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David Stockman joined Fox News and host Neil Cavuto to sound off on his warning concerning the debt ceiling crisis and why it threatens the U.S economy. In the interview Stockman relays his budget analysis as a Washington insider to offer the concrete numbers on what he views as a debt catastrophe in the making.
When asked about current Republican leadership that pushes back against his concern over the debt David Stockman responded, “I think they’re dead wrong. The countdown to crisis actually begins next Wednesday, March 15. The Federal Reserve is going to raise interest rates and is not going to stop. Expect three or four times this year. It has not choice and has dithered for 99 months at a zero bound rate. It has to allow the market to normalize.”
“Second, the debt ceiling freezes in at $20 trillion. They’re burning through cash at the Treasury like drunken sailors. I can’t emphasize this enough, the Treasury has no idea what is happening within its on joint. In the first 46 days of the Trump Administration they have burned through $294 billion of cash. They started with $382 billion. It is now down to $88 billion and dropping by the day.”
David Stockman is the former Budget Director for Ronald Reagan and understandings the complexities of the market, Washington and the risk of a government debt crisis more than most (see his most recent writing on the matter HERE). Stockman is also a two-term Congressman and worked for more than two decades on Wall Street. He is currently the bestselling author of Trumped! A Nation on the Brink of Ruin… And How to Bring It Back.
Politics of the Debt Crisis
“At the rate they lost cash last year, between March and early June, they will be out of cash by Memorial Day. There is no reason to believe that will be any different this year.”
Stockman then exposed the severity of the crisis and the politics of Congress stating, “There is no pathway to a majority in the Congress that soon [to raise the debt ceiling]. They have declared war on the Democrats. After all of the immigration ban, the walls at the border, the deportations, the attacks on Obama… there are zero Democrat votes for debt ceiling increase right now. In the bloodbath that is happening on Obamacare-Lite… is that by May the Republican party is going to be in tethers. There will be no majority to raise the debt ceiling. By then the rubber will meet the road. They’ll have to start all of these gimmicks.”
“I’ve been in Washington a long time. I know when the disinvesting and gimmicks start, it’s a sign to everybody that the crisis is near.”
When Cavuto posed whether the economy might be able to grow out of the debt crisis and the looming threat of a debt ceiling Stockman pressed, “No, you can’t get a tax cut boom in 2 weeks, 5 weeks or 10 weeks.” When asked if it was about redirecting GDP and revenues he remarked, “No. There is no chance it is going down. The first quarter GDP is coming in at 1%. This whole flurry of bullish enthusiasm that we’ve had in the stock market is a farce.”
“It will soon become clear that the tax cuts aren’t going to happen, that this debt ceiling crisis is going to take down the whole system. Why did they allow $294 billion of cash to be burned up? Only $237 billion of that was to cover the inherited deficit that you can’t blame Trump for but he used $57 billion in cash to lower the debt ceiling.”
To watch the full interview on the debt crisis with David Stockman on Fox News CLICK HERE.
If you would like to learn how to get your FREE copy of his book sent directly to you – CLICK HERE.
[Daily Reckoning Ed. Note: To see exactly what this former Reagan insider has to say about Trump and the fiscal threats from politics and the debt crisis, David Stockman is sending out a copy of his book Trumped! A Nation on the Brink of Ruin… And How to Bring It Back to any American willing to listen – before it is too late. To learn how to get your free copy CLICK HERE.]n7
The post David Stockman: Debt Crisis Countdown Begins appeared first on Daily Reckoning.
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