Some Perspective On The Debt

The 2-year spending bill has passed. The good news is that we will now be able to go two years without the threat of a government shutdown. The bad news is that in order to get the needed military spending and pass the bill, fiscal sanity went out the window. However, when you look at the bigger picture of where we are currently, things are actually getting better.

The Gateway Pundit posted an article today about the Trump Administration and debt increases.

The article included the following:

In spite of the fact that President Trump took over with nearly $20 trillion of debt and the related interest payments on the debt, and in spite of the Federal Reserve (FED) under Janet Yellen increasing interest rates by a full 1 percent since the 2016 election, President Donald Trump’s debt is one third and $1.2 trillion less than Obama’s.

The US Debt since President Trump was inaugurated on January 20th, 2016 through today has increased by only $547 billion. On inauguration day the debt was at $19.9 trillion and on February 7th, 2018 the debt stood at $20.5 trillion.

…Where President Trump increased the Debt to date by only 2.7% , Obama increased the debt by 16.2% or 13.5% more than President Trump.

President Obama inherited a US Debt amount of $10.6 trillion on his inauguration and increased it by more than $1.7 trillion by the end of his first year in office.

…CNBC reported in December 2015 that President Obama oversaw “seven years of the most accommodative monetary policy in U.S. history” (from the Fed). The Fed Funds rate was at zero for most of Obama’s time in office. Finally, in December 2015 the Fed announced its first increase in the Fed Funds rate during the Obama Presidency.

The only Fed Funds Rate increases since 2015 were after President Trump was elected President. The Fed increased the Fed Funds Rate on December 14, 2016, March 15th, 2017, June 14, 2017 and again on December 13, 2017. Four times the Fed has increased rates on President Trump after doing so only once on President Obama late in his 2nd term.

The article explains how the Fed Funds Rate impacts the economy:

Lower interest rates usually spur the economy by making corporate and consumer borrowing easier. Higher interest rates are intended to slow down the economy by making borrowing harder.

If the Federal Reserve was political and wanted to prevent Republican Presidents from successful economic growth and debt decreases, then the Fed would increase the Fed Funds rates during Republican Presidents’ terms while decreasing the Fed Funds rates under Democratic Presidents’ terms. This appears to be exactly what the Fed is doing and the market is reacting negatively this past week because of it..

One of the things to remember during the Trump Administration is that President Trump is truly swimming upstream. There are a lot of vested interests in Washington who feel that the success of President Trump would not be in their best interest. Among other things, shrinking the size of the bureaucracy would have a negative impact on real estate prices in the suburbs surrounding Washington–currently the wealthiest counties in the nation. President Trump is a serious threat to the deep state.

So How Did The Federal Debt Do This Year?

President Trump is a businessman. Regardless of whether you like him or not, he is a businessman, and successful businessmen are relatively careful about how they spend money, and how much money they spend. President Trump is no exception.

Yesterday The Gateway Pundit posted an article about the impact of the Trump Presidency on the debt.

The article reports:

In spite of the fact that President Trump took over with nearly $20 trillion of debt and the related interest payments on the debt, and in spite of the federal reserve (fed) under Janet Yellen increasing interest rates by a full 1 percent since the election, President Donald Trump’s first year debt is $1.1 trillion less than Obama’s.

Here is the picture:

The article at The Gateway Pundit reports:

Right after Barack Obama was elected President, on December 16, 2008, the Federal Reserve (The Fed) lowered the Fed Funds rate by an entire percent, from 1% down to 0% . The Fed had not lowered the Fed Funds rate by such a large amount (1% ) since at least before 1990, if ever. The Fed kept this 0% rate for most of Obama’s eight years in office.

CNBC reported in December 2015 that President Obama oversaw “seven years of the most accommodative monetary policy in U.S. history” (from the Fed). The Fed Funds rate was at zero for most of Obama’s time in office. Finally, in December 2015 after the Fed announced its first increase in the Fed Funds rate during the Obama Presidency.

