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We welcome the very significant number of hits on this post with a particular emphasis on the two links at its end. We apologize that we do not have the resources to respond to the overwhelming number of comments that we have received. Nonetheless we recommend that those of you who wish for us to post related papers of interest to contact CRE.
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We estimate that incorporating the Trump administration’s major tax proposals into the FY2025 House budget reconciliation would require that the provisions mostly sunset by December 31, 2033. Even so, primary deficits would increase by $5.1 trillion before economic effects and by $4.9 trillion after modest, positive economic effects. Both primary deficit estimates are larger than the cap of $2.8 trillion allowed in budget reconciliation. High-income households gain the most while lower-income households gain less or even lose, depending on how the spending cuts are distributed.
The thrust of the proposal herein is that thoughtful and educated regulators are capable of implementing a softer, but not soft, landing for the pending US bankruptcy. Here is a representative occurrence of the past which could be representative of the future if deliberate thought is given by the aforementioned talent to address a particular problem.
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Senate, House Split On Path To Reconciliation: if the existing havoc (02/24/2025) in the Executive Branch continues, it is likely that the debate on the Debt Ceiling will be a dominant determination of the complexion of the Trump Administration.
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A number of our readers have inquired regarding our interest in the future bankruptcy of the United States. Sixty years ago when the author began his government career it involved the review of agency budget proposals. Eventually he concluded that government programs could be divided into “giveth” ( Social Security, Medicare and Medicaid) programs and “taketh” programs (regulations and taxes) programs. The aforementioned demarcation lead to his changing his career from budget review to regulatory review because politicians had to get elected and the promotion of “giveth” programs is their ticket to success. Many years latter an extrapolation of the aforementioned demarcation lead to the conclusion that the United States would probably spend its self to financial oblivion.
Mr. Musk is the only national figure to announce that the US government is going bankrupt.
The US banking community has expressed no interest in the subject; The Asian banking community has expressed considerable interest in the subject.
CRE’s limited resources are best spent on working with the creditor communities not the debtor communities.
