confused. They’re going to cut the billionaires’.
Don’t worry. You’ll get food stamps. Its free.
Permanent tax cut…
An oxymoron if there ever was one…
This is the dawning of the Age of Aquarius.
Krainer –
https://alexkrainer.substack.com/p/why-governments-cant-balance-their
There is a society existing today that is deemed best in the world.
You volunteer.
Your superior tells you what what function to do every day
Maybe a cook.
Maybe a paper pusher.
A recruiter.
Laundry laborer.
Assassin.
Every one has a gun and knows how to use it.
Thus society is paid in government funds, that is, taxes.
Your superior tells you what to wear, when to go to bed, when to wake.
When to work, days off, how much you make according to your value to the society.
Be all you can be in the United States of America MIC.
We only have to figure out how to make everyone wants to volunteer from the womb.
Utopia.
Nobody knows a debit from a credit. Banks don’t lend deposits. All bank-held deposits are lost to both consumption and investment. Drive the banks out of the savings business and the economy will boom.
None of the spending cuts kick in for awhile. The tax cuts on the other hand are immediate. I predict a boom since the top 20% are responsible for 80% of consumer spending.
I am no fan of Trump but I think he will continue to prove everyone (including some former MAGA people) wrong. Deportations are coming and those on the dole will go back to work if they want to live.
The socialists in Greece in the 80s created useless services and offices all over the country, where middle-aged people were doing nothing. Officially, they were “at work”, so the official unemployment rate was down. They cost the taxpayers a lot more than the unemployed.
It was like the USSR where you had millions with “job titles” doing nothing, just to satisfy the numbers.
In the USA we have lots of people living off their parents life insurance, but all they do is a small YouTube channel with an income of $10/month. Supposedly employed.
Correct me if I’m wrong but aren’t most of the “tax cuts” simply extensions of existing ones? In other words a net neutral effect?
There are a few at the margins that are net new, like writing off auto loan interest and a new tax credit for seniors. But those won’t kick in until tax time in 2026.
The auto loan one will encourage drunken sailors to buy more overpriced vehicles,
The next two years are a black box. We don’t know what will happen next. The BBB is a law written for the forgotten peoples and the middleclass. It’s about work. it’s about reducing bureaucracy and regulations. If the dems takeover they will not hurt these people. They might weaken Trump’s grip on the illegal immigrants and tariffs. but they will not change the dynamic potential of this law
A little of what you said is true, but it’s also a ginormous increase in “defense” spending. For no good reason whatsoever.
“For no good reason whatsoever.”
[lol] For political campaign contributions. For biggest military dick world bragging rights. For free junket rips and dinners at expensive restaurants from MIC lobbyists.
Hi dunce has anybody told you that Stephen Miller holds 32 % of the co ICE receiving billions to corral emigrants or anyone they find…
Source?
I have very good imagination don’t you think but I’m gong to allow you to do your own research.
This law is very much about borrowing money so billionaires can be taxed less. The forgotten people will be even more forgotten, especially if they have a health issue. The middle class will pay the price via inflation pushing prices higher.
Trump said he loves Medicaid. He won’t touch Medicaid.
Surprise! The only significant cuts in the budget were to Medicaid.
Trump also said he loves Social Security and Medicare. Now we know what’s next on the chopping block.
It’s tough love:
if it’s love you were expecting…
tough.
The cuts on Medicaid is only to stop coverage for illegals that should never have been on it to start with and cutting fraud. There are over 7 million able bodied working age males that aren’t working. I don’t know how many able bodied females not working. These people should NOT be able to get coverage on Medicaid.
Cite for these figures?
Illegals really don’t get Medicaid. Some states give them healthcare out of state funds only, not federal. But if an illegal goes to an ER (and of course don’t pay) the hospital is reimbursed for the care out of Medicaid funds. I don’t see how they’re going to stop the ER care. There is a law (EMTALA) that requires hospitals to treat all comers without regard to insurance.
That’s why we need to get rid of illegals. If they aren’t here then they can’t get any free stuff.
People who lose Medicaid will go to the ER, then the hospital will write off the bill, then your insurance rates will go up to pay for it. Winning!
People who go to ER only get treatment for Life saving medical conditions. They don’t get follow up care or prescriptions.
No housewife should be eligible for benefits. Get them out working!
