Trump budget still pass with narrow 51 vs 49 votes in Senate which will add 1 more trillion debt to its current debt of $20 trillion.
The cyclic boom and bust global phenomenon that has been absent for 10 years has again return.
This is not a piece of good news.
It means US is borrowing money $1 trillion from internal and external creditors and give it to Trump 500 business empire, big US enterprises like facebook, apple, google, microsoft, etc as tax rebate.
US future generations will have to pay $21 trillion debt plus few hundred billions of debt interest to internal and external creditors like China, Japan, Saudi etc.
This is how Greece declare bankrupt a few years ago.
If US bankrupt, does IMF have $21 trillion to bail out US?
The answer is no.
Will US billionaires and US enterprises like Trump, Bill Gates, Warren, apple, facebook etc sell off their assets to bail out US?
The answer is no.
US in 1930s trigger the 1st World Depression and to resolve the economic crisis - lead to WW2.
What will happen if US declare bankrupt?
World will experience an economic crisis liken a simultaneous nuclear fallout.
Trump is restarting and triggering an unprecedented Boom and Bust economic vicious cycle.
EU Europe prudent financial policies such as balanced fiscal budget – ensuring spending within the means, keeping welfare spending affordable and other prudent Economic Policy – though has caused some short term and medium term pain – but has bring back sound financial and economic policies – that will prevent the World Economy from riding on yo-yo effects – “wild economic fluctuations”.
The World Economy for these few years look less turbulence.
However, the next phase will be to generate more jobs by encouraging business investment and business activities to sustain growth and trade.
US should slowly and surely follow Europe sustainable financial model to ensure balanced fiscal budget – and further stabilise and ensure sustainable World Economic Growth with stable & sustainable Financial Policies by spending within the means & arresting the yearly mammoth fiscal budget deficit slowly but surely – but not doing drastic changes that cause turbulence to the World Financial Market.
If US also succeeded like EU, the World Economic Growth – will say bye bye to the yo-yo effects – of Economy boom and bane every other few years – that cause turbulence to the World Economy. Posted by Babe at 3:45 AM
ricky l ricky l 34 seconds ago Posted in :- Reuters – Fri 20 Jan, 2017 3:26 AM IST Avatar ricky l 0 seconds ago 1930s Deep Depression --- hopefully it will not occur. Hope Donald Trump learned from this - and not repeat the mistake of the 1930s Deep Depression. ---- "The decline in the U.S. economy was the factor that pulled down most other countries at first; then, internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade.[17] By late 1930, a steady decline in the world economy had set in, which did not reach bottom until 1933." Reply See less
Avatar ricky l 1 second ago And Deep Depression 1930s --- trigger the 2nd World War. 0 ---- World War II and recovery
The common view among economic historians is that the Great Depression ended with the advent of World War II. Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression, though some consider that it did not play a very large role in the recovery. It did help in reducing unemployment.[11][90][91][92] The rearmament policies leading up to World War II helped stimulate the economies of Europe in 1937–39. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 ended unemployment.[93] When the United States entered into the war in 1941, it finally eliminated the last effects from the Great Depression and brought the U.S. unemployment rate down below 10%.[94] In the U.S., massive war spending doubled economic growth rates, either masking the effects of the Depression or essentially ending the Depression. Businessmen ignored the mounting national debt and heavy new taxes, redoubling their efforts for greater output to take advantage of generous government contracts.[cit See less
ricky l ricky l 13 seconds ago Avatar ricky l 0 seconds ago Europe[edit] Europe as a whole was badly hit, in both rural and industrial areas. Democracy was discredited and the left often tried a coalition arrangement between Communists and Socialists, who previously had been harsh enemies. Right wing movements sprang up, often following Italy's fascist mode.