The only Fed Funds Rate increases since 2015 were after President Trump was elected President. The Fed increased the Fed Funds Rate on December 14, 2016, March 15th, 2017, June 14, 2017 and again on December 13, 2017. Four times the Fed has increased rates on President Trump after doing so only once on President Obama.

If the Federal Reserve was political and wanted to prevent Republican Presidents from successful economic growth and debt decreases, then the Fed would increase the Fed Funds rates during Republican Presidents’ terms while decreasing the Fed Funds rates under Democratic Presidents’ terms.

This appears to be exactly what the Fed is doing.

The article at The Gateway Pundit also notes that without the increases in the interest rate it is possible that President Trump would have a balanced budget to date.

Remember that the Federal Reserve is neither Federal nor a Reserve. It is a stranglehold on our economy held by a small group of extremely wealthy people who control our money supply. For those who are interested in learning exactly how we got the Federal Reserve, I strongly recommend reading The Creature from Jekyll Island by G. Edward Griffin. It explains the chicanery that was involved in creating the Federal Reserve and how it was sold to the American people.

The Politics Within The Federal Reserve

In 1910 a group of political, industrial, and financial leaders met in secret on Jekyll Island in Georgia to lay the foundation for the Federal Reserve. The people in attendance included Nelson W. Aldrich, Republic Whip in the Senate, Abraham Piatt Andrew, Assistant Secretary of the U.S. Treasure, Frank A. Vanderlip, president of the National City Bank of New York (representing William Rockefeller), Henry P. Davison, senior partner of the J.P. Morgan Company, Benjamin Strong, head of J.P. Morgan’s Bankers Trust Company, and Paul M. Warburg (partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty in  England and France). (This information is from The Creature from Jekyll Island by G. Edward Griffin.) This meeting set up the cartel we now know as the Federal Reserve. It is a cartel because it is a small group of people not accountable to the government who control the flood of money in America. They have traditionally used that power politically and will continue to do that in the future. Although some members of Congress have called for a thorough audit of the Federal Reserve, but because of the power the fed has, that will never happen.

Yesterday The Gateway Pundit posted a story about recent actions by the Federal Reserve. During the eight years of the Obama Administration, President Obama continually used executive orders to put roadblocks in the way of economic growth–over-regulation, increases taxes on successful people, and generally doing things that made it more difficult for small businesses (the backbone of our economy) to grow. During this time, the Federal Reserve kept the economy from feeling the impact of President Obama’s actions by not raising interest rates. Now we have a President who understands economics and is doing things to help the economy grow. So what is the Federal Reserve doing–trying to undercut his success.

The article at The Gateway Pundit reports:

No Fed Funds Rate increases took place between June 2006 and December 2015. CNBC reported in December 2015 that President Obama oversaw “seven years of the most accommodative monetary policy in U.S. history” (from the Fed). Finally, in December 2015 after the Fed announced its first increase in the Fed Funds rate during the Obama Presidency, it was reported that:

“Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic conditions, the committee decided to raise the target range for the federal funds rate to ¼ to ½ percent,” the FOMC’s post-meeting statement said. “The stance of monetary policy remains accommodative after this increase, thereby supporting further improvements in labor Premarket conditions and a return to 2 percent inflation.”

The only other Fed Funds Rate increases since 2016 were after President Trump was elected President. The Fed Funds Rate increased on December 14, 2016, on March 15th, 2017  and yesterday June 14th, 2017 by .25%.

The article further notes:

The Fed Funds Rate greatly impacts the economy:

“Lower interest rates usually spur the economy by making corporate and consumer borrowing easier. Higher interest rates are intended to slow down the economy by making borrowing harder.”

So again the question is whether the Fed is trying to negatively impact President Trump’s economic recovery from the abysmal Obama years (Obama was the only President where the GDP growth rate never broke 3%) or is the economy just so much better now that President Trump has taken office?

We suspect both.

Stay tuned.