Mish, won’t this reckless deficit spending keep the economy propped up and out of a recession?
Presumably that’s a major point that Trump used behind the scenes to get it passed. No recession into the mid terms means Republicans have a much greater chance to retain control of both houses.
I don’t think it’s true that deficit spending can keep economies out of recession forever. It seems like the cost of the debt servicing and or inflation will become too much of a drag especially when the stock and RE bubbles finally deflate and the illusory wealth vanishes and people start cutting spending for risk aversion. The long term bull trend can reverse and become long term bearish.
“No recession into the mid terms means Republicans have a much greater chance to retain control of both houses.”
Even if that works (it’s possible) the salient question is “and then?“. Trump and many, if not most, of these Republican Congresscritters campaigned, at least implicitly, on the premise that they understood the folly (impossibility, actually) of kicking the debt/tax/borrow/spend can down the road endlessly. What changed, where do they see this ending now, and where and how do they expect to find solace and shelter for themselves and their loved ones when that can finally bounces back off of an impassible brick wall? Do they think that as long as the rest of the world is in worse financial shape than the US, all will somehow be well here? When the bill finally came due for the excesses of the Roman Empire, I would bet you that it was still a much better place to live than most of the rest of the world, but that didn’t stop the barbarian hordes from overrunning it in fairly short order.
Mostly this is an extension of the existing tax cuts from 2017 so there will be minimal/no stimulus effect (tax rates won’t change from the status quo for most people). Cutting back on the various $ for green energy/infrastructure projects will be a hard hit in various places, though, regardless of what you think of the wisdom of funding those projects in the first place.
I agree.
In my language, you’d say most of them aren’t just cowards but literal doormats (the expression is about someone accepting being used as a doormat)
Payroll: 161M. Federal gov: 2M. State and local: 21M ==> 23M/161M = 14%. The trend is down since 2010. When a larger private sector takes over and the gov will shrink: this ratio will fall be below 10%.
One can meaningfully disagree about the spending and tax provisions in the BBB, but that it sets the country on a trajectory that can only end in a fiscal crisis, i.e. high inflation or partial default, is not disputable.
So basically the same old same ole for the last 30 yrs, just closer to the finish line
The clowns we elect apparently do not believe in any “finish line”, or do not expect to live to see it.
Our country had some problems but it was overall pretty good. A shame how carelessly reckless it is being risked. It seems that many people have little awareness or appreciation of what could be a serious problem. Our population has forgotten that if something good (our nation) isn’t maintained (managed responsibly), it risks being lost.
“A republic, if you can keep it.” — Benjamin Franklin, September 17, 1787
But, but muh democracy…
The US did not keep it. It is not a functional republic, but more of an oligarchy with the Administrative State and the ruling class fighting over the details that the National Security State permits. It’s time to recognize the truth.
So what is it with Louisiana politicians?
Fawning sycophancy extraordinaire.
Hakeem the regime change was masturbating in public for hours. He is boring, He has no charisma like Obama. He is a captain of a sinking ship. Even if the dems takeover the house they will not dare to impose draconian taxes on the middleclass. BBB is the law of the land.
talking for 9 hours and accomplishing nothing is the greatest metaphor for the Democrat party these days.
I had the same thought (on Steve Scalise).
“We are at the precipice of the new golden age of America.”
I agree 100%. The BBB ensures for Trump’s last term that we’ll run $2T+ deficits. So if you love big honkin deficits, then the BBB is your Golden Age. If you don’t, then you’re going to have to wait a bit longer for fiscal sanity to peek through the doors of Congress.
All eyes are on Bessent & Powell as to how well they can gerrymander yields on short-term treasuries lower without creating a massive spread between them & long-term bonds.
Sayonara to the Supplemental Leverage Ratio! It’s spring 2020 all over again (aka Stealth QE)
‘Fiscal sanity’ left Washington DC decades ago and will never return.
I recall when a prominent Congressman of the time made the statement, “A million here, a million there, first thing you know you are talking about real money” (Sam Rayburn, maybe?) and it wasn’t intended to be a joke.
Sen. Everett Dirksen (and it was “billion”).
Those giant deficits should prop up the economy to prevent a recession which is important going into the mid terms next year. If the economy falters then the Republicans will almost certain lose control of both houses. Hence the importance of spending recklessly to prevent that from happening.