[24] As the Great Depression worsened, Labour lost power in Britain and a coalition government dominated by conservatives came to power in 1931, and remained in power until 1945. There were no programs in Britain comparable to the New Deal. In France, the "Popular Front" government of Socialists with some Communist support, was in power 1936–1938. It launched major programs favoring labor and the working class, but engendered stiff opposition. Germany during the Weimar Republic had fully recovered and was prosperous in the late 1920s. The Great Depression hit in 1929 and was severe. The political system descended into violence and the Nazis under Hitler came to power through elections in early 1933. Economic recovery was pursued through autarky, pressure on economic partners, wage controls, price controls, and spending programs such as public works and, especially, military spending. Spain saw mounting political crises that led in 1936–39 to civil war. In Benito Mussolini's Italy, the economic controls of his corporate state were tightened. The economy was never prosperous. The Soviet Union was mostly isolated from the world trading system during the 1930s. To force peasants into industrial jobs in the cities, food was stripped from rural areas, and millions died of starvation. The dictator Joseph Stalin purged nearly all the old Bolsheviks, and killed or imprisoned hundreds of thousands of presumed enemies. Canada and the Caribbean[edit] In Canada, Between 1929 and 1939, the gross national product dropped 40%, compared to 37% in the U.S. Unemployment reached 28% at the depth of the Depression in 1929 and 1930,[25] while wages bottomed out in 1933.[26] Many businesses closed, as corporate profits of C$396 million in 1929 turned into losses of $98 million in 1933. Exports shrank by 50% from 1929 to 1933. Worst hit were areas dependent on primary industries such as farming, mining and logging, as prices fell and there were few alternative jobs. Families saw most or all of their assets disappear and their debts became heavier as prices fell. Local and provincial government set up relief programs but there was no nationwide New-Deal-like program. The Conservative government of Prime Minister R. B. Bennettretaliated against the Smoot–Hawley Tariff Act by raising tariffs against the U.S. but lowered them on British Empire goods. Nevertheless, the economy suffered. In 1935, Bennett proposed a series of programs that resembled the New Deal; but was defeated in the elections of that year and no such programs were passed.[27] Cuba and the Caribbean saw its greatest unemployment during the 1930s because of a decline in exports to the U.S., and a fall in export prices. Asia[edit] China was at war with Japan during most of the 1930s, in addition to internal struggles between Chiang Kai-shek's nationalists andMao Zedong's communists. Japan's economy expanded at the rate of 5% of GDP per year after the years of modernization. Manufacturing and mining came to account for more than 30% of GDP, more than twice the value for the agricultural sector. Most industrial growth, however, was geared toward expanding the nation's military power. Beginning in 1937 much of Japan's energy was focused on a large-scale war and occupation of China. Australia and New Zealand[edit] In Australia, 1930s conservative and Labor-led governments concentrated on cutting spending and reducing the national debt. In New Zealand, a series of economic and social policies similar to the New Deal were adopted after the election of the first Labour Government in 1935.[28] See less
US Senate approves major tax cuts in victory for Trump
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WASHINGTON: The U.S. Senate narrowly approved a tax overhaul on Saturday, moving Republicans and President Donald Trump a big step closer to their goal of slashing taxes for businesses and the rich while offering everyday Americans a mixed bag of changes.
In what would be the largest change to U.S. tax laws since the 1980s, Republicans want to add US$1.4 trillion over 10 years to the US$20 trillion national debt to finance changes that they say would further boost an already growing economy.
"We are one step closer to delivering MASSIVE tax cuts for working families across America," Trump said in an early-morning tweet.
U.S. stock markets have rallied for months in the hope that Washington would provide significant tax cuts for corporations.
Celebrating their Senate victory, Republican leaders predicted the tax cuts would encourage U.S. companies to invest more and boost economic growth.
"We have an opportunity now to make America more competitive, to keep jobs from being shipped offshore and to provide substantial relief to the middle class," said Mitch McConnell, the Republican leader in the Senate.
The Senate approved their bill in a 51-49 vote with Democrats complaining that last-minute amendments to win over sceptical Republicans were poorly drafted and vulnerable to being gamed later by lawyers and accountants in the tax avoidance industry.
"The Republicans have managed to take a bad bill and make it worse," said Senate Democratic leader Chuck Schumer. "Under the cover of darkness and with the aid of haste, a flurry of last-minute changes will stuff even more money into the pockets of the wealthy and the biggest corporations."