You consider that to be justification? Talk about groupthink…
I said that’s the reason. I did not say I support that reason.
“stealth QE” Sounds right.
Outrageous fiscal outlays beginning in 3… 2… 1.
No chance in hell of a recession beginning before Jan 1. Rate cuts likely on hold for two more Fed meetings unless FOMC members bow to personal threats.
Debt at the end of fiscal 22019 was just shy of $27 trillion; today its around $37 trillion for an increase of $10 trillion. For the same times respectively, GDP was $21.7 trillion and $29.6 trillion for a gain of roughly $8 trillion. Over the time frame, there has been a negative stimulus benefit of $2 trillion dollars or $200 billion per year. For fiscal year 2024, GDP has grown from $28.3 trillion to $29.7 trillion for a gain of $1.4 trillion, while the deficit was $1.8 trillion. The stimulus effect was negative $400 billion. This suggests that the return on stimulus is eroding. The budget plan to grow our way out of the fiscal mess cannot be fixed with stimulus that has increasing negative efficacy, the mess can only be repaired by spending less than revenue and paying down the debt.
And by 2030, it’s going to be $50.
The only question is where will treasury yields be?
How high can interest expense actually go before something breaks?
nailed it.
Yes, it seems to me the “stimulus” is only making things worse.
You don’t understand how politicians are elected in the USA.
Tip: It’s NOT through cutting benefits and spending.
I suspect there could be some plan afoot to re-base the official US currency. I will not be to gold; notice how absolutely all talk of auditing the reserves at Ft. Knox has totally disappeared from political conversation? That is to me a clear indication that any such audit would require admission to the US public that those gold “reserves” have been nothing but a long-standing fraud committed by politicians of both parties for decades. I suspect there will be a move to some kind of national, official, cybercurrency (non-anonymous, of course), where not only can value be manipulated by FedGov, but where virtually every transaction by anyone, for anything, can be monitored by same. That is not only a financial issue. Think of the leverage that knowing absolutely everything an individual does confers on whoever possesses that knowledge, and what a potent tool to suppress dissent that leverage represents.
Nope. The Union won’t hold.
Tax cuts for the rich and cuts to the social safety net, plus tariffs – which are essentially regressive taxes. The latter two will hit those with the highest propensity to spend the hardest. Recession is all but inevitable- it’s just a matter of when.
I call BS on those claiming tariffs are a tax on anything other than corporate profits in imported goods. If you don’t agree, it’s time to out up or shut up. Show us some actual data indicating that the price of anything economically significant has risen meaningfully due to tariffs?
What I see is: oil prices down. Car prices flat to down. House prices falling. Food prices stable except for some processed unhealthy stuff.
Inflation is currently driven by services not goods, and services pretty much aren’t imported.
Agree. Even Mish, who has yet again been proven wrong about tariffs being paid for by the American consumer, is now touting the harm to small businesses, just as he has sadly done with restricting illegal immigration and increasing deportations. Frankly, if you are a small business and have to revert to hiring low paid illegals, you should be run out of business.
Whatever, everyone already knows you’re a Trumpite so you have to defend his policies always
There is such a thing as a corporate profits tax. If you think tariffs are a tax on corporate profits (which are the REMAINDER from revenues – expenses), you need to re-read your tax book. Tariffs are levied as a specific percentage on the dollar value of imported GOODS. By definition, those are not profit taxes.
But yes, of course, any taxes – including tariffs – may increase prices, or reduce profits, or both, or stop production entirely. That’s why economists study such tariff policies and most agree they are inflationary.
Actual data? You know that does not exist so your rant is a red herring and shows you are tilting at windmills. Alternatively, where is your “actual data” that tariffs are a tax on corporate profits? I won’t wait for your proof.
‘actual data’ does not exist because it’s a cause-and-effect relationship. The only reason any prices rise for any product/service is because a producer believes they must (costs like tariffs) or can (increased demand) raise prices. Mish published excerpts from the ISM surveys where many producer respondents lamented about the pricing impacts of tariffs. I guess they are all delusional?
But if you think tariffs can’t possibly cause inflation, then I guess the federal government should go ahead and raise payroll taxes and alcohol/firearm taxes and gasoline taxes since those are also taxes on specific goods. And we all know that we pay the same prices for those goods no matter what the tax rate, right?