No Democrats voted for the bill, but they were unable to block it because Republicans hold a 52-48 Senate majority.
Talks will begin, likely next week, between the Senate and the House of Representatives, which has already approved its own tax bill.
Trump wants that to happen before the end of the year, allowing him and his Republicans to score their first major legislative achievement of 2017, despite controlling the White House, the Senate and the House since he took office in January.
Republicans failed in their efforts to repeal the Obamacare healthcare law over the summer and Trump's presidency has been hit by White House in-fighting and by a federal investigation into possible collusion last year between his election campaign team and Russian officials.
The tax overhaul is seen by Trump and Republicans as crucial to their prospects at mid-term elections in November 2018, when they will have to defend their majorities in Congress.
In a legislative battle that moved so fast a final draft of the bill was unavailable to the public until just hours before the vote, Democrats slammed the proposed tax cuts as a give-away to businesses and the rich financed with billions of dollars in taxpayer debt.
The framework for both the Senate and House bills was developed in secret over a few months by a half-dozen Republican congressional leaders and Trump advisers, with little input from the party's rank-and-file and none from Democrats.
Six Republican senators, who wanted and got last-minute amendments and whose votes had been in doubt, said on Friday they would back the bill and did so.
Senator Bob Corker, one of few remaining Republican fiscal hawks who pledged early on to oppose any bill that expanded the federal deficit, stood out as the lone Republican dissenter.
"I am not able to cast aside my fiscal concerns and vote for legislation that ... could deepen the debt burden on future generations," said Corker, who is not running for re-election.
KEY CHANGES
Numerous last-minute changes were made to the bill on Friday and in the early morning hours of Saturday.
One was to make state and local property tax deductible up to US$10,000, mirroring the House bill. The Senate previously had proposed entirely ending state and local tax deductibility.
In another change, the alternative minimum tax (AMT), both for individuals and corporations, would not be repealed in full. Instead, the individual AMT would be adjusted and the corporate AMT would be maintained as is, lobbyists said.
Another change would put a five-year limit on letting businesses immediately write off the full value of new capital investments. That would phase out over four years starting in year six, rather than be permanent as initially proposed.
Under the bill, the corporate tax rate would be permanently slashed to 20 percent from 35 percent, while future foreign profits of U.S.-based firms would be largely exempted from tax - both changes pursued by corporate lobbyists for years.
On the individual side of the tax code, the top tax rate paid by the highest-income earners would be cut slightly.
The Tax Policy Center, a nonpartisan think tank, analysed an earlier but broadly similar version of the bill passed by the Senate tax committee on Nov. 16 and found it would reduce taxes for all income groups in 2019 and 2025, with the largest average tax cuts going to the highest-income Americans.
Two Republican senators announced their support for the bill on Friday after winning more tax relief for non-corporate pass-through businesses. These include partnerships and other companies not organised as public corporations, ranging from mom-and-pop concerns to large financial and real estate groups.
The bill now features a 23 percent tax deduction for such business owners, up from the original 17.4 percent.
Democratic Senator Richard Blumenthal said Trump controls more than 500 pass-through companies that will directly benefit. "So the president may be celebrating, but most Americans will rue this day," Blumenthal said.
The Senate bill would gut a section of Obamacare by repealing a fee paid by some Americans who do not buy health insurance, a step critics said would undermine the Obamacare system and raise insurance premiums for the sick and the old.
Senator Susan Collins, a moderate Republican, said she obtained commitments from Republican leaders that steps would be taken later in separate legislation to minimize the impact of the repeal of the "individual mandate" fee.
(Additional reporting by Susan Cornwell, Susan Heavey and Richard Cowan in Washington; Caroline Valetkevitch in New York; Editing by Kevin Drawbaugh, Kieran Murray and Alexander Smith)
Source: Reuters Read more at http://www.channelnewsasia.com/news/world/us-senate-approves-major-tax-cuts-in-victory-for-trump-9462850
Donald Trump and Republican leaders claim their plan would provide a ‘big league’ tax cut for the middle class. Nothing could be further from the truth
‘It takes from those in need and gives to those who are already living in incredible opulence.’ Photograph: Jim Young/AFP/Getty Images
After failing to pass a “healthcare” bill that would have thrown up to 32 million Americans off of health insurance, a bill that was more unpopular than the Wall Street bailout, Donald Trump and the Republican leadership in Congress are back.
Now, they are pushing one of the most destructive and unfair budget and tax proposals in the modern history of our country – a plan that would do incalculable harm to tens of millions of working families, our kids, the sick, the elderly and the poor.
The Republican budget, which will likely be debated on the floor of the Senate this week, is the Robin Hood principle in reverse. It takes from those in need and gives to those who are already living in incredible opulence.
Donald Trump and Republican leaders claim their plan would provide a “big league” tax cut for the middle class. Nothing could be further from the truth. According to the non-partisan Tax Policy Center, by the end of the decade, nearly 80% of the tax benefits of the Republican plan would go to the top 1% and 40% would go to the top one-tenth of 1%.
Meanwhile, while the Republicans want to give a $1.9tn tax break to the top 1%, they are proposing massive cuts in programs that working-class Americans desperately need.
This budget cuts Medicaid by more than $1tn over 10 years – which would throw some 15 million Americans off of the health insurance they currently have. Further, this budget does what the Republicans have not yet attempted to do in their previous healthcare legislation and that is to make a $473bn cut to Medicare, despite Trump’s campaign promises not to cut these programs.
Poll after poll after poll tells us that the overwhelming majority of Americans do not want Congress to cut Medicare or Medicaid and they do not want to provide tax breaks to the wealthy or large corporations.
A recent Pew Foundation poll finds that 85% of Republicans and 94% of Democrats want to either maintain or increase funding for Medicare. And 60% of Americans oppose slashing Medicaid, according to a recent Quinnipiac poll.
A recent Wall Street Journal and NBC poll finds that only 12% of the American people believe the wealthy should receive a tax cut; while 62% believe the wealthy should pay more in taxes.
Why are the Republicans bringing forth such an absurd budget that, in almost every instance, is diametrically opposed to what the American people want?
The answer isn’t complicated. Follow the money.
Today, we have a corrupt campaign finance system that enables multibillionaires, along with some of the most powerful CEOs in America, to contribute many hundreds of millions of dollars to elect Republican candidates to represent their views. As a result, the top 1% has been able to rig the political system to favor them at the expense of virtually everyone else. Here are just a few examples.
The Republican budget would give the richest family in America, the Walton family of Walmart, a tax cut of up to $52bn by repealing the estate tax – a tax that only applies to multimillionaires and billionaires. But, if you are a lower-income senior citizen you and over 700,000 other families may not be able to keep your home warm in the winter because of a cut of about $4bn to the Low Income Home Energy Assistance Program.
This budget says that if you are the second-wealthiest family in America, the Koch brothers, you will see a tax break of up to $33bn. But if you are a working-class student trying to figure out how you could possibly afford college, your dream of a college education could evaporate along with 8 million other students because of more than $100bn in cuts to Pell Grants and other student financial assistance programs.
This budget gives members of the Trump family a tax cut of up to $4bn, but if you are a low-income pregnant woman you and over 1.2 million new moms, babies, and toddlers may not be able to get the nutrition you need thanks to a $6.5bn cut to the Women, Infants, and Children (WIC) program.
What is alarming is that despite this incredible giveaway for the billionaire class, the Koch Brothers and their network say that it’s not enough.
When David Koch ran for vice-president under the Libertarian party in 1980, he advocated not just to cut Medicare and Medicaid, he wanted to abolish these programs. He didn’t just want to cut taxes for the wealthy he wanted to eliminate all forms of taxation.
At a time when the middle class is shrinking and over 40 million Americans are living in poverty, this budget must be defeated and replaced with a plan that reflects the needs of the working families of our country, not just the wealthy, the powerful and large campaign contributors.
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