I have no clue what you’re saying about actual data. I can, however, show you actual beta that demonstrates there was no sustained inflation in the United States prior to 1913. I’ll let you connect those dots.
Show us how the Civil War inflation was a myth according to you.
because of the deflationary period that followed.
There is actual data showing goods prices not increasing overall. There is actual data specifically showing auto prices dropping so far.
There is abundant data showing that the consensus opinion of economists is frequently wrong. That is why I’m asking not for your opinion or theirs, but for actual real world data.
You have no clue what I believe and your ad-hominem straw man arguments waste everyone’s time, which is why you will remain on my ignore list.
Sure. I will give you a couple of examples of simple retail price increases because of tariffs:
Volvo EX30EV: MSRP $34950 to $46195.
Hamilton Beach Electric Kettle $49.99 to $72.99.
Soccer Ball: $17.99 to $22.99.
Satisfied? Or do you need a few thousand examples before you realize that tariffs are not 100% absorbed by the importer.
On the plus side, at least you realize that the tariff is not being paid by the exporting country, like Trump keeps repeating.
Trump’s tariffs would cost U.S. employers $82.3 billion, potentially causing price hikes and layoffs
Jul 2, 2025 1:01 PM EDT
WASHINGTON (AP) — An analysis finds a critical group of U.S. employers would face a direct cost of $82.3 billion from President Donald Trump’s current tariff plans, a sum that could potentially be managed through price hikes, layoffs, hiring freezes or lower profit margins.
The analysis by the JPMorganChase Institute is among the first to measure the direct costs created by the import taxes on businesses with $10 million to $1 billion in annual revenue, a category including roughly a third of private-sector U.S. workers. These companies are more dependent than other businesses on imports from China, India and Thailand — and the retail and wholesale sectors would be especially vulnerable to the import taxes being levied by the Republican president.
The findings show clear trade-offs from Trump’s import taxes, contradicting his claims foreign manufacturers would absorb the costs of the tariffs instead of U.S. companies that rely on imports. While the tariffs launched under Trump have yet to boost overall inflation, large companies such as Amazon, Costco, Walmart and Williams-Sonoma delayed the potential reckoning by building up their inventories before the taxes could be imposed.
…
https://www.pbs.org/newshour/economy/trumps-tariffs-would-cost-us-employers-82-3-billion-potentially-causing-price-hikes-and-layoffs
See “economically significant” in my “provide data” question. Japanese autos are down in price, more than offsetting the tiny number of Volvos.
As for 1 brand of cheap electric kettles and soccer balls … you’re making my point.
The prices of individual goods fluctuate all the time and you can cherry-pick anything you like.
None of you has any data showing overall prices rising from tariffs.
Lol!
When someone drinks as much cult Kool-Aid as you, you can justify anything. You would argue that the world is flat if Trump said so.
I could give you a thousand more examples and you would just come up with more lame excuses. You’re a waste of my time.
Dumb f*ck.
You’ve just joined Hubris’ “let’s call them names and associate them with Trump” illogical-rhetoric bandwagon, but since you do t know me you’re just proving that you’ve got nothing. And that bandwagon is not going anywhere, certainly not in terms of finding tariff-driven inflation.
Tariffs are affecting bigger businesses at the moment. These are companies whose profit margins are in the millions, low to high. There are surcharges being placed on high dollar acquisitions in the neighborhood of 25%. Foreign companies are warning their US costumers that tariffs may or will cause commodity prices to rise without notice. My car service department is now charging a CC fee for all transactions. First time ever since I’ve been going there 7 years. Parts will obviously cost more. Tariffs are running thru manufacturers now. They will be coming to a vendor near you soon. Oil is an industry onto itself as well as housing. There are different market forces at work there. However, my power company just increased its fees 25%, OVERNIGHT! Let that sink in.
Your power company isn’t dependent on imports, nor are credit card fees. Nothing else you said shows any evidence of actual costs to consumers actually increasing.
I get that you’re worried but that is not the same as real economic pain from tariffs.
There is serious inflation in food that I have been noticing here in the CA SF Bay Area.
If the deficit is going to skyrocket with this bill I fail to see how there can be a recession since all the money being spent should prop up the economy.
It could push a recession further into the future. My base case remains a recession beginning by year end. My first actual recession call in all the years I have been commenting here.
What’s next? Are you going to vote in the midterms?
Nope.
More like stagflation.
Yep.
My call is the next recession doesn’t happen until we’re knee deep in AI / robotics layoffs.
Microsoft just announced another 9000 layoffs. They had similar layoff announcements in January, May and June. They are cutting costs in order to free up $80 billion for capex spending on AI this year. They also expect AI to help improve efficiency of remaining employees.
The build out of more AI data centers is putting strains on our electricity supply. Simply put, we need a lot more electricity and grid improvements to go with it. Electricity prices will be going up as a result.
More data centers may be built outside the US if we don’t have the necessary electricity to power them.
AI is currently used by nearly all of the major players to run LLMs that are trained on the cheapest data possible (general internet publications). Little, if any, vetting for accuracy is done, because at this time, that would require human (expensive) review. It is essentially an expert system with no experts. That vector is doomed to fail, and the investments made (to the extent that they are focused on that aspect of AI) are a bubble that is doomed to pop (catastrophically, in my view). Such an occurrence would leave not only stakeholders and investors in AI-dominated companies in the lurch, but those in infrastructure concerns that are building out to accommodate the needs of the predicted boom. I think that the horizon on this happening is shorter than medium term – 4 to 5 years at most, possibly half that. Admittedly, there are applications for AI that make sense, possibly MS is concentrating on those, but I have my doubts. If I am correct, how much do you think such a crash could add to what is already in the cards thanks to FedGov financial policy?
It is early days for AI. Impossible to predict how much growth there will be; how much productivity there will be; or whether a crash is in the cards.
For now, the only certainly is that there will be a large build out of AI data centers and a corresponding increase in electricity demand.
I’m a LinkedIn Executive. I See the Bottom Rung of the Career Ladder Breaking.
May 19, 2025, 5:01 a.m. ET
By Aneesh Raman – Mr. Raman is the chief economic opportunity officer at LinkedIn.
There are growing signs that artificial intelligence poses a real threat to a substantial number of the entry-level jobs that normally serve as the first step for each new generation of young workers. Uncertainty around tariffs and global trade are only likely to accelerate that pressure, just as millions of 2025 graduates enter the work force.
We saw what happened in the 1980s when our manufacturing sector steeply declined. Now it is our office workers who are staring down the same kind of technological and economic disruption.
Breaking first is the bottom rung of the career ladder. In tech, advanced coding tools are creeping into the tasks of writing simple code and debugging — the ways junior developers gain experience. In law firms, junior paralegals and first-year associates who once cut their teeth on document review are handing weeks of work over to A.I. tools to complete in a matter of hours. And across retailers, A.I. chatbots and automated customer service tools are taking on duties once assigned to young associates.
…
https://www.nytimes.com/2025/05/19/opinion/linkedin-ai-entry-level-jobs.html
I agree 100%. See my post above:
My call is the next recession doesn’t happen until we’re knee deep in AI / robotics layoffs
In the last 9 months, the CEO of Amazon has stated that students don’t need to study programming anymore. Their AI has got that part down. Within 5 years, those mid & upper level IT jobs are going to be at risk.
from Reuters: Republicans said the legislation will lower taxes for Americans across the income spectrum and spur economic growth.
“This is jet fuel for the economy, and all boats are going to rise,” House Speaker Mike Johnson said.
Mike Johnson has irretrievably established himself as one of the biggest morons who has ever been elected to Congress, and that competition features a tremendous number of ridiculously stupid people.
There are many morons in the House.
The educational level of the Senate is higher.
The BBB isn’t perfect but includes a lot of good things….tax cuts, money to deport illegals and cuts to Medicaid. Hopefully able bodied adults will start working.
You mean the coming BBB rating of the US debt?
Trump’s not going to deport any significant number of illegals. He may start a civil war in our cities by badgering, insulting and threatening mass deportations, but he will do next to nothing. He is a liar. A pathological liar. An agent of the elite globalists installed into power to so hatred and create divisions between and among all Americans. Divide and Conquer. Very effective, especially when you have a paid agent provocateur in charge stirring up shit among everyone. Very effective also, when you have tens of millions of Trumptard sheeple and religious wackos (“Christian’ Zionists”) have no clue about just about everything.
Every illegal he deports is good. They won’t be getting any free benefits from my tax dollars. I hope he starts deporting to other countries. I hope ALL illegals are afraid and self deport. Also able bodied Americans won’t be getting free Healthcare through Medicaid. I’m tired of my tax money being used to pay for fraud.
Most of the fraud $ is the result organized scams. Money paid to loafers in the end is not that much of the total budget.
BUT even if your contention is true, money is being lost and it is easiest to start with the low-hanging fruit, as they say.
But the government IS working on real fraud, such as the below. There are also numerous stories of other medical fraud , which became even more exacerbated during the Covid “dole out money w/o question” extravaganza.
White-collar criminals need to receive much higher sentences upon conviction.
Regarding medical fraud: I think that RFK Jr will be given only so much rope. When he begins to infringe on the profits of the real connected players, the rug will be yanked out from under him, the same way that Musk was disenfranchised when he got too close to the fundamental grift. You haven’t heard anyone even whisper the “DOGE” word in weeks, have you? MAHA will follow the same path.
Yes this exactly what I mean about organized scams or orchestrated scams, whatever you want to call it. White collar criminals definitely need more hard time.
Don’t be so sure. He is not going to let the “libs win”, which is an argument he used to help get the BBB passed.
Trump administration sues Los Angeles over sanctuary city policy
By Holmes Lybrand, CNN
Mon June 30, 2025
The Justice Department is suing the city of Los Angeles over its so-called “sanctuary city” policy passed in the weeks following Donald Trump’s 2024 presidential election victory that prevents city resources from going toward immigration enforcement.
The city’s laws, DOJ says, “interfere with and discriminate against the Federal Government’s enforcement of federal immigration law,” according to the lawsuit filed Monday.
“The practical upshot of Los Angeles’ refusal to cooperate with federal immigration authorities has, since June 6, 2025, been lawlessness, rioting, looting, and vandalism. The situation became so dire that the Federal Government deployed the California National Guard and United States Marines to quell the chaos,” the complaint states.
…
https://www.cnn.com/2025/06/30/politics/los-angeles-sanctuary-city-lawsuit
The sheeple are notoriously easily distracted. Let me hear you say “Baaaaaa”…
I don’t necessarily agree with you on the details, but I am becoming ever more suspicious that the gist of your argument is correct. I.E., Deep State (or whatever else you would like to call it of you don’t like that term) Plan A was to reelect President Autopen to do their bidding. When that failed, Harris was elevated to Plan B, with Trump as Plan C (whether or not he has the wit to realize it). I did, and do continue to regard, Trump as preferable to Biden or Harris, but only because, as Option C, he advances their plans a bit more slowly. The oligarchy will continue, and like any unreasoning, ravenous animal, will eat our young before desperation leads it to consume its own.
“Precipice” is a strange word to use for that statement. Usually one would say we are at the “dawn” of a new golden age. However “precipice” is probably more accurate.
Freudian slip, or a hidden signal of resistance?
More likely the former given who said it.
drip drip drip
UPS Offers Buyouts to Drivers, a First in Its 117-Year History
https://archive.ph/PBYmu
Meh. UPS has been on a quest to improve financials by curtailing services that showed less than optimal profitability since late 2024. I was personally made aware of this when I lost shipped purchases because they suddenly ended their SurePost deal with USPS at that time. This *could* as easily be an artifact of that restructuring as the effect of any recent developments.
Like Wyle Coyote we are well past the precipice.
We are still looking forward.
We have not looked down yet.
That time will come.
I also note that Acme has fired it’s entire technical staff and filed for chapter 11.
Republicans sold us down the river.
Par for the course.
Just a tad slower than the Dems would have done. Nevertheless, the current flows in the same direction.
Precipice is right – the only way from here is down.
Yep, down the tubes as they say
Ending of a Nation is a process.
Looks like we’ll need to elect MTG as the first female president if we want to cut spending. I’m OK with that. Whatever it takes. The good news is that interest rates will stay high and the chance of a housing price drop will increase.
She’d have to figure out how to do anything besides playing with her gavel for that lol
Lol. At least that entertains some!
Greene voted YEA for the bill that increases spending by a